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I'm beginning to wonder whether Starbucks (Nasdaq: SBUX  ) is trying to make me feel stupid for nominating it as the Best Stock for 2009. Every new move I hear Starbucks is making brings to mind desperation. Its plans to delve -- or is the word devolve? -- into the world of instant coffee is no different.

Instant gourmet? That's difficult to swallow
The instant version of Starbucks' brewed coffee, Starbucks Via, will be available in packets. "Via" does sound better than "Starbucks Instant," but it won't exactly quell any of the fun poked at Starbucks' pretentious ways. The company will start offering Starbucks Via in its cafes next month in packs of three or 12 (at $2.95 and $9.95, respectively).

But wait -- offering it in its cafes? Instant coffee makes me think of J.M. Smucker's (NYSE: SJM  ) Folgers or Kraft's (NYSE: KFT  ) Maxwell House, and I assumed that Starbucks Via would also be in grocery stores. I don't quite get picking up some packets of instant coffee at Starbucks. I mean, if I'm there, I'm going to buy an actual cup of coffee. Maybe people will pick up some packets just in case they suddenly crave instant later, but I suspect most people aren't really that desperate.

Apparently, instant Starbucks has been in development for 20 years, but I'm not sure that means it should ever have seen the light of day. Howard Schultz said that instant coffee is popular in foreign markets, and that Starbucks Via will be a boon to consumers who just want a single cup of coffee at home. I'd still consider Green Mountain Coffee Roasters (Nasdaq: GMCR  ) and its single-cup Keurig brewing systems closer to the spirit of gourmet coffee, though.

After all, instant coffee doesn't  have the best reputation. If it did, I doubt Starbucks would ever have taken off in the first place. And why would Starbucks want to give consumers an excuse to visit its stores less frequently, and indulge in a Starbucks experience that may very well be less satisfying than a professionally brewed cup?

In all honesty, I'm beginning to wonder whether I should sell my shares of Starbucks. Our Foolish disclosure rules forbid me from doing so anytime soon, and I'm a long-term investor who tries to be patient, but the more desperate Starbucks sounds in the short term, the more I worry about its long-term prognosis. Maybe Starbucks should just do its painful cost cutting, take a few deep breaths, and not rush into anything. I have no problem with trying to come up with good ideas that may be contrary to conventional wisdom, but the appearance of rushing into bad ones is starting to seriously worry me.

Howard, are you feeling all right?
Our economy is admittedly in terrible shape. Is Howard Schultz panicking, getting desperate to show that management's doing something, anything? (If so, he wouldn't exactly be alone -- the government, and many companies, seem to be doing likewise.) Schultz talked about getting back to Starbucks' roots and soul, but so far, none of those grand ambitions have come to pass. I fear that Starbucks will ultimately tarnish its brand with odd moves like Via. However long it takes before the economy gets better, I suspect a lot of companies will regret dragging their brands through the metaphorical mud for relatively short-term improvements.

Starbucks' strange decaf plan floored me recently, and earlier this week, we learned about Starbucks' plans for value meals like McDonald's (NYSE: MCD  ) offers. Many of our Foolish readers thought that value meals were a good strategy, according to poll results, but I'm still skeptical. I think many high-end companies now resorting to desperate measures risk destroying many of their key differentiators -- damage that will be hard to undo once the economy recovers.

Once again, I'll open up the topic to our Foolish readers. If you have an opinion, please take the poll below, or feel free to leave some comments in the box below. Maybe Starbucks instant coffee isn't as bad an idea as I think it is. If you're eager to take a sip of Via, let me know.

Starbucks is a Motley Fool Stock Advisor recommendation. J. M. Smucker and Starbucks are Motley Fool Inside Value picks. Kraft Foods is a Motley Fool Income Investor recommendation. 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 (33) | Recommend This Article (37)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 13, 2009, at 3:16 PM, DavinsOpinion wrote:

    I think Starbucks value meal is a GREAT idea. I work at Starbucks and stockholder. I have asked many of our customers what they think and everyone loves it. As for the instant coffee I am unsure. Starbucks coffee beans are not our big seller and I don't know that their will be much more interest in instant coffee. People come in because of the atmosphere and service. Not to buy coffee beans to make themselves. As for the new Decaf policy, I completly agree with it. It will save Starbucks a good amount of money. We rebrew coffee every 20 min. The percentage of decaf sold is very VERY minimal so the ends up being a lot of wasted coffee. I belive overall Howard is making some good decisions and they will be ajusted as the sucess of new products and policy.

  • Report this Comment On February 13, 2009, at 3:32 PM, artistx wrote:

    When I first heard Sbux was serious about launching instant coffee (they've been trying to perfect it for many years). I thought H.S. was crazy. I've been at Sbux for over 11yrs and this is the first instant coffee that tastes great. You will be surprised. Howard wouldn't let this go to market if it wasn't excellent, Sbux isn't that desperate. The launch of this now has nothing to do with the current economic climate, this product has been in the works for years, it just happens to be ready now.

  • Report this Comment On February 13, 2009, at 4:00 PM, funkycool wrote:

    I am a 15 year SBUX and also thought that he was crazy - I work at the HQ in Seattle and was asked to try a cup of coffee when I was walking through the 9th floor commons a year or so ago. It tasted like Starbucks House blend - medium body well rounded - I then tasted a another coffee same thing. Months later I found out that the first coffee that I tasted was what they called a souble or instant coffee. I am not kidding, don't know how they made this stuff but it's actually intant coffee that tastes like the real thing - much closer than Diet Coke tastes to real Coke I was impressed. This is the first that I have heard of it since last year. Not sure if there is a market for it or how it will impact our brand but the product was excellent if you like Starbucks Coffee.

  • Report this Comment On February 13, 2009, at 4:57 PM, nin4086 wrote:

    I think it depends on the taste...if it tastes significantly better than other instants, it can be monetized in many ways( by selling it in grocery stores etc). Having small packets available in *$ stores is a good way to test it in the market. Sure it can fail, but you never know what consumers will like until you test it.

    Of course, you have to be careful not to tarnish your brand with your experiments. And by not calling it Starbucks Instant, *$ has done just that.

  • Report this Comment On February 13, 2009, at 6:11 PM, TAB7119 wrote:

    I think it might be a great idea. I have often traveled to areas when there is no Starbucks Store (I know with all the talk in the press you'd think they are everywhere, but they are not) and I have craved a good cup of coffee with out the hassle of a grinding, brewing etc. I say it is about 10 years too late. Had it been around then, i would have saved a lot of frustrating drives in unfamiliar towns looking for a Starbucks.... or anything other than bad hotel coffee. P.S. Stop bashing starbucks for trying new things. If they were not trying out new ideas I bet YOU'D be the first to complain.... I can just imagine how it would go...

    "In these tough/trying/unprecedented economic times when all other retailers are reaching out to their cash-strapped customers by providing value options what is starbucks doing????" BLAH BLAH BLAH

    Print something useful and stop whinning. I used to respect motley fool for intelligent information and contributors. Lately your all just a bunch of whinners with no more advice than the average guy on the street. Stop contributing to the chaos and give us something to look forward to.

  • Report this Comment On February 13, 2009, at 7:00 PM, CoffeeLover1 wrote:

    Funny how all those still employed by SBUX are still feeling the an Ex-Partner I feel that once those loyals are on the other side (unemployed) all of this will seem just as desperate as it does to me....the reason I lost my job is because too little was done too food nation is upon us at this point....when times are tough consumers consume cheaper goods...No matter how good the coffee tastes it's not worth the money Starbucks charges....I love their coffee but they should have reduced the prices way back when all this it's just desperate.

    No matter how much the price drops, in the mind of the consumer we will always think of Starbucks as too good for our pockets...unless you put out instant you're just another generic brand :)

  • Report this Comment On February 13, 2009, at 8:42 PM, greenwave3 wrote:

    If Starbucks sells more instant coffee than their $4 lattes, you'll have H.S. to thank for a 40% drop in sales.

  • Report this Comment On February 13, 2009, at 9:22 PM, ciaobella2008 wrote:

    As a shareholder I can only ask that Howard Schulz resigns. The entire Starbucks toucht feely culture - we care about our customers and employees is out the window. There is no partnership involved in the relationship. It is just a facade. When was the last time that you went to a starbucks and you felt the barista behaved as the cofee shop owner who cares? The entire business model is broken. Getting into CPG is probably a good move but why do you need to own the stores? You need to fire Howard and all his SVP's and VP's. The entire leaderhip is hopeless. Bring in some McDonalds talent and sell franchises to small business owners who will ensure their baristas care.

  • Report this Comment On February 13, 2009, at 9:23 PM, pumba2003 wrote:

    What the author of the article seems to forget is that customers buy whole bean coffee from the stores, as well as espresso pods, tea bags, etc. so why not instant coffee packets...duh!!! You can never underestimate the laziness of the American consumer, so for those who don't feel like waiting for a pot to brew, or take 5 minutes to prepare a french press--and there are millions of those in this country alone--a quality cup of instant coffee is heaven sent.

  • Report this Comment On February 14, 2009, at 5:24 PM, kforred wrote:

    I was going to hit the "doesn't matter" button in the poll, but I don't hate starbucks (stockholder). I don't think this is a make or break issue. Like Pepsi's Jazz (another in my port), they tried it, it must not have worked, because, regrettably, you can't buy it anymore. Doubt it hurt the company.

    I do agree, Starbuck's doesn't sell coffee, it sells the experience of drinking coffee, so this is a departure. Loved the <everybody's doing it, including the gov't> analogy. I'm thinking Starbucks on safer ground.....

  • Report this Comment On February 14, 2009, at 8:56 PM, DETBJR wrote:

    I don't think adding the value meals makes sense. Go to a McDonalds. Then go to a Starbucks. I don't see how the folks who enjoy the ambience of a coffee house are going to want fluourescent lights, yellow, red, and clowns. If money is an issue, they will just buy a less expensive drink at Starbucks. My point is to compete with McDonalds by becoming more like McDonalds is not smart - you can't do it. Instead Starbucks should start being more like Starbucks. That's really what differentiated them from everything else and made them successful. Everything is custom and special there. Price for it and you'll be just fine.

  • Report this Comment On February 15, 2009, at 2:30 AM, wippling wrote:

    So according to the first comment they 'rebrew every 20 Minutes', that means that 50 percent of the time you get a 'coffee' you have the chance of it being older than 10 minutes. I'm sorry, but this is not coffee anymore, but everybody after his own taste...

  • Report this Comment On February 15, 2009, at 6:24 AM, BuckheadCoffe wrote:

    Hoopa, the Big Mermaid in Seattle is completely and so utterly taken with $$$ that the company has lost it's panache in more ways than one.

    OMG and WTF??? Howard Shultz must be incredibly bored, and instead of finding ways to help others and solidify the commitment of his followers to something

    that will bring value to the brand, he comes up with Instant Starbucks. I guess investors are becoming a little antsy with all of the storm warnings. Via, the coffee lighthouse, undoubtedly the beacon of hope to keep the Big Mermaid from further floundering on the rocks in the storms of idiocracy! Everybody knows that Howard has always been a bit peculiar. But this is real flair. And I thought the whole eliminating the decaf after lunch was good too. But I though most people drink decaf later in the day to still enjoy coffee without the cafffeine?

    I guess I've lost my mind!

    I'm wondering; if I mix Via with milk do I still get to call it a Charccino?

    Howard, we raise our cups to your Foolishness!

  • Report this Comment On February 15, 2009, at 9:33 PM, catfyre wrote:

    I have never tasted an instant coffee that tasted like coffee. If Starbucks manages to do it, they'll have it made. I'd line up for it.

  • Report this Comment On February 16, 2009, at 9:26 AM, JGBFool wrote:

    Well, this new instant coffee might be okay for making red-eye gravy, but I probably won't drink it myself unless I get a free sample sent to me.

    I agree with the previous commenters who said this reeks of desperation. I'm glad I sold my SBUX shares (I wish I had listened to Munarriz and sold them earlier, though).

    As for the commenter who said that coffee more than 10 minutes old isn't "coffee"-- I would agree if it was left in the brew pot on the warmer, but Starbucks puts the coffee in thermal carafes after it is brewed, and the taste doesn't deteriorate quickly in those. However, since the "coffee" in question is decaf, I don't really think it ever was truly "coffee".

    Twenty years from now, people will talk about Starbucks the same way they talk about Mr. Microphone and Pet Rocks today.

  • Report this Comment On February 16, 2009, at 12:50 PM, funkycool wrote:

    LOL - JGBF you almost made me spit my coffee out. I had not heard a reference to the pet rock in more than a decade! Many people act like the Starbucks thing happend overnight - like all of the stores appeared in a year or so. I know that many out there have doubts since the company had unpreceedented scuccees form the initial IPO in 1991 through 2006. With the changing tastes of the US consumer it is understandable that SBUX would hit bumps in the road from time to time - this bump is backed by a lousy economy making things much worse. For the holders out there keep the faith we will find our stride and deliver solid value as things begin to settle down. P.S. CoffeeLover1 sorry you lost your job - hope you are doing as well.

  • Report this Comment On February 16, 2009, at 12:55 PM, Deepfryer wrote:

    I liked the decaf policy, but this seems like an act of desparation. Instant coffee sucks. It's a stupid idea.

  • Report this Comment On February 16, 2009, at 6:03 PM, jtmccully wrote:

    A great company and great stock desperately trying to hang on to the glory days. Never, never would I use instant coffee - I'd rather go without. When I want one cup (or more) I use my Aerobie AeroPress.

    The big crime is the two choices of drip but now one is always Pike Place. I am a die-hard Starbucks fan, but if I have to choose between Pike Place and Estima or Cafe Cielo I just skip it all together. I can go to Caribou, Tullys or any number of other places and get sweet, fruity, spicy coffee. The brand will be lost in trying to be all things to all people.

  • Report this Comment On February 16, 2009, at 7:11 PM, jenbobbin wrote:

    I wonder whether or not the poll you took would be considered statistically accurate since the popular vote coincides so strongly with the opinion of the author's. I DO, however, think that Starbuck's is making a serious mistake with instant coffee. As stated, instant has a bad reputation. In my opinion that reputation is well-deserved. If Folgers can't get it right, why would Starbucks think they can? Sorry Starbucks, that sucks.

  • Report this Comment On February 16, 2009, at 7:57 PM, eltatio wrote:

    I occasionally use instant coffee, backpacking trips, on boats etc and currently use Folgers. When this comes out I will buy and use it and it will have no effect on my store visits. This product fits a niche that I believe is wide open for a quality product.

    I also use the Medaglio (sp?) which is instant espresso, if I saw it on the shelf at Starbucks with their label on it I'd buy it by the case.

  • Report this Comment On February 17, 2009, at 5:06 AM, trentbigelow wrote:

    The big picture, I'd agree with - Starbucks must maintain its two major elements of its identity: 1) affordable luxury espresso bar; and 2) the "third place" experience/environment between the office and the home, to socialize, relax, recharge, or be productive.

    Although I, too, would take a freshly pressed shot over the canned or instant alternative, let's keep in mind what their purpose is: in Europe, instant is not seen as the 1970s antique we've come to know. Nescafe, while lower-end, is certainly enjoyable enough - especially as on-the-go alternative to teabags.

    As for the meals, I see potential in this too...but Starbucks should focus on its barista beginnings. I think it would be wise to have high design Starbucks kiosk carts (like Illy's Push Button House)...

  • Report this Comment On February 17, 2009, at 5:16 AM, expatriot08 wrote:

    I think the instant coffee is a good idea. In South America and Europe instant is just as common as a bag of beans. We know starbucks is overbuilt in the US. The growth market for them is still overseas. I don't know anything about asia but this is possibly a good product for that area as well.

  • Report this Comment On February 17, 2009, at 6:45 AM, jdgee2 wrote:

    If "going green" is popular like many people profess, than instant coffee uses less energy to brew and limits the waste of tossing old unwanted unloved coffee. Now... how does one create actual "green" coffee ? "yum-yum"

  • Report this Comment On February 17, 2009, at 4:01 PM, tablespace wrote:

    I think the instant coffee move is a great one especially for overseas markets where instant coffee is more popular and also if Via is a much better product that the rest, i..e Nescafe, Maxwell House. However, they would have to consider selling it in grocery stores and for a lot less than $3.00 for a 3 pack. And come on Starbucks, selling coffee in individual sachets is not environmentally friendly. And, Ms. Lomax, the Keurig system might be better but it too is extremely environmentally unfriendly. I grew up on instant coffee. We only brewed coffee from grounds on the weekends. Now, I'll make a cup of instant in the middle of the day if I want something warm to drink. I like good coffee but I'm not a coffee snob.

  • Report this Comment On February 17, 2009, at 6:56 PM, PPDX wrote:

    Like some said here it does depend on the taste and also it will be sold in markets as well. Sometimes you only have access to instant coffee. Is priced under a buck!

    But mostly the D & Int market for instant coffee is $17 billion a year!! Why not grab some of that marketshare?

  • Report this Comment On February 18, 2009, at 7:30 AM, franklybenjamin wrote:

    I dunno, they are offering it at a price premium to that of comparable instants, thus it is *technically* a luxury product, and as such is not out of step with their brand. Could be considered more of a "Starbucks" kind of move than Pike's Place. Probably won't hurt their image as much as the idea initially suggests.

  • Report this Comment On February 18, 2009, at 12:43 PM, KennyO wrote:

    I volunteer at an antique air and auto museum where many of the stories of manufacturers of the 30s are: they were selling big airplanes, business for big airplanes dried up so they changed to building small airplanes. They were not alone and the market for small airplanes was saturated by all the existing and new builders so few of them survived and those were much-changed, rarely for the better. While Starbucks products differ greatly from airplanes, setting their sights on a downscale, presumably larger, market reeks of familiarity.

  • Report this Comment On February 19, 2009, at 1:50 AM, sgmorr wrote:

    I'll hold judgement on VIA until I get to taste it.

    Has anyone out there tried making a single cup of coffee at a time using a simple drip funnel cone. It's just a funnel shaped plastic device into which a cone paper filter is placed. I put espresso grind coffee into the cone and pour in hot water. It's fast and quite good.

  • Report this Comment On February 19, 2009, at 11:03 PM, AntonB001 wrote:

    I see how VIA could expand the product offerings at Starbucks. I too have traveled to countries where there is no Starbucks or any place where you can get a normal cup of coffee (try Kiev, Ukraine... only place is TGI Fridays for example). Would have been nice to have a decent cup o' joe.

    On the other hand, I also think that in SBUX's case, we the consumers knowingly pay extra for the brand's snootiness and feeling of exclusivity (it's only a perceived feeling of exclusivity). Sorta like paying $50 MORE for a Polo shirt from Polo rather than the generic no emblem'ed variety.

    The baristas already have their hands full in the mornings, how much longer will the wait time be if they have to heat up "value meals" too?

    Stick to what you do best, if I want a value meal, I'll go to MickeyD's.

  • Report this Comment On February 20, 2009, at 7:29 PM, dfe51 wrote:

    When I've traveled in the Caribbean in the past, to Guadeloupe, for instance, the small "less expensive" hotels I've stayed at served an "instant"coffee which I think was a concentrate, but was much better than your average diner coffee.

    If Starbucks VIA is that good, I will purchase it to have it on hand when I'm feeling lazy or traveling and only have the little 2 cup make it yourself drip pot with the 2 year old packet of ground dark stuff in the room.

    I am somewhat horrified to find Starbucks peddling instant coffee, but am also amenable to buying it if it is really above average.

  • Report this Comment On March 24, 2009, at 3:09 PM, peteralt2 wrote:

    Hey don't knock it to you try it...I think a brilliant idea which has come full circle....taste absolutely great and I even used a pack in my chocolate desserts for rich coffee if it's more convenient grab some to sure beats Maxwell House Coffee!!

  • Report this Comment On April 29, 2009, at 11:25 PM, BTShine wrote:

    I drink 2 Via's every day and "I'm lovin it!"

    (bad attempt to make a SBUX vs. MCD's joke)

    Really, I do drink 2 Via's each day, and I do love it!

  • Report this Comment On May 05, 2009, at 10:22 PM, SinCityScott wrote:

    So, how narrow-minded are MF authors!? Ms. Lomax finds it a "tough-sell". Well, is it OK if I don't? In fact my wife and I both received our free samples of Via...via the web:) and holy java batman! Unbelievable really...not only was it excellent for 'instant', it was excellent for COFFEE. We have since purchased boxes of Via and have one in the early evening at least 3 times per week, and for around .60 per cup it's awesome!

    The kicker is that I still hit my neighborhood 'Bux 7 mornings per week for my Iced doppio ristretto, two pump vanilla w/ a splash of breve. BTW that lovely drink I have each morn' is just $1.99...try it!

    We love Starbucks- the environ- the beverages (especially the world best espresso) the ritual and exactly how Different it is than a nasty, stinky, Mickey D's, 7-11, donut shop etc...

    Btw: Coffee is 1.60 per cup and .50 for a refill and its excellent Joe. There is nothing close to the standards set by this chain and if you're the type that'd rather get your morning beverage at a fast food joint, I'm not speaking to you anyway. ~Peace~

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