Starbucks New Instant Via Goes Live! On Saturday Night

Posted by Stephanie Startz on September 28, 2009 04:37 PM

The ads were funnier than the show. But can the four 15-second spots Starbucks ran during Saturday Night Live's season premiere drive customers back into stores (and lift ailing stock prices)?

The delightfully nonsensical spots show taste tests conducted with town hall protesters, a jockey, a priest and a rabbi, and people who look like their dogs -- all agreeing that they can't taste the difference between Starbucks drip coffee and Starbucks Via.

Is Starbucks cannibalizing itself by positioning Via against their own product? Yes and no.

Will customers buy their instant coffee en masse and never walk through the doors of a Starbucks again? Of course not. Customers will still flock to Starbucks to enjoy the variety of beverages available on their menu that can't be recreated at home. Just as Starbucks' bottom line felt no ill effects from offering whole-bean coffee roasts for purchase in stores and supermarkets, they can expect Via to help revenue.

Via's real harm may come as a brand-image boondoggle. Starbucks risks wasting time and resources focusing on the wrong thing, involving itself in an unnecessary campaign to rebrand instant coffee when it should have all hands on deck for the ailing flagship. Worse, suggesting that brewed Starbucks can't be told apart from instant is not a message the company needs.

The coffee retailer has begun to rebound slightly after a brutal year, and needs to buckle down and refocus energies on providing customers with a traditional Starbucks Experience.

Via will shore up sales for the short term, but focus needs to turn inward for success in the long run. Starbucks will come to find, sooner or later: instant isn't always a good thing.

More about: Starbucks, Via, Saturday Night Live, Advertising, Coffee, Food

Andy Wright says:

It's an interesting strategy. It will certainly get people closer to the brand and ultimately spending more time with it. By creating instant coffee at home that's more occasions with the brand and hopefully a stronger relationship.

Will it cannibalize their sales? I think it could. Whilst the whole bean coffee roasts didn't impact sales, this will have much broader appeal at a much more accessible price. However, the truth will be in the tasting. I haven't tried it...can you really not tell the difference?

Overall, good luck to Starbucks. They're trying to refresh the brand and actively connect with customers again, whether they're using the right tactics only time will tell.

September 29, 2009 04:04 AM #

Joost Lindeman says:

Time will learn that Starbucks will never be the same again. It is walking away from it's essence and the reason why people love Starbucks - it's more than just coffee. Via feels as a tool to earn money in the short run.

Brand extentions can work. But to be really able to judge it's success you have to have a mid term perspective at least. And that, at the same time, is the danger - will you be able to make big choices once it has become fully integrated into company's culture.

For sure it will boost sales and revenues in the short. It will stabalize in a couple of years, some more extentions will be added, lifting it up a little again. But every extention will move away from the ingredients that once made the brand big. In 5 years time they will start a campaign aimed to bring the quality and community-feeling back again.

Nevertheless, good luck!! And I will try one.

September 29, 2009 04:29 AM #

joel says:

As a branding idea, I think this is very risky. In the US, instant coffee as a product form is associated with being an inferior-tasting form of coffee (perhaps as opposed to the UK where a lot of "soluble" is sold). I think Starbucks is jeopardizing the magic for a little incremental sales.

As a commercial execution, I think it is questionable as well. It is tied to a short-term phenomenon that will pass out of the news. also, as per the latest polls, the majority are against the latest healthcare proposals, so why risk that alienation?

September 29, 2009 04:42 AM #

Ashish says:

I feel the answer to cannibalizing is no even on the brand front. The fact is that people go in to Starbucks for the experience and not just for the coffee. So they might not end up loosing the loyal customers but might make a few who would like to taste the coffee minus the time consumption of visiting the nearest Starbucks.
Finally, liked the way the ad has come about

September 29, 2009 05:29 AM #

Mohan Mehra says:

It is an interesting strategy. It may get coffee drinkers, who were not convinced of the value proposition, to try the brand.This is incremental. Current loyalists are not likely to purchase it anyway. Maybe only as "emergency" back up coffee.
The bigger idea may be international markets (UK, China, Japan) where instant is the preferred form.
Loved the ad. But it will wear out very soon. Maybe that's why a :15.

September 29, 2009 08:30 AM #

Abe S says:

I mostly agree. While there is probably going to be some brand dilution here, I believe the consumers for these two products are totally different. Few who pay $4 for a coffee (often as a social experience) will buy much instant cheaper stuff and vice versa. As for the ads, it was Saturday Night Live. That is a VERY select target demo. so unless they roll out more (much more) widely most will probably never even see them.

Finally, remember those heady days when Starbucks eschewed advertisig because it didn;t need to...? Wow.

September 29, 2009 09:22 AM #

Aparna Kishen says:

I found the add quite interesting; its crispness & wackiness will make people take a second look at it which is not a simple target to achieve given the existing clutter. Now, taking up the speculation of a possible cannibalization, instant coffee is no new player & there are competent brands in the market despite which Starbucks has had its share of customers. So, VIA appears to be an attempt to convert a different segment of customers. After all, its not just the Starbucks coffee that attracts people, its the entire experience that counts which would pull its normal share of cafe goers.

September 29, 2009 11:31 AM #

Karla Gual says:

Risky to say the least!  Why would a brand whose strategy is to become the "third place" of consumers would launch a product that goes against its strategy?

As a product, it could be a success, but at the expense of the brand's value and what Starbucks stands for - the customer experience at that "third place".  Instant coffee isn't an experience.

Just shows that even great brands can sometimes derail.  Hope they get back on track again.

September 29, 2009 11:47 AM #

Ken Picquelle says:

Ready to brew / instant coffee has it's own customer/catagory and Starbucks needs to be part of it, and with this new product (via) they could very well own it. No cannibalizing will take place,
get real. You will see others like Peet's do the same VIA's real play will come from that instant consumer that would never pay $1.95 per cup of drip but has mind share of the starbucks brand. So when this hits the super market shelf's and has the right price point, the starbucks brand will grow. This is what brands do. Enjoy

September 29, 2009 12:21 PM #

kamini banga says:

This contrarian strategy is so not conventional marketing thinking that I wonder - what if the scenario turns out like this;
people taste VIA, like it but want the roast coffee experience in store. However they can have a Starbucks quick fix now at home as well. So add VIA to my roasted Starbucks beans on the kitchen shelf. And next visit to the supermarket walk past Nescafe and Maxewell!!!!!!!!
Stranger things have happened

September 29, 2009 01:36 PM #

Alex Littlewood says:

Brand Suicide! Starbucks success has never been about taste. Their brand is about experience and convenient public locations! By equating their brand with instant coffee (which NO ONE likes) they're undermining the two key things their brand is founded on "fresh brewed coffee" and "a location where you want to be". They're now saying, "instant coffee can taste as good as our fresh brewed coffee".... big mistake.

Peet's has eroded Startbucks market share based on better coffee and tea quality... and now Starbucks is putting themselves at even greater risk by suggesting their coffee can be replaced by instant coffee powder! They should have focused efforts on improving the in-store experience: FREE WIFI like every other coffee shop in the world (duh!!!), live music, better quality tea's (tazo = lipton), better staff training (is it just me or has the level of service sucked lately?).

September 29, 2009 03:25 PM #

Rick says:

Starbucks has not just been about "experience" -- it's humble beginnings introduced the rest of the US (outside of the PNW) to the very idea of quality coffee. Taste and coffee quality have been the hallmark of SBUX emergence. They were the anti-Folgers, the anti-Maxwell, and the anti-Nescafe.

If it's true that they've come up with a way to make instant coffee taste good, well, ok. But to bill it as indistinguishable from their own drip is absurd. There are so many easy targets -- McD's, Dunkin Donuts, etc. -- why risk tainting their own brand?

If ever there was a case to repackage a product under a child brand name ("BrandX Instant Coffee, brought to you by Starbucks") this was it.

This is a huge mistake.

September 30, 2009 09:52 AM #

Andy says:

At its core, the debate revolves around brand value versus sales value. This retail strategy will enable an increase in sales value as a small segment of the population buy into the idea of enjoying Starbucks coffee in the home, however to position this product as a convincing equivalent to the drinking quality of a freshly prepared Starbucks drip coffee will undermine the brand value.

Starbucks Brand equity has been built carefully over time as the complex relationship has evolved between the drinking occasion, the environment and a mythological quality implied by the significant price premium.The value of starbucks is measured by the willingness of consumers to pay a significant premium for their belief in its superior product offering.

The 'magic dust' that flavours this brand and allows the premium to be interpreted as value will be undermined once the effects of this new campaign are pressed home and the consumer realises that the instant coffee really is as good. At this juncture the consumer will start re-evaluating their out of home choices and look more closely at the competition.

In the UK at least, the claim of one competitor, Costa, that ''7 out of 10 coffee lovers prefer the taste', will be more than reinforced by this strategy and drive a shift in loyalty further undermining their sales and brand position.Secondary brands can also hope to gain as the consumers research alternatives that satisfy their demand for an unsullied 'pure coffee' experience.

The cost of regaining this lost ground and win back lost users will almost certainly be greater than the short term sales gain of introducing an instant product.

I look forward to the seeing how this plays out.

September 30, 2009 11:45 AM #

Sheila says:

But the thing they are doing right, at least in the California stores, is asking people to buy the VIA and they will donate an equal amount to the CA firefighters. Great thing to have a cup of instant coffee that tastes great for our modern day heroes. Convenient out in the field, but tastes like fresh brewed.

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