Starbucks’ strange brew of business plans

Hottovy sees a lot of potential for Starbucks in the company’s expanded breakfast choices, especially now that it is facing more pressure from food-oriented retailers such as McDonald’s.

“Customers come to expect that from a chain that sells coffee,” he said.

But he’s more skeptical about the instant coffee, called VIA.

Long-term, he said, there might be an opportunity for Starbucks to take some market share away from more traditional instant coffee companies like Folgers. But in the short-term,  the company is up against the strong perception that instant coffee just doesn’t taste as good as the real thing — a perception formed in part by Starbucks itself, which has done a lot to sell Americans on freshly brewed, high-quality coffee.

“It’s going to be an uphill battle,” Hottovy said.

Meanwhile, Starbucks also is facing other challenges. A series of layoffs, store closures and changes to worker benefits could mar its reputation as a good employer, and also impact morale. And on a broader level, there is the question of where Starbucks will be left if and when economic conditions improve.

Andrew Hetzel, director of the coffee industry consulting firm Cafemakers, said he had high hopes for Starbucks when he heard that Schultz had returned to the CEO job, and grew even more confident after hearing about plans to refocus on premium, fresh-brewed coffee, such as using the upscale Clover coffee maker.

But he has grown disillusioned as he’s watched Starbucks branch out into such things as smoothies, breakfast sandwiches and now instant coffee.

“There have just been so many mixed messages,” Hetzel said.

Trevino, the Starbucks spokeswoman, said the company continues to forge ahead with the plans Schultz laid out a year to refocus on its core mission of selling good coffee, albeit at a slower pace.

Even the new instant coffee product is part of that effort, she said.

“It’s very much who we are, though it might not seem like that on the surface,” she said.

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