Category — Opinion

Another recent article in the New York Times describes a Starbucks closing down across the street from an indie coffee shop in Kansas City. For the first time the trend of Starbucks pushing out small shops seems to be reversing, and lagging sales and a stale formula has caused Howard Schultz to consider shutting down multiple stores in the US.

Analysts aren’t exactly lining up for a death pool, but there are legitimate concerns about Starbucks’ inability to deliver the experience its brochures promise. Baristas are little more than tollbooth operators now thanks to automatic machines, and even many of its proponents admit that Starbucks has lost what mystique it had, feeling more like a McDonald’s than a coffee house.

In short, the people high up in the chain (as opposed to the customers) are finally wending their way around to the obvious: aggressive expansion for its own sake isn’t a sustainable business model, especially when you’re dealing with a volatile commodity like coffee. So what should your model be?

The [Starbucks] store had a funereal air the other day as a handful of loyal customers sipped beverages and jotted goodbye notes in what amounted to a book of condolences.

Next door, the Broadway Cafe was bustling. “You win because of the coffee,” said Jon Cates, one of the owners.

Anyone over at Big Green listening?

Even if, coffee-wise, you’ve been keeping your ear to the ground these past few months, you might have missed the press release that came out in November announcing the founding of R Miguel Coffees and its, er, unique method of marketing.

In almost any industry requiring a degree of craft, from making cupcakes to speaker boxes, there’s going to be at least one guy who twigs onto the fact that you can trade on mere competence gilded in mystery and an air of exclusivity, rather than naked excellence. In the coffee world, where typically prices are influenced by the commodity market status, R Miguel Meza is that man. From the press release:

R Miguel announced his new venture, R Miguel Coffees, with a bold statement of purpose, “My passion has been to procure and make available coffees that are unimaginably rich, flavorful and rare. [The company] will offer coffees so startling and so rewarding that the experience alone is worth the price of admission. No one can simply buy an RMiguel coffee, as it is made available exclusively by invitation only. These are all coffee beans so immensely flavorful from years of precious care and impeccable processing that tiny amounts are made available from the world’s most loved coffee trees.”

R Miguel coffees can retail for over $200/lb and can be purchased by invitation only. I’d normally say something like “..and it’s causing quite a stir in the coffee world”, except that honestly no one in the industry seems to care very much; most references I’ve seen to the company, when there are any, usually consist of rolled eyes and a dismissive comment. Ironically, this mass indifference is probably the best thing possible for Miguel’s business model. Think about it: you can choose your clients with your invitation scheme, so you deliberately hand-pick rich people who consider themselves gourmands but don’t actually know much about coffee, and don’t know how little they know about it. If what they taste is anything but outright terrible, the high price tag will convince them they’re experiencing magic–after all, it’s been proven that price influences the uneducated palette–and since no pros feel threatened by Miguel, there’s no one contradicting that magical impression.

So if no one gets hurt, as they say, is there any problem with this model? After all, by all reports Miguel is actually a competent roaster, in the past frequently scoring 90+ with his coffees on CoffeeReview.com when he was working for his parents at Paradise Roasters. That’s a respectable track record. So what’s the problem?

I think AndyS at Portafilter.net put it best:

One of the terms championed by Counter Culture, Intelligentsia and others is “transparency.” In our context it means (among other things) that the consumer is educated in detail about where, when and how a particular coffee is sourced. The concept, I believe, is to develop a consumer awareness of the remarkable variety and richness that coffee origins have to offer. Yet when R Miguel names his coffees “Ambrosia” and “Nectar,” it is the precise opposite of transparency. I guess you’d call it “opacity” instead.

Is opacity the next step in our coffee evolution? In other words, will roasters with a proprietary offering “let the coffee speak for itself,” but only from behind a black curtain, so that no one can tell who’s talking?

In a third-wave coffee culture where coffee pros commonly swap hard data that’s integral to the success of their business, is this return to the illusion of coffee as a mysterious synaesthetic experience–in other words, to the world of stereo speakers and luxury cars where measurable build quality and price are necessarily unrelated–an expected occurrence?

The question is particularly interesting to me because I’ve had the occasional and minor “crisis of faith” in the third-wave approach, where roasteries would open across the street from me and ask that I teach them how to succeed against me in the market. I have no true horror stories about it thankfully and in fact have made friends in the business this way, and as a result I believe in the value of transparency. But R Miguel’s approach seems like the logical end of my secret fears about running a coffee business. And here I am, shortly to open another roastery; should I copy his model? Retreat behind a curtain and use vague terms and a nice haircut and sidestep any scrutiny by the fellow roasters who–let’s face it–aren’t the ones paying my bills anyway? But I look at it, and I don’t like it. I don’t see it as a viable long-term solution, as it risks withering in isolation quickly if the repeat business doesn’t come.

Don’t get me wrong: I’m not interested in picking a fight with Miguel, and having never tasted his coffees I’d never tell you not to buy them. He has a strong enough track record with reputable reviewers and there are in fact some aged coffees (assuming he’s selling them and that they make up the high end of his offerings) that are in fact worth $100-200/lb. due to both their quality and the incredible amount of labor that goes into producing and properly storing/aging certain varietals. I’m more interested in it as a point of discussion, both from a commodity standpoint and as a question about the third-wave philosophy.

As you may or may not know, Starbucks–in their continuing all-out war on the trade language–has recently taken to branding some of their drinks with what they call the “skinny platform”. Now when you order a “skinny drink”, you get not only skim milk but sugar-free syrups and no whip, or other similar modifications depending on the What this means is that, just like calling their smallest coffee “tall” to make it sound like you’re getting more for less, they are distorting yet another piece of coffee lingo to mean what they want it to mean, deliberately confusing customers and the rest of the industry and counting on their ubiquitous branding to shift customers’ perception and alienate them from competitors.

But it seems not everyone at Starbucks is toeing the company line…some baristas are rebelling against the move. Starbucks Gossip has printed a mini-manifesto from one such barista in New York:

I would like to say that I think this decision is a poor one, and, at the risk of being reprimanded for insubordination, I will not be following this new method for calling and marking. I feel as though there are several flaws that will cause confusion, frustration and, potentially, a waste of product and time for partners, and far worse, alienate both partners and Starbucks customers. I’ve composed a detailed list of problems that can and, more than likely will, arise from the “Skinny platform.

1) We have been trained since day one to follow a specific method of drink calling/marking. Changing it up now will cause FAR too much confusion. For all stores, high volume stores in particular, this can severely impact speed-of-service, drink quality, customer satisfaction, labor, and product usage. Miscommunication between customers and partners, partners calling drinks and partners making drinks, and partners making drinks calling the drinks to the customers waiting to receive their drinks will inevitably lead to drinks having to be discarded after being made, customers becoming angry and impatient, assuming it is employee incompetence…