Coca-Cola may take on Starbucks
Posted by TheShot on 31 Jan 2006 | Tagged as: Consumer Trends
The Atlanta Business Chronicle reported today that “Coca-Cola may take on Starbucks.” I used quotes here because the overlap of both businesses isn’t significant enough to warrant their headline — or at least what it leads you to believe.
The story is this: Coca-Cola is always looking for growth opportunities (read: cash flow) in anything you can ingest in liquid form. Soda, water, juice, coffee, gasoline … it really doesn’t matter. Apparently, Coca-Cola has expressed a bit of envy over the consumer-inspired growth of the specialty coffee industry and want a piece of the action for “this thing of ours”.
To this end, Coke filed five U.S. patent applications in 2005 for single-serving coffee pod designs, single-serving brewing machines, and a system for steaming milk to make cappuccinos and lattes. The invasion of the “pod” people has only just begun (I’ll save that for its own article), and Coke knows it. Which is why it is bothering a second attempt at the coffee market after its Planet Java fiasco five years ago.
Despite all these reports, the fact is that Starbucks — for a point of comparison — is heavily about the point-of-sale, the café atmosphere, and the emphasis on a service business where beverages are prepared of a quality that (despite worthy criticisms) beats what the average household can instantly produce. Sure, they may dabble in retail sales of coffee beans and equipment to consumers, but that’s ancillary. Meanwhile, Coke is all about the bottle and the can. As a business, their core competency is in the worldwide production and delivery of standardized liquids that come in small-serving containers.
Arguably, any successes Coke might have in coffee will have much more of an effect on supermarket Frappuccino sales than on what most people think of when they think of Starbucks. As new coffee-related products are introduced later this year, such as Coca-Cola Blāk and Pepsi Café Chino, these soda bottlers must believe they are relevant enough to syphon off the successes of specialty coffee. Unfortunately for them, I expect them to learn the hard way that it’s not just about the convenience of a mass-produced beverage, designed for lowest-common-denominator tastes, with a label slapped on it to provide the illusion of choice.
When the consumer wine revolution broke Americans out of thinking just in terms of “red versus white,” what thrived wasn’t more readily available forms of Boone’s Farm. Consumers developed more discerning tastes and rewarded those products that catered to them. The rest was just…. blēk.
5 Comments »
on 19 Mar 2006 at 7:00 pm -06:00T 1.TheShot.coffeeratings.com » Meet Coke Blak: Soda with a coffee kick said …
[...] Refrigerated beverage fads come and go faster than Pepsi A.M. So what really makes me curious is what Coke still has up their sleeves — given all their recent patent applications for single-serving coffee pods, pod brewing systems, and a system for steaming milk. [...]
on 19 Apr 2006 at 11:08 pm -05:00T 2.TheShot.coffeeratings.com » New coffee launched by Coca-Cola and Godiva said …
[...] Coca-Cola continues its coffee beverage push, recently announcing a drink to be launched in July that’s “more decadent than just plain coffee”: New coffee launched by Coca-Cola and Godiva - Drinks Business Review. Undoubtedly, it will be another Coca-Cola BlāK — meaning that we should expect consumers’ short attention spans to give this a shelf life until about September 2006. [...]
on 02 Sep 2006 at 6:58 pm -05:00T 3.TheShot.coffeeratings.com » Coca-Cola’s next ‘real thing’ said …
[...] So Coca-Cola finally revealed some of what they’ve been up to with their recent patent frenzy: Coca-Cola’s next ‘real thing’: lattes - Sep. 1, 2006. Next Wednesday in Toronto, Coca-Cola plans to formally announce their foray into “premium” brewed tea and coffee. [...]
on 17 Nov 2006 at 5:44 pm -06:00T 4.TheShot.coffeeratings.com » Coca-Cola ventures into premium specialty coffee said …
[...] ChannelNewsAsia published an article today on Coca-Cola’s venture into coffee distribution in Singapore: Channelnewsasia.com - Coca-Cola ventures into premium specialty coffee. Coca-Cola has been investing in coffee service for quite some time. In previous posts here, we’ve covered their development of Far Coast pod systems — among other patents. As one of Wall Street’s darling growth stocks, and a stock represented in the Dow Jones Industrial Average, Coke continually seeks out new revenue streams to keep the party train going. [...]
on 20 May 2007 at 2:30 pm -05:00T 5.Espresso News and Reviews - TheShot.coffeeratings.com » Coca-Cola FoodService Partners with Juan Valdez said …
[...] We’ve been monitoring Coca-Cola’s murky interests in the coffee business for some time now. The most obvious example being their patent filings in recent years, which has lead to — among other things — their launch of Far Coast coffee pod and machine systems for food service retailers. [...]