Is this a Starbucks or not?

My first visit to a Starbucks was many years ago, at the original store near Seattle’s Pike Place Market. My friend Tony and I had stopped by during a morning of watching flying fish in the Market. I pulled my camera out to take a picture of him standing in line because he was making funny faces at me, as he sometimes likes to do. But suddenly, a loud voice thundered across the room: “NO CAMERAS! NO CAMERAS!” An irate barista in the now-familiar dark green Starbucks apron pointed at me and my evil camera. Despite protests that I was only taking an innocent shot of Tony and not engaged in corporate espionage, he was visibly upset.

Today’s corporate Starbucks seems far less concerned about protecting the mysteries of that corporate branding, and more about slumping revenues, aggressive competitors, and declining market share.  In fact, Starbucks has recently, quietly and without fanfare opened another coffee shop.  Not unusual for Starbucks, you may think, who now have about 16,000 locations in 43 countries worldwide.

Well, this one is unusual.  No carbon copy urban-chic decor that tells you instantly you’ve just walked into Starbucks. Instead, 15th Avenue Coffee and Tea in Seattle’s leafy Capitol Hill neighbourhood looks and feels like one of those comfy, independently-owned neighbourhood cafés, nothing like your average signature Starbucks. They’re also serving wine and beer there, and offering lots of live music and book signings and other community events to draw their neighbours in. There is no signage, no logo, nothing at all to remind you that this little shop is wholly-owned by the world’s biggest coffee vendor. As one reviewer describes it:

“Ethically speaking, it’s a ‘Mom & Pop’ designed to snuff out other ‘Mom & Pops’. I find it ironic to see a store designed like all of the small shops that Starbucks has put out of business.” 

In spite of the deliberate attempt to hide the fact that this is indeed still a Starbucks store, a sampling of original comments in the 15th Avenue’s new blog showed that savvy Seattelites do know their java:

“You are Starbucks – why the deception?”

“Is 15th Avenue Coffee & Tea owned by Starbucks?”

“Why did they take the Starbucks name off, when you’re still a Starbucks?

“You’re a Starbucks, so why all the cloak and dagger with trying to be an indy? I’d have more respect if you just came out and branded it with the old logo. Focus on the core, the coffee. Seriously, as a shareholder, this store and this move is a disappointment.”

“How sad this sham is! Starbucks’ service has gone to the devil, and the best idea you have is to start a fake independent coffee shop? Howard, time to retire.”

“For some reason, my post asking about whether or not 15th Ave. Coffee & Tea was owned by Starbucks was deleted. So, I’ll ask it again… are you owned by Starbucks?”

“Yes, we are owned by Starbucks:)” – (finally posted by manager signed only as “Jenna”)

What’s going on over there at Starbucks?  We might have seen ‘Mom-and-PopBucks’ coming had we all read this 2007 company memo called The Commoditization of the Starbucks Experience. It was written by then-Chair Howard Schultz to then-CEO Jim Donald (before Schultz replaced Donald last year in a Starbucks corporate restructuring move). The memo included his brutally revealing assessment of the troubled company’s flawed business and marketing evolution:

Memo from: Howard Schultz, Starbucks Chair                                   February 14, 2007 10:39 PST

Sent to: Jim Donald, Starbucks CEO

“Many of these decisions (to change) were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces.

“For example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines.

This specific decision became even more damaging when the height of the new machines, which are now in thousands of stores, blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista. This, coupled with the need for fresh roasted coffee in every North America city and every international market, moved us toward the decision and the need for flavor locked packaging.

Again, the right decision at the right time, and once again I believe we overlooked the cause and the effect of flavor lock in our stores. We achieved fresh roasted bagged coffee, but at what cost? The loss of aroma — perhaps the most powerful non-verbal signal we had in our stores; the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, and once again stripping the store of tradition and our heritage?

“Then we moved to store design. Clearly, we have had to streamline store design to gain efficiencies of scale and to make sure we had the return on investment on sales-to-investment ratios that would satisfy the financial side of our business. However, one of the results has been stores that no longer have the soul of the past, and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee.

In fact, I am not sure people today even know that we are roasting coffee. You certainly can’t get the message from being in our stores. The merchandise, more art than science, is far removed from being the merchant that I believe we can be, and certainly at a minimum should support the foundation of our coffee heritage.”

Oh, and those gorgeous La Marzocca espresso machines, hand made in Florence since 1927 and, as Mr. Schultz pointed out in his memo, gone conspicuously missing from the current corporate Starbucks business plan?  There’s one of these jewels holding pride of place at the 15th Avenue store.

If you’re in Seattle, check out 15th Avenue Coffee and Tea for yourself and let us know what you think. And see if their lengthy coffee menu still includes only one single fair trade and one organic line of beans. Find them at 328 15th Avenue East. You can also visit their website or read this Bloomberg business article.


UPDATE: January 2011:

Starbucks returns: The 15th Avenue Coffee & Tea Experiment is Over

8 thoughts on “Is this a Starbucks or not?

  1. Yep, you’re right. When we went down to check this out after reading your article here, we wouldn’t have known this was a Starbucks unless we’d read your piece first. We felt compelled to inform every patron there about who actually runs the place. Customers are patronizing this coffee house precisely BECAUSE they prefer to support the ‘mom & pop’ places, NOT a big multi-national.

    Who are they trying to fool? US, the public that’s who. This is a good example of sleazy marketing. It just shows how important it is to do your homework if you value ethical business practices.

    Thanks for letting us know. We are new subscribers to your site – excellent work, well done.

    • This makes me wonder about ALL small independent-looking mom & pop coffee houses I walk into. You have to read the very very very fine print – or ask questions! – to figure out if they are just mega corporate coffee masquerading as the kind of local small business we like to patronize.

      Thanks for this.

  2. Personally, I love going to Starbucks and always have. They pride themselves on serving good coffee – which is all I ask. I have been to many of these ‘mom & pop’ indies over the years, and the quality/service/decor can sometimes be hit and miss.

    Trashing Starbucks is becoming an anti-trendy thing to do.

  3. Pingback: Business Plan

  4. I visit my local Starbucks store every morning. I like Starbucks coffee. I like the employees who are unfailingly polite, efficient and friendly. I like the fact that no matter where I travel (even in Beijing recently) there will be a Starbucks nearby with the reliably good quality coffee I expect from the chain.

    That’s why it shocks me to learn of this clearly sneaky strategy to hide the fact that this new place in Seattle is in fact a Starbucks store. What the !@@$%!!??? Hiding the true ownership merely feeds into the anti-mega-chain sentiment that many people experience.

    The strategy in fact backfires for loyal customers like me. I prefer to patronize honest retailers – so no more Starbucks for me (at least knowingly – unless they’ve also taken over my #2 choice, the small neighbourhood independent near my subway stop!) I hope not, one thing I really do like about the #2 choice is that they serve only organic, shade-grown, fair trade coffee beans – something that Starbucks has NOT chosen to get fully on board with yet.

    Thanks a lot, Carolyn – quite an eye-opener about the secret world of marketing.

    • An important point, Java Guy:

      “… serve only organic, shade-grown, fair trade coffee beans – something that Starbucks has NOT chosen to get fully on board with yet..”

      Think of the huge impact on the coffee growing industry that a global player like Starbucks could have made by now had they taken a gutsy stand on these three requirements from Day One?

  5. Starbucks is not the enemy here. They employ local people, serve good coffee, and even offer benefits to part-time workers, something that small mom & pop coffee shops do not. But this corporate decision to pretend to be an indie is a bad one, just one of many bad decisions that the head of the company has listed here. Adbusters has been running a NO STARBUCKS campaign – check it out.

    • Waxwing, the Adbusters NO STARBUCKS campaign is futile and meaningless. Why pick on Starbucks? It’s a homegrown success story – we should be proud of that success as consumers. If you get big enough, I guess you make a better target.

      Love the Ethical Nag essays – always something to get the juices (or the coffee) flowing!

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