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Foolish Test Drive: Looking Over Starbucks' Clover

Starbucks (Nasdaq: SBUX  ) leader Howard Schultz apparently fell in love with a high-end coffee brewer dubbed the Clover; the coffee giant acquired the company that makes the high-end machines, which have generated a ton of buzz lately. My Foolish colleague Kristin Graham and I recently decided it was high time to taste-test coffees made with the legendary Clover.

Fortunately for us, there is one store in the immediate Washington, D.C., area, that has a Clover: Grape + Bean, an Alexandria, Va., store that offers both coffee and wine. And if there's anything the Clover is purported to do, it's enhance the flavor in coffee beans, so that consumers can enjoy fine coffee as they would fine wine.

That's right -- McDonald's (NYSE: MCD  ) , Burger King (NYSE: BKC  ) , and Dunkin' it ain't. (For that matter, it's also unlike more pure-play coffee-oriented companies like Caribou (Nasdaq: CBOU  ) , Peet's (Nasdaq: PEET  ) , and Green Mountain Coffee Roasters (Nasdaq: GMCR  ) , not to mention conglomerates with coffee brands, like The J.M. Smucker Company (NYSE: SJM  ) , which recently acquired Folgers.)

Bring on the joe
I don't make it a habit to eavesdrop on other people's conversations, but I'm pretty sure that when we walked in, one employee was being grilled about the Clover on the telephone, which seems to support the idea that it's generating a heck of a lot of curiosity.  

I think Kristin and I were both relieved that we paid just $3 and change for our 14-ounce cups of specialty joe; media reports have said that in some places, Clover-brewed coffee can apparently sell for up to $20 for a 12-ounce cup. (The Clover machines cost about $11,000 each.)

So I was kind of expecting the Clover would deliver some kind of visual spectacle that would blow my mind. Instead, visually at least, the Clover was basically a large silver box.

Was it good?
Sure it was. However, Kristin and I both seemed to be of the opinion that it was a good cup of coffee, but unsure if it was quite the earth-shattering cup of coffee we'd expected.

I admit I'm probably a bit of a coffee weakling. It's no accident that I drink a Starbucks latte every day -- given that it's loaded with steamed milk and sweetener, you can probably gather that I'm not exactly a coffee connoisseur.

On the other hand, our Foolish colleague Tim Hanson is a fan of the Clover. He argues that not only is the Clover coffee tasty, but it will allow Starbucks to offer higher-margin coffee and be able to charge more for cups of that higher-end fare. He has a very good point -- for example, if coffee connoisseurs crave Kopi Luwak (the coffee infamously made from civet droppings, which can cost hundreds of dollars per pound), Starbucks could theoretically offer it, and charge the right amount for the privilege.

For now, I'll trust that the people who rave about the Clover know their coffee, since I can't boast expertly trained taste buds (although I know a bad coffee when I encounter one). However, as much as this Foolish test drive was fun, I can't say that I have a really clear idea of whether the Clover will end up being a huge catalyst for Starbucks' business. (And in a wee bearish side, high-end coffee like Clover pours may be great in bull markets, but if people -- even the wealthy -- are getting super frugal, I fear the Starbucks acquisition may prove to be a case of ill timing. We'll see.)

At some point we hope to organize a blind taste test among Fools to see how we respond to different coffees without bias. Until then, I still crave my daily Starbucks latte -- and for now, I am going to forego a daily dose from the Clover.

Craving more Starbucks Foolishness?

Starbucks has been recommended by Motley Fool Inside Value and Motley Fool Stock Advisor. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (6)

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  • Report this Comment On July 15, 2008, at 1:02 AM, mexicankev wrote:

    I can't speak to potential profitability, but I can speak to the taste. There's a local coffee shop here in Seattle, Zoka's, that has a Clover and they serve drip from it in the afternoon. I was unaware they even had the machine the first time they served me from it, but I was immediately, well, overwhelmed by the unique, powerful flavor. I'm hardly a connoseiur, but it was truly like no other cup of drip I've ever tasted. Sounds hard to believe, I know, but give it a shot yourself, Fools.

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