POSTED ON December 13, 2016
Let’s go to Starbucks for lunch!?

Becoming part of the consideration set for a meal is Starbucks’ new mission to Mars. Their new CEO has announced that they aspire to double their food sales in the next 5 years. This is going to be tough for a brand built on beverages to pull off- and if they do, it will be an amazing feat of brand evolution. Unlike the initially confusing notion of Porsche making an SUV (which has been a big success), parlaying the “magic” of the Starbucks brand to food has different challenges, on both the branding and experience fronts. SUV’s can be sporty but sandwiches can’t be caffeinated.

Brand Challenges

In order to win with food, Starbucks will need to build association with meal occasions much more strongly than today, where guests may not want, or give them permission to do so. They need to become a destination for meals- breakfast and lunch- without coffee being the primary driver; today they are at best a Coffee-plus occasion. To hit a target of doubling their food sales they need to quickly evolve into a Coffee/Food hybrid that guests will find appealing. That requires the discipline to visually present, talk about, and promote food in equal proportion to coffee, or perhaps even more so to build momentum. Food must be a new job, not just a hobby.

Transferring their equity from coffee to food is a big brand challenge. What is the consumer proposition beyond opportunism? As the father of the brand, we know Howard Schultz as a coffee guy. Sure he enjoys and appreciates cuisine, but that isn’t his “superpower” and has not been the brand’s narrative. How they conjure up the credibility for food will require a compelling new character to enter the story- a new cast member to the familiar show we all love.

Their strategy so far is to BUY equity from renowned bakery brands La Boulange and Princi– brands with shared values. Having these brands integrate completely into the Starbucks experience is tough. They seem like interlopers versus partners. Does Starbucks become a host to these brands? Are they subsumed? How they trade on the equity of these bakery brands without diluting or eroding the Starbucks brand will require finesse.

Experience Challenges

The present systems are biased toward coffee related operations and workflow. When ordering food, the current experience seems disruptive to the speed, flow, and energy of the concept. It can have the effect of making dining guests feel like they are an anomaly. Also, the inventory levels of menu items are fixed to manage spoilage, so locations that don’t do high volumes may not be be prepared for an unplanned surge in demand. This leaves guests with the need to have a second choice or forgo buying food at all.

Visual merchandising of the food items will be an ongoing challenge in the current store configuration. Premium food items with unfamiliar names, ingredients, and flavor profiles need the guest to invest time to understand them. They may or may not be inherently appealing. The display case approach is zero-sum, and not conducive to displaying all items with appetite appeal. The menuboard is the fallback, but many items may need lengthy descriptions. How they merchandise to drive trial, appetite appeal, and build repeat sales in high volumes is new territory for Starbucks.

With their proliferation of new concepts, the Roastery and the Reserve, Starbucks will have more laboratories to experiment with integrating food and meal occasions into their proposition. It is certain that evolving the brand proposition and scaling a high-volume food business across the fleet will be a Venti-sized endeavor.

Bill Chidley is a Partner and Co-Founder at ChangeUp. Creating Innovating Experiences that Drive Growth.

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