Starbucks' instant gratification for $1

The coffee chain announces the release of 'Via' Ready Brew, an effort to attract penny-pinchers back to the brand.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Catherine Clifford, CNNMoney.com staff writer

ready_brew.03.jpg
Starbucks instant coffee is set to hit select locations March 3 and will be available nation wide by fall of 2009.
What should the government do about GM and Chrysler?
  • Loan them more money
  • Force them to restructure
  • Force them into bankruptcy

NEW YORK (CNNMoney.com) -- Starbucks, home of the $4 latte, has introduced a new product to keep cash-strapped consumers sipping its brew.

The coffee chain said Tuesday that it would soon start offering instant coffee for less than a buck a cup.

But don't expect any barrista to serve you up a brew because you'll have to mix the beverage yourself.

The instant coffee packages are intended for customers to buy at the store and then make at home or the office.

The national rollout for the instant coffee is set for the fall, but on March 3, the instant coffee will be available in the Seattle area, where Starbucks was originally founded, and in Illinois. The instant bags will hit select stores in London on March 25.

Getting into your house

The individual packets of instant coffee also push Starbucks further into your kitchen. The grab-it-on-the-go brand does not have a large footprint of coffee at home.

According to Starbucks, 66 billion cups of coffee are drunk every year in the U.S. and a full three quarters of those cups of coffee are enjoyed at home. The other 25% of coffee is drunk at the office, traveling, or in a coffee shop. But Starbucks only grabs a 4% market share of the coffee drunk in American homes.

"This is a big move for us - the opportunity to reinvent a category, create new rituals and grow our customer base is substantial," said Starbucks chairman, president and CEO Howard Schultz, in a written statement.

Internationally, instant coffee is a little bit more popular. About 40% of global coffee sales are instant coffee, according to the Starbucks release. That represents about $17 billion in sales. In England, 81% of java sold is instant and in Japan, 63% of coffee sold is instant. Starbucks is hoping to capitalize on that demand.

Beating the stigma

Starbucks (SBUX, Fortune 500) claims that its "Via" Ready Brew is going to break the stereotype that instant coffee is painfully terrible.

However, some consumers are skeptical about the taste of instant coffee even though the instant coffee packets promise to be cheaper.

"I have never cared for instant coffee," said Father Douglas Crawford, 48, a Catholic priest from Westchester, NY. "It doesn't seem to have the integrity of brewed coffee."

Another customer said that she primarily goes to Starbucks for the lattes because they are a little luxury. "Generally, I only go to Starbucks if I want a treat," said Aimee McDermott, 32, a freelance editor from Manhattan.

If nothing else, the coffee is cheap. The instant coffee packets will come in packs of 3 for $2.95. Packs of 12 run $9.95.

That was at least enough of an incentive for one law student. While Ravi Kantha, 23, who lives in Manhattan, doesn't drink much coffee, she says "if it is cheaper, it is probably worth it."

And one devotee said she would sample the instant coffee because she trusts the maker. "I would try it because it is Starbucks," said Vlora Shehi, 20, from Brooklyn. She works at a coffee and cookie shop and was drinking a caramel macchiato. Typically, she said she puts a premium on taste. "Price doesn't matter. If it tastes good, it tastes good."  To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
Meet the kids dressed as Oscars red carpet stars By now, you've seen the red carpet looks from the 2015 Oscars. But you haven't seen 5 year-olds dressed up like A-listers at the awards, until now. Photographer Tricia Messeroux and designer Andrea Pitter recreated the pint-sized looks in just 36 hours. More
Flying economy doesn't have to be miserable For those willing to shell out just a little extra, several à la carte services offer experiences usually reserved for First Class passengers. More
Consumer Reports' Top Picks - American cars are back The magazine's favorite cars include three American models for the first time in years, thanks to a big boost from Tesla. More
Sponsors