Starbucks seeks new growth through instant coffee

By Branko Brkic 1 October 2009

So what’s up with Howard Schultz, Starbucks legendary CEO, introducing instant coffee, $1 per cup Via Ready Brew? It’s pretty simple: after many years of planetary expansion, all the way to 16 000 stores, Starbucks had to face what every big company has to at some stage: saturation. Selling espresso-based coffee enabled it to grow big, but it had to end somewhere. Starbucks’ ubiquity and the global downturn, coupled with increased competition from surprising competitors like Walmart, McDonalds and Dunkin’ Donuts, meant the radical ideas became very welcome. But instant coffe, for Pete’s sake? The market may be big, actually huge at $20 billion globally, and US instant coffee drinkers account for only 4% of it, making it obvious target for the behemoth desperate to grow. But do they have to destroy Starbucks in order to save it?

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