Eight months after Starbucks Corp. began selling its “Via” brand instant coffee, testing it in Seattle and Chicago, today Starbucks will begin a nationwide rollout, offering the instant coffee drink to the rest of the country and in its Canadian stores.
Starbuck’s is running company's first-ever television ads, and also distributing to roughly 1,500 sites outside its stores; this effort for the Via launch shows just how much Starbucks wants to own a stake in the $21 billion worldwide instant coffee market.
"Based on the success we've had, we feel strongly that we're sitting on a very big opportunity," said Starbucks CEO Howard Schultz said during a conference call with journalists. "What's going to sell Via at the end of the day is that (it) delivers in the cup. Most people will not be able to tell the difference."
Instant coffee is popular in Europe, and through the rest of the world — instant brands account for as much as 80 percent of coffee sales in the U.K., here in the US, instant coffee has not won over coffee drinking Americans. Instant is generally viewed as an inferior product here in the US, a knock-off of drip-brewed beverages.
Starbucks executives want that image to change. They are hoping, and betting on, with this high visibility rollout, that the skinny cylindrical 3-packs and 12-packs of coffee that dissolve in water will eventually be as popular with consumers as its packaged coffee is now. The coffee is available in two flavors now, and Starbucks expects to introduce more varieties in the future.
Starbucks is getting together diverse vendors like outdoors store chain REI and office supply chain Office Depot Inc., hoping it will help the company get the product in hands of new customers. Via also will be sold inside general retailers like Costco and Target. The effort to find new customers is also taking to the air, where passengers onboard certain United flights on Tuesday will be able to sample the drinks. United will sell Via packages onboard later in the year.
Next year, Via will appear on grocery store shelves, already a strong market for Starbucks pre-packaged conventional coffees. Introducing Via in such a high-profile way comes at a particularly tough time for Starbucks. Due to the recession and consumer spending cutbacks, Starbuck’s has seen its revenue slide for the last three consecutive quarters, and profits have fallen in five out of the past six quarters. It could use a big new hit product, maybe Via could provide that “Buzz” to get the chain rolling again.
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