Milwaukee Specialty Food and Coffee

Coffee Stocks: Move to Home Brew

Starbucks' earnings forecast has been lowered after its internal customer surveys showed that consumers are brewing more coffee at home, according to this article in a Canadian financial publication.

Ristretto: New Alterra HQ

-This afternoon, Mary posted about Starbucks' announcement of its decision to close 600 stores. Milwaukeeans may note the ironic contrast with Alterra's grand opening of its new HQ on N. Humboldt Ave.  Also, this past weekend, I realized I hadn't been to an SBUX in a month or so, and somehow felt like I ought to check in.  (More to the point, the Strawberry Fest was being held in downtown Cedarburg, so any coffeehouse there was out.)  The Pike Place decaf was just wretched.  It had a weird soapy taste to it; perhaps the ceramic cup hadn't been rinsed properly.  I'd always thought of SBUX as a predictably mediocre product and an unpredictably bad customer service experience, especially depending on the store.  In Cedarburg, I didn't have any problem with the customer service, but the product was off-the-charts bad.  The last time I left a cup of coffee half-finished was at McDonald's, so if I ever find myself in that situation again, I may as well head straight to McD's.

Caribou Coffee Stock Drops 4.1%

Stock of US coffee giant #2, Caribou Coffee, dropped 11 cents (4.1%) in trading today after it reported a wider first-quarter loss than the prior-year period. Nevertheless, Morningstar, analyst of all things traded, still gives the company a positive review, stating, "We think this stock could be a bargain, but only for investors with a strong appetite for risk." It's like they're speaking directly to me!

With Starbucks experiencing similar stock woes, it's clear that none will be spared the carnage of this non-recession.

Link (via Coffee Talk)

Coffee Stocks: 10%?!

Starbucks' stock experienced a shocking 10% drop today, as it issued poor first-quarter numbers and a profit warning.

Coffee Stocks: Howard Schultz returns as Starbucks CEO

Starbucks has fired CEO Jim Donald and returned Howard Schultz to the post.

If you go to Starbucks.com, a letter from Schultz is on the main page.  Here's his letter and voicemail to partners (employees).

Perhaps setting the stage for this development was McDonald's announcement that it will have espresso machines and baristas in its stores.

Many have expressed the opinion that the best route for Starbucks would be to split into two concepts: high-end stores and, um, what they have now.  I agree with this assessment.  There is already a noticeable difference between the first Milwaukee stores and the most recently opened ones (a continuum from comfy to distinctively un-comfy).  Customers are obviously able to deal with that without too much brand confusion, so why not take that to its logical conclusion and spin off a connoiseour brand? 

Short of that, user "REDBEAN" offers this good advice over on Starbucks Gossip:

Why not have "artisan" stores in neighborhoods where they make sense? La Marzoccos, no drive-thru, a more comfy environment, no ovens, local pastries, a more limited, basic menu. Attract partners who thrive in that environment and customers who are willing to wait a few more minutes for their drink.

Put super automatic espresso machines, breakfast sandwiches, DTs (drive-thrus-Ed.), a decor that would hold up to high traffic and all the foo-foo drinks in stores that are simply there to satisfy the masses as quickly as possible.

Give stores the power to conform to (or compliment) the environment they're in. Read the neighborhood and the customer base and give the people what they want.

Coffee Stocks: New Year, Not the Same as the Old Year

Today, oil futures hit the landmark $100 a barrel.  Perhaps not coincidentally, Starbucks stock basically hit an all-time low.  Who knows what else may happen in light of Thursday's Iowa caucuses. In addition to all of the existing divisions in American society, maybe now we'll see another one: those who are too scared sh*tless to go out and spend money and those who aren't.  Politically speaking, some who want a Democrat in the White House next year might willingly greet the prospect of a rough economic year.  Remembering that high oil prices effectively serve as a tax one everything, It's almost certain to be just that.
 

Coffee Stocks: Starbucks' Wins

I believe that any discussion of Starbucks' woes must also include a discussion of its wins.  The stock has had a tough year, but nothing like that of its nearest competitor, Caribou.  Within the last couple weeks, Caribou's CEO stepped down—with no positive benefit on the stock price.

Rather than comparing or contrasting Starbucks and Caribou, I want to focus on what has brought Starbucks to preeminence in the industry in general.  The points I'll mention are even more firmly rooted in personal opinion than those in my assessment of Starbucks' woes.

1)  Starbucks has a unique ability to create an outstanding retail experience, giving it a platform from which to sell a variety of items that are not directly coffee-related.

Coffee Stocks: Starbucks' Woes

It's been a rough year for Starbucks stockholders (see picture).  One major change that has already been introduced is that the company has launched a national advertising campaign.  Other tweaks are doubtless also on the horizon.

Here's my take on the situation:

1) The novelty is wearing off—I think most commentators think this is too obvious to mention (and would explain the crowds Starbucks draws in Germany, for example).

Coffee Stocks: Starbucks Hovering Around 52-week Low

http://finance.google.com/finance?q=NASDAQ:SBUX

Coffee Stocks: Caribou CEO Replaced

Breaking news—more on this later!

http://www.bizjournals.com/twincities/stories/2007/11/12/daily10.html