Starbucks is going instant!

by Chee Leng
(Singapore)

The competition is getting stiff. Starbucks -the largest coffee chain in the world is entering the biggest and the most aggressive competed coffee market -instant coffee.

It is difficult to say at this moment if Starbucks Via, the new instant coffee would make any impact at the market leader -Maxwell House and Nescafe, but I am sure it would definitely erode the profit of some backyard brands.

By backyard brands, I am referring to home grown roaster in a particular country with their own unique way of roasting and grinding.

Take for example, Singapore, it would be coffee company like Aik Cheong and Super coffeemix. If the retail price remains at USD2.95 for a three pack, it is very competitive and some customers would switch because of novelty and of the brand.

The novelty factor should sustain good growth for the first half year when via is being launched. The rest would depends on Starbucks distribution and promotion effort.

The initial launch is being done at Omini and marriot hotels, REI and United Airlines flight, and if this is being replicated across the countries, the impact on current player should be felt, Starbucks Via should be able to grab some market share...