It seems like ages ago that Starbucks (Nasdaq: SBUX) founder and CEO Howard Schultz questioned the state of his own company's soul. (OK, it was February 2007.) More than two years later, Starbucks' soul seems to be in more danger than ever, despite Schultz's return to the helm to save the day.
Could Starbucks possibly do more to look like everyone else? Ideas like value pricing and instant coffee suggest that the java giant has gone the way of bland McDonald's (NYSE: MCD) or instant coffee providers like Kraft's (NYSE: KFT) Maxwell House or J.M. Smucker's (NYSE: SJM) Folgers. Whether it's setting up coffee shops that mimic mom-and-pop establishments or "local washing" its product names, Starbucks seems less like a cool "third place" to hang out, and more like just another corporate monolith.
Starbucks once seemed ahead of the curve on environmentalism, but its a proposal for sustainable stores that could achieve coveted LEED (Leadership in Energy and Environmental Design) status seemed a bit late to the game. Whole Foods Market (Nasdaq: WFMI) already has several LEED-certified stores, including its flagship location, and 20 additional ones registered to be certified.
Starbucks was supposed to be a gathering place, mindful of communities and the world around it. It's championed many positive causes, and provided employees with better benefits than the usual coffee chain. Still, too many of the company's recent ideas feel less like its old, soulful self, and more like the bland devisings of marketers and bureaucrats.
If Starbucks becomes just another huge place to buy coffee, I fear it'll lose competitive advantage against rivals like Caribou Coffee (Nasdaq: CBOU). Why go out for a soulless cuppa joe when you could have a better and cheaper experience at home with Green Mountain Coffee Roaster's (Nasdaq: GMCR) Keurig brewers?
Starbucks' desperate, misguided efforts to regain its old caffeinated growth could tarnish what made the company special in the first place. In my opinion, that’s a huge risk for the company -- and for the stock.
What do you think? Vote in the poll below, or discuss the state of Starbucks' soul in the comment boxes below.
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