Posted by Abe Sauer on February 17, 2010 10:43 AM
Fast food chains have been vying – rather successfully – for a piece of Starbucks' high-end coffee market by offering customers an improved quality coffee and even free Wi-Fi. However, the heated war for consumer coffee dollars just became a little hotter: Enter Burger King.
Burger King recently announced a deal with the Seattle's Best coffee brand. Some Burger King locations will begin serving Seattle's Best coffee in June, before going nationwide in September. The drinks will include flavored iced and other varieties one would expect to find at Starbucks-like shops. Though the details have yet to be released, the new Burger King coffee will certainly be sold under some strongly branded campaign, as Burger King's "BK Joe" coffee brand will be mothballed.
Clearly Burger King is eager to capitalize on the up-market coffee beverage category, which in the last few years has exploded beyond fast food chains and mass-market bookstores to traditional business establishments such as banks. Burger King stock was up after the announcement.
Interestingly, Seattle's Best is owned by Starbucks Corp. While the strategy is designed to take on competitors such as Dunkin Donuts and McDonald's, it also creates a compelling paradox: By offering Seattle's Best coffee at Burger King, Starbucks is now competing against its own stores. Is this a wise move into an untapped market, or is Starbucks cannibalizing itself?
Either way, your move, Taco Bell.