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Questions Swirl Around Starbucks's VIA Brand

Posted by Barry Silverstein on August 20, 2010 12:00 PM

Yesterday we noted Starbucks's aggressive plans to move brands from its own stores onto supermarket shelves. Now a report by Reuters questions whether the company has crossed the line when it comes to sales of its VIA instant coffee brand.

It does appear that Via, which was introduced last September, is doing well — but part of the reason may be due to in-store sampling (read: freebies).

Tyler Swain, a Starbucks barista in Omaha, Nebraska told the Times that "his store is under intense pressure from its district manager to deliver VIA sales." He said he is told to give out complimentary drinks in an effort to get customers to buy the VIA product while they are in the store.

This leads to some confusion between barista-brewed beverage sales and packaged VIA sales at the register. Starbucksgossip.com confirmed those fears.

The blog has noted that some consumers have complained about the practice on its website, which is visited frequently by customers and employees of the chain.

Queried by Reuters' reporter, Starbucks admitted that giving out complimentary drinks occurs but said it does not support the practice.

Sanja Gould, a spokeswoman for Starbucks, responded that "there have been limited instances where some beverage sales have been rung up as VIA sales. With more than 16,000 stores around the world, isolated incidents and mistakes do occur. However, we do take this seriously and are working with our store partners to ensure accuracy for all purchases."

Starbucks has a big stake in VIA's success, not only because it is the company's first foray into instant coffee, but also because of the product's importance in sparking sales in supermarkets and retailers such as Target and Wal-Mart.

As it looks to lessen its dependence on its stores and make more money selling at others' stores, questions surrounding VIA's actual sales figures could damage the credibility of Starbucks, which has been trying to re-group after significantly restructuring its business.

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