Howard Schultz based the Starbucks business model on Italian cafes. He saw the chain's stores as a "third place," after work and home for its customers.
He also understood that the Starbucks experience centered around coffee. That was something he was fiercely protective of, and he even wanted customers to be hit with a coffee smell as soon as they walked into one of the chain's cafes.
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In his 1997 book "Pour Your Heart Into It," Schultz described the aroma as "heady, rich, full-bodied, dark, suggestive." The company's multiple-time CEO, who has since left its board, even made the chain take items like its Morning Bun cinnamon roll off the menu because when warmed, the bun's smell overpowered the signature coffee scent.
You may disagree with Schultz's coffee preferences (and really question the whole olive oil thing), but it's hard to doubt his devotion to coffee. His successor, however, Laxman Narasimhan, a former PepsiCo executive, seems much less devoted to coffee and more devoted to efficiency.
That's something that is clearly laid out in the coffee chain's new "reinvention" plan which it shared on Nov. 2.
"Triple Shot Reinvention will focus on three priorities: elevating the Starbucks brand; strengthening the company’s digital capabilities; and becoming truly global; customized with 'two pumps' unlocking efficiency and reinvigorating partner culture," the company shared in an email sent to TheStreet.
Those all sound like noble goals, but the word "coffee" only appears in the document eight times, entirely in an incidental way or in the name "Starbucks Coffee Company."
Image source: Starbucks
Starbucks serves up a hot mug of efficiency
Narasimhan's plans seems a lot like the ones put forward by one of Schultz's previous successors Kevin Johnson. Instead of focusing on coffee, Johnson worked to build out the company's digital infrastructure.
That actually paid off when the pandemic hit, but that was a bespoke event that's unlikely to be repeated. The new CEO's "Triple Shot" focuses entirely on operations with a slight nod to its current labor relations problems. It also has five, not three, priorities for the coffee company.
- Elevating the brand
- Strengthening and scaling digital
- Becoming truly global
Starbucks uses a forced coffee analogy to add in two more items.
"These strategies are customized with two enabling “pumps” which will: Unlock efficiency, and Reinvigorate the partner culture," the company shared.
That sounds like the sort of plan a company makes to better appeal to Wall Street, but there is a single paragraph that at least addresses coffee.
Additionally, the brand will be elevated through further product innovation. The company will continue to grow coffee and its core menu through customization and personalized marketing — adding popular beverage innovations to the core line up — which now accounts for 85% of net beverage sales. The company will also drive innovation through two specific areas of focus: targeted dayparts and growing food attach with all-day breakfast and all-day snacks.
That's not exactly the love letter to coffee that Schultz envisioned for the brand. The entire plan, which might be good for the company, lacks the passion that made the company what it is.
"When I first discovered in the early 1980s the Italian espresso bars in my trip to Italy, the vision was to re-create that for America — a third place that had not existed before. Starbucks re-created that in America in our own image; a place to go other than home or work. We also created an industry that did not exist: specialty coffee," Schultz said.
That seems like a mission while the "Triple Shot" plans seem built around corporate speak.
"We see an opportunity to better leverage our footprint to serve the evolving needs of our customers. Innovation in our store formats, to purpose defined stores like pick-up, drive-thru only, double-sided drive-thru, and delivery-only allows us to better meet our customers where they are at through differentiated experiences,” Starbuck North America President Sara Trilling said. "To capture that demand, we will build more new stores – with new formats, in new cities and cities we’re already in. To be clear, Starbucks has not saturated the U.S. market."
Schultz, on the other hand, often sounded like Walt Disney using words like "passion" and 'dreams." But, in the end, this quote seems to sum up the feeling that's missing under the company's new leadership.
"I can't imagine a day without coffee. I can't imagine!" he said.
