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March 31st, 2022
By: A.J. Gastélum
Coffee is a staple in our everyday lives. Whether for its taste or its functionality, Coffee has become a part of everyday culture in the United States. How did coffee gain such a following? The answer lies in coffee shops.
Coffee shop culture
Starbucks is the prime example of how the US adapted coffee in order to make it fit changing lifestyles. The original coffee shop idea was based on convenience. People would stop by in the mornings and pick up their daily cup of coffee, and quickly leave. This was fine because people drank coffee at their homes, workplaces, or on the go. But the creators of Starbucks saw the opportunity to change that.
Starbucks entered the market in the 1970s. After successfully running as a small coffee shop in Seattle, the company set its sights higher. Starbucks introduced coffee “camping” culture, or the idea that a coffee shop is a place to sit, talk, and work. This new location between work and home was dubbed the “third place” concept. As Starbucks grew, it spread this concept across the US, and onto international venues. It was a smart business model that allowed Starbucks to keep customers in the store for longer, increasing their chance of buying more coffee. They introduced a variety of food options and created a comfortable atmosphere for people to enjoy spending time in.
Success and Sensory Experience
Starbucks has a very distinct sensory experience that makes its marketing comfortable and recognizable. When you walk into any Starbucks, you are instantly greeted with a very mellow and relaxed atmosphere. This is the result of multiple sensory experiences curated for you as the customer. The music for the stores is sent straight from Starbucks corporate, the designs are updated regularly, and the menu options are standardized. In short, you know exactly what you are getting when you walk into any Starbucks in the US.
One notable example of the impact of the sensory experience is shown by the losses Starbucks was taking in the early 2000s. At the time Starbucks was facing heavy competition from Dunkin' and McDonalds, who were undercutting premium prices and bringing the flavor of Starbucks into question. In their rapid expansion Starbucks had ignored the customer experience in favor of faster, cleaner, more efficient coffee production. To fix the problem they brought back CEO Howard Shultz, who summarized the problem in an internal memo.
“We achieved fresh roasted bagged coffee, but at what cost? The loss of aroma -- perhaps the most powerful non-verbal signal we had in our stores; the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, and once again stripping the store of tradition and our heritage?”
Shultz goes on to say that the company underestimated the importance of the sensory marketing that made it so iconic. Starbucks returned to freshly ground production, and eliminated certain food items that took away from the smell of coffee. They returned to the idea of leading coffee culture as opposed to making the fastest cup of joe.
Continuing to Adapt: Sustainability
Despite being the largest and most successful coffee chain in the world, Starbucks has continually adapted to maintain the lead in the coffee industry. They have proven that even a tried and true business model must change with time, and have kept ahead with seasonal drinks, new ingredients, and most recently, a heightened focus on sustainability. Just this month Starbucks announced plans to phase out their iconic paper cups in favor of reusable or washable options. This came as their deadline to reduce waste by 50% by 2030 rapidly approaches. Despite the cup being one of their most iconic symbols, Starbucks has made the decision that the image no longer aligns with what they stand for. Will they walk back on this decision? And will it really be worth it in the long run? The next few years will prove vital to answering those questions.
AJ Gastélum is one of the Co-Content Directors this semester. He is a sophomore at NYU Stern studying Marketing with a minor in Studio Art. Check out his other articles on the blog!