Source: http://blogs.bnet.com/business-news/?p=3025

As it plots its comeback from the great store-count implosion of 2008, Starbucks Corp. (SBUX) is doing some tinkering with its stores. It’s great to see, even if not all the ideas seem like winners.

On the plus side, the company is toning down its corporate green-and-white color scheme and building stores that look more like homey neighborhood coffeehouses, done in more subtle earth tones. Starbucks’ 15th Avenue Coffee & Tea store in Seattle started this trend, which another experimental store in Seattle’s busy Capitol Hill neighborhood, Olive Way, will continue when it reopens in the fall after a remodel.

Another winner was Starbucks’ decision to go to free Wi-Fi — it had to happen.

Also good: expansion into beer and wine at the Olive Way store, to accompany an expanded menu. The liquor additions seem natural — after jittering up on coffee all day, you might want to come down with a glass of wine.

But here’s one innovation that’s more questionable — Olive Way’s move into a layout described as “coffee theater.” That is, the espresso machines will be smack in the middle of the restaurant instead of behind a counter. Surrounded by narrower counters, the idea is to bring customers closer and turn coffee making into entertainment.

That sounds great if you’re a latte-seeking mom with a couple of squirmy toddlers. The kids would probably be entranced, though you might have to child-leash them to keep their fingers off the machinery. But here’s the bigger problem: Espresso machines are loud. And lots of people hang out at Starbucks to do business — working on laptops or calling clients from cellphones. It sounds like this store design will leave no quiet corner from which to make a call or think about that proposal you’re writing.

However that works out, we’ll hear more about it, as Starbucks is quietly ramping up its advertising. Historically, Starbucks advertised very little, allotting only about 1 percent of revenue to marketing, but it recently indicated its marketing spending will increase this year.

We’ll have to wait and see those ads to determine whether more advertising is a good move. It’s an opportunity to help renovate the brand, though — for a couple of years now, the company has been best known for closing stores, or for letting gun-nuts wave their pistols around while waiting in line for lattes. With a new ad campaign, Starbucks has a chance to redefine what it stands for in customers’ eyes.

by ASHLEY M. HEHER

Source: http://www.google.com/hostednews/ap/article/ALeqM5g9Xj4HqqJPY85EkUQpqPloCnWYHwD9GIAPI00

As experiments go, this one isn’t flashy.

But the success — or failure — of one Starbucks cafe on the edge of a trendy Seattle neighborhood could ripple through the nation’s coffee house industry.

Because where Starbucks goes, others follow.

Dubbed “Olive Way,” the store is the biggest percolator yet for ideas that the world’s largest coffee company has been testing separately at nearly a dozen locations around the globe. And what succeeds at Olive Way will most likely be spread to other Starbucks stores around the country.

With muted, earthy colors, an indoor-outdoor fireplace, cushy chairs, and a menu with wine from the Pacific Northwest’s vineyards and beer from local craft brewers, this 2,500-square-foot shop in the Capitol Hill neighborhood will reopen in the fall with espresso machines in the middle.

“It’s going to feel very different,” said Kris Engskov, Starbucks’ regional vice president.

The machines at Olive Way will be part of what executives call a coffee theater. Counters will be narrower — a slim as a foot in some places — to bring customers closer to baristas; the machines will brew one cup at a time to extract deeper flavor from beans.

The store will be the chain’s only location that sells beer and wine in the U.S., though another Seattle test cafe that doesn’t carry the Starbucks brand began selling alcohol last year. The menu at Olive Way will be bigger, full of savory foods that pair with coffee, wine and beer. And customers will be able to customize the offerings, some of which will be freshly made.

The decor is to offer a departure from Starbucks’ sometimes formulaic green-and-tan — with local artists’ work, regionally reclaimed building materials, a community work table and a meeting area set off by a sliding door.

As at any restaurant chain using its stores as real-life laboratories, there’s no guarantee every idea from Olive Way will be successful or be implemented across the company. And the company wouldn’t say how much it’s spending on the effort, or how soon elements from the shop might expand to other locations.

But executives are optimistic that some will find their way to other locations, especially in vibrant urban neighborhoods where the chain can attract affluent customers who may prefer a low-key hangout over a crowded bar.

The pilot shows how hard Starbucks is working reinvigorate its brand, which stumbled under the weight of hyper-paced over-expansion. The chain closed hundreds of stores and cut scores of jobs, and founder Howard Schultz returned to help the company re-emerge.

Now, Starbucks plans more measured growth and is working to relax its corporatized image by returning to its days as a place where people want to linger for hours sipping coffee. It plans to offer free, unlimited Wi-Fi in all company-run stores; it’s letting customers tailor drinks even more, and it’s opening stores with more community flavor. A Seattle shop uses an old bleacher from a nearby high school for shelving, and a New York City store’s floors and counters are made of wood reclaimed from a century-old Pennsylvania barn.

All the changes are part of an appeal for more afterwork customers at a chain that gets the bulk of its in-store business before 11 a.m.

“The key in the restaurant business is to differentiate themselves, and clearly they’re making a move to do that,” said Morningstar restaurant analyst R.J. Hottovy. “I think the idea of trying to localize the business, that’s an aspect that will certainly work and help differentiate the brand and make it a lot less cookie-cutter than what you see in standard Starbucks.”

It will be a challenge. Gourmet coffee shops still sold 53 percent of specialty coffee drinks like mochas and lattes last year, but that was down from 57 percent a year earlier, according to data from market research firm The NPD Group.

The coffee business has become increasingly competitive as restaurants — from independent doughnut shops to Goliath’s like McDonald’s Corp. — go after Starbucks. Servings of specialty drinks rose 17 percent at fast-food chains and 23 percent at doughnut shops this year, and they fell 8 percent at gourmet cafes.

Starbucks plans to file building permits Friday with Seattle city officials to renovate the store.

By Greg Beato Source:http://reason.com/archives/2010/02/09/starbucks-midlife-crisis

Last summer in Seattle, Starbucks opened 15th Avenue and Tea, an unbranded café featuring “small batch coffees sourced from individually owned farms” and a variety of fussy brewing methods designed to appeal to those connoisseurs who believe a cup of $4 coffee ought to be at least as complicated to make as a Big Mac. Live music is provided by a small-batch indie rock piano band sourced from a tiny town in Wisconsin. There’s an in-house “tea master,” and occasional outbreaks of poetry. Starbucks is 39 years old now, and like a lot of 39-year-olds, especially those who’ve experienced great success in their salad years but are beginning to wonder if they’ve lost their touch, it’s having a bit of an identity crisis.

In 2008, Starbucks closed 661 under-performing locations. In 2009 it shuttered an additional 300 stores and laid off 6,700 employees. In an attempt to position itself against newer, hipper rivals, the company started talking up its “heritage.” It resurrected a less polished version of its logo for use in certain branding situations. Presumably, its coffee is still brewed from coffee beans, but everything else in its new stores seems to have made a radical career switch. The bar at a London Starbucks is upholstered with scraps from an Italian shoe factory. The countertop at the Paris Starbucks is made out of recycled cell phones.

For all their ostensible authenticity, such adventures in interior design cannot match the truly radical act of installing espresso machines in bank lobbies. Like Seattle’s other great cultural export from the early 1990s, Nirvana, Starbucks has always been most vital, most interesting, most revolutionary when at its most commercial.

Granted, not everyone thinks of the chain as radical. Take Bryant Simon, a historian at Temple University. In his 2009 meditation on Starbucks, Everything But the Coffee, he offers the usual critiques of the company. It says it sells coffee, but it doesn’t. It says it’s a venue for conversation and civic discourse, but it isn’t. It sells overpriced coffee-like beverages and a safe, predictable, environment. It preys on needy, status-seeking consumers by offering them clean bathrooms, innovative products, and a soothing ambiance in myriad convenient locations. For Simon, Starbucks was designed to be an exclusive, elitist institution: When CEO Howard Schultz began adding locations in the late 1980s, he “made sure to put his stores in the direct path of lawyers and doctors, artists on trust funds and writers with day jobs as junk bond traders.”

If you’re thinking to yourself, damn, that’s totally unfair to writers with day jobs as unemployed writers, well, yes, that was Schultz’s evil scheme! He wanted to introduce fancy coffee to people who weren’t already drinking fancy coffee. So, Simon reports, “unlike an owner of one of the beat coffee shops in the 1950s, he didn’t set up in transitional neighborhoods or fringe places like, for instance, Chicago’s neobohemian Wicker Park.”

In the late 1980s, of course, there weren’t many cafés serving high-quality coffee anywhere. Coffee consumption per capita was at its lowest point since 1962, soft drinks had recently surpassed hot caffeine as the nation’s favorite beverage, and Coke was in the midst of a campaign advertising its utility as a breakfast drink. The few cafés that were selling espressos and capuccinos, however, were located precisely in places like Wicker Park.

In choosing to locate his outlets in busy downtown locations, Schultz was expanding the world of high-end coffee—diversifying it, in fact, by taking it beyond its insular, self-conscious subculture. The décor of his stores amplified this process. They had the clean and slick streamlining of a fast food restaurant but were more comfortably appointed. Instead of walls lined with old books, there were gleaming espresso machines for sale, packages of whole beans, ceramic cups. They felt a little like a Williams-Sonoma store crossed with an unusually tasteful airport lounge. They were cafés for people who would never set foot in a bohemian coffeehouse, people traditional coffeehouse entrepreneurs had completely ignored.

For less than the price of a Whopper, you could hang out in a sophisticated middlebrow lounge/office for hours on end. And they were popping up everywhere. Exclusive, elitist? Starbucks was exactly the opposite, introducing millions of people who didn’t know their arabica from their robusto to the pleasures of double espressos. Finally, good coffee had been liberated from the proprietary clutches of hipsters, campus intellectuals, and proto-foodies and shared with bank managers and real estate agents. In offices across America, it suddenly smelled like ’ffeine spirit.

For Schultz, this mainstream customer base was both a boon and a curse. In Pour Your Heart Into It, his 1997 account of Starbucks’ rise to global behemoth, he reveals a preoccupation with authenticity that echoed Kurt Cobain’s. In 1989, he initially balked at providing non-fat milk for customers—it wasn’t how the Italians did it. When word trickled up to him that rival stores in Santa Monica were doing big business in the summer months selling blended iced coffee drinks, he initially dismissed the idea as something that “sounded more like a fast-food shake than something a true coffee lover would enjoy.”

Eventually, Schultz relented. And really, what greater punk-rock middle finger is there to purist prescriptions about what constitutes a true coffee drink than a blended ice beverage flavored with Pumpkin Spice powder?

Simon recounts the birth of the Frappuccino in Everything But the Coffee too, but while he acknowledges the grassroots origins, he quickly positions it as an item the chain is “pushing” on “caffeine-dependent women and men.” In his estimation, the company’s “consumer persuaders” and “mythmakers” are the ones with real power. They’re constantly selling false promises, implanting “subliminal messages” in store décor, and otherwise manipulating hapless consumers.

In reality, the chain’s customers have played a substantial role in determining the Starbucks experience. They asked for non-fat milk, and they got it. They asked for Frappuccino, and they got it. What they haven’t been so interested in is Starbucks’ efforts to carry on the European coffeehouse tradition of creative interaction and spirited public discourse.

Over the years, Starbucks has tried various ways to foster an intellectual environment. In 1996 it tried selling a paper version of Slate and failed. In 1999 it introduced its own magazine, Joe. “Life is interesting. Discuss,” its tagline encouraged, but whatever discussions Joe prompted could sustain only three issues. In 2000 Starbucks opened Circadia, an upscale venue in San Francisco that Fortune described as an attempt to “resurrect the feel of the 1960s coffee shops of Greenwich Village.” The poetry readings didn’t work because customers weren’t sure if they were allowed to chat during the proceedings. The majority of Starbucks patrons, it seems, are happy to leave the European coffeehouse tradition to other retailers.

At 15th Avenue and Tea, the quest to cultivate highbrow customers continues. There’s a wall covered with excerpts from Plato’s dialogues. Blended drinks are banned from the premises, and you can safely assume that Bearista Bears, the highly sought-after plush toys that Starbucks has been selling since 1997, won’t ever appear here either.

But if Starbucks really hopes to re-establish its authority as an innovative, forward-thinking trailblazer, it should perhaps use its next experimental venue to honor its heritage as the first chain to take gourmet coffee culture beyond the narrow boundaries of traditional coffeehouse values and aesthetics. Imagine a place with matching chairs, clean tables, beverages that look like ice cream sundaes, Norah Jones on the sound system, and absolutely no horrid paintings from local artists decorating the walls. A place, that is, exactly like Starbucks!

Because despite its ubiquity, despite its advancing years, Starbucks is still the most radical thing to hit the coffeehouse universe in the last 50 years.

What a disapointment!

Starbuck always was a “role model business” for me, and personally Howard Schultz was my business hero. Not anymore.

http://www.huffingtonpost.com/zp-heller/starbucks-health-care-pol_b_208382.html

Health Care reform  is a very sensitive subject for me for the very personal reasons.  As a business owner myself I understand very well what a change is to provide the health insurance for the employees. But I still convinced while we didn’t  get the  single payer Health System here in US, Health Care for the workers should be a priority. And such a successful business like Starbucks can find a creative way to do that. These guys are too smart not to come up with something decent.

Shame on them! Boycott Starbucks! Buy home Espresso Machines! Buy Lelit!