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[13 comments]

Changes on the menu at Starbucks

April 2, 2014

If only Starbucks could nail food. Imagine how big it would become then. The coffee giant, which has made repeated attempts in recent years to find the right menu items to pair with its java drinks, is making adjustments again. This time, Starbucks is bringing back some of the items removed from its menu when pastries and other items were added from La Boulange, the bakery business Starbucks acquired in 2012 for $100 million.

According to Bloomberg News, a vocal group of customers made their unhappiness known when Starbucks took some of their favorites off the menu. Complaints about the new batch of products include high prices and small portions. Customers seem to be divided on quality and price, with some complaining that the items are "too fancy" or taste like something "you might get on an airplane."

Starbucks is using La Boulange and other existing suppliers to recreate the items it is bringing back to its menu. Returning products include customer favorites such as banana and lemon cake. Whether the changes will be enough to raise the bar on Starbucks' food performance remains to be seen.

FINANCIALS:     [NASDAQ:SBUX] [ ]

Discussion Questions:

What do you find right/wrong about Starbucks approach to food? Do you think the La Boulange acquisition is working out?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What grade do you give Starbucks menu?

Comments:

Food will get even more interesting and challenging for Starbucks when they start rolling out wine offerings for their after 4 p.m. customers in the coming months.

Most go to Starbucks for the quality of the beverage and the personalized service. What ever Starbucks offers for food items, it needs to perceived by customers as "quality," not "airline" food.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

First, full disclosure, I am an original Starbucks Gold Card holder, and I buy an average of 2.7 Starbucks lattes per day, including weekends, and I have never chosen an office building for David Biernbaum & Associates, LLC that didn't have a Starbucks somewhere within walking distance on the property. Now that we got that out of the way, here is my response:

Don't ever bet against Howard Schultz. Starbucks doesn't ever jump right into anything without a great deal of thought, analysis, and consumer input. Starbucks seems never to have a need for complete re-invention, however, what the company does so well, perhaps better than almost any other company, is to constantly amend its business model to stay not only current but well ahead of its competition, and to expand its brand into new spaces, but in a very thoughtful diligent way.

In addition, Starbucks knows it's not infallible and the company always seems to have a plan in place to make modification, adjustments, or even retreats, when necessary. Starbucks will never go too long with an idea that isn't going to work.

Starbucks will more than likely succeed in its new ventures. The brand will only become stronger than it already is. Remember, a Starbucks isn't just a coffee, or not even just a brand. It has an ethos, and to be a Starbucks consumer is a way of life. That's what Starbucks knows about you so very well. And they work hard to keep improving that experience.

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David Biernbaum, Senior Marketing and Business Development Consultant, David Biernbaum Associates LLC

The La Boulange acquisition was a good move. Most Starbucks customers who buy morning beverages also buy some form of bakery products with their coffee, etc. I do not think lunch menu items would be the right direction, but bringing back a few items as requested by their customers can only be a good move. They may want to toy with the idea of a weekly or better yet, monthly item only just as they do with flavored coffee from time to time.

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Frank Riso, Principal, Frank Riso Associates, LLC

I don't spend as much time in a Starbucks as David does, but I spend quite a bit of time - at least 1x per week, sometimes 2-3x. As a customer, I was somewhat startled by the change. It felt very abrupt. And I found that items that I like to buy - like the pumpkin scone and the maple scone - were not replaced by anything I cared much for. And I agree that the portions seem smaller and the prices seem higher. As a result, I find myself buying less when I'm there: where the scone might've tempted me, now I can sail right past the bakery portion without a second thought.

So I don't know. I too assume that Starbucks did its research, but research doesn't always predict how consumers will react - New Coke has proven that already. In the end, I think Starbucks missed the mark. I hope they bring some of the old products back, and rethink the price/value ratio of what they're providing.

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Nikki Baird, Managing Partner, RSR Research

Howard Schulz and Starbucks revolutionized a higher value for the coffee bean, but they haven't matched that zenith yet with their food offerings.

Starbucks drinkers have a perception that they are getting perfection for a lofty price in their beverage. That almost demands companionable perfection from any food accompaniment. But more familiarity might also be helpful. Perhaps an unique $5 Starbucks cruller would be a better match than La Boulange's pricey and cutesy contemporary offerings.

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Gene Hoffman, President/CEO, Corporate Strategies International

For Starbucks to stay relevant they must...stay relevant. That means changing with the times and keeping up with customer expectations. It means knowing what changes to make to keep from being old or stale. The key is the balance between old and new. Starbucks doesn't want to lose what got them this far, but they don't want to be seen as out-dated. Remember the New Coke?

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

I sit here with my venti dark. I am at SBUX 3 to 5 times a week. Fortunately, their new food offerings have saved me hundreds of calories and many dollars a week. It has gone from good to awful. Forget about the selection. My colleagues have described it well, if not kindly...airline quality. It looks unappetizing and tastes worse than it looks.

I am sure the folks at headquarters and those in the La Boulange bakeries are experiencing an entirely different product experience, but the scale of these products has been a debacle. Now they seem to be recognizing it. I hope they attend to quality as much as they are attending to the selection.

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Gene Detroyer, Professor, Independent

Starbucks management might take a little time from their busy schedule to attend a seminar designed to improve listening skills. With this new ability and some practice, the company might start creating improvements that the consumer is eager to try and perhaps even like. There are just too many market alternatives for a pontifical business plan that seemingly alienates more than it enchants the public.

'gjarnoldjr'

The new bakery program is a poor value. Up until about a year ago, most of the old bakery items were $1.95, a reasonable add on price. Then last year later in the year, those all went to $2.25. A few months ago my market got the "new" program described in the article with some old bakery items and some new ones, but the prices went up again this time to $2.46 each for most items. I think the new items are also smaller in size than the old ones?

I've tried many of the new items and they are fine quality, but not great. Freshness and texture are hurt due to these being a frozen thaw-to-sell item.

I think they have pushed it too far on price. A $3.75 tall mocha and a $2.45 plain croissant or tiny muffin makes for a very expensive breakfast stop.

In my area, many new independent coffeehouses have opened the past three years offering prices $1 or more below Starbucks, and larger pastry items from local bakeries or made in-house that are a good value. I think Starbucks has gotten too greedy.

Mike B, Storewanderer, None

I think there needs to be more value in the bakery offerings. They really do seem to be smaller and more expensive than previously. Some of the items are awesome -- but not for $3 each.

My store is adjacent to Starbucks -- we share a wall and we're working on the pass through -- so I am there a lot.

Connie Kski, owner, Animal Fair Pet Shop

It is tough for a large coffee chain like Starbucks to adjust for food since it is perishable and they have very little kitchen space. I think pastries and dessert works better than sandwiches and delicate bites for a Starbucks. I think La Boulange gives them the food production background and expertise to make items custom for Starbucks, rather than just copy items directly over.

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Kenneth Leung, Director of Enterprise Industry Marketing, Avaya

This is such a subjective area. Part of the problem is that Starbucks has such a diverse customer base. I like the La Boulange items and I have increased my food purchases at Starbucks since they were introduced, but I'm well traveled, live in Seattle and I'm a bit of a snob. I probably don't have the same palate as a customer in Des Moines or Tampa who was raised with different tastes.

One thing that Starbucks did not do well was communication and marketing around the La Boulange roll out. They did not do enough to clearly explain the concept and the quality of the items to customers. Also, I've observed that barista execution of La Boulange is inconsistent.

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Martin Mehalchin, Partner, Lenati, LLC

As a northeast road warrior, I count on Starbucks to keep me awake and alive while on the road. Their coffee is still superior to all in terms of its quality and zest. I like the variety of the new menu, especially items that are more natural and have some fruit and grains in them. There's also an occasional fit for rich chocolate selections. I do appreciate healthier choices; being loyal to the brand, I wish they would eliminate hydrogenated oils from the pastries as a matter of their mission, as well as eliminating meats/turkey bacon from the "healthier" egg white sandwiches.

My beef is with the selection at the Starbucks at rest stops; the pastry selection falls well short; I understand the different business/franchise relationship but wish there was more consistency.

Alan Cooper, Contract Trainer/Training Consultant, Independent/Freelance

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