Will former exec’s Godiva café plans spell trouble for Starbucks?

Discussion
The first permanent Godiva Café location on NYC's Lexington Ave. - Photo: Godiva
Apr 18, 2019
George Anderson

Annie Young-Scrivner knows Starbucks. The former executive at the coffee giant held a variety of senior posts at the company, including executive vice president of global digital & loyalty development, president of Starbucks Canada, president of Teavana Holdings and global chief marketing officer during her tenure between 2009 and 2017.

It stands to reason that Ms. Young-Scrivner, who became CEO of Godiva Chocolatier in 2017, will use the knowledge she gained at Starbucks as her current company embarks on a major expansion of its café concept. The very first Godiva Cafés in the U.S. are now open — a permanent location on Lexington Avenue and a pop-up shop inside Pennsylvania Station in Manhattan. The company’s expansion plans call for opening around 2,000 new cafés over the next six years with one-third of those located in the U.S., reports The Associated Press.

Unlike its traditional stores, which sell boxed confections, chocolate-covered strawberries and ice cream, Godiva’s cafés include coffee, tea and prepared foods such as the croiffle, a mashup of a croissant and waffle stuffed with cheese, chocolate, egg or gouda.

Thierry Muret, Godiva’s executive chef chocolatier, said the croiffle is not the typical Belgium waffle served in the U.S.

Will former exec’s Godiva café plans spell trouble for Starbucks?
Photo: Godiva

“You need to taste it to see what makes it different,” he told AM New York. “I didn’t go the easy way. In the Liege waffle, you have real sugar inside. It’s a pearl of sugar … When you bake it the sugar melts and creates a coat of caramel in your waffle.”

The food at Godiva’s cafés, which also includes a menu of soup and salads, was created with Millennials and Gen Z in mind.

“We wanted to really customize the food for fast pace, fast life, no time, busy, busy, busy,” Mr. Muret said. “The brand is so young — even after 90 years — because we are listening to how people are living.”

Godiva, which is privately owned by Turkish Yildiz Holding AS, was valued at $1 billion in 2017, AP reports. The company is looking to generate roughly 40 percent of its total sales from cafés over the next five years.

DISCUSSION QUESTIONS: Do Godiva Cafés have the potential to disrupt the foodservice market in areas where they are located in the U.S.? How critical will Annie Young-Scrivner’s experience at Starbucks be to Godiva’s expansion plans?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Godiva will certainly steal share from Starbucks. And both will thrive. But Starbucks finally has serious competition."
"...there does exist a wide growth market for coffee, and coffee shops, and there is plenty of room for Godiva without hurting Starbucks."
"Disrupt? Nah. Nice draw for dying retail centers? Could be. As Starbucks has proven over and over again, consumers’ appetite for coffee seems to be bottomless..."

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18 Comments on "Will former exec’s Godiva café plans spell trouble for Starbucks?"


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Neil Saunders
BrainTrust

Expansion of this order is going to be tough, especially in a market that is already pretty saturated. Certainly there is scope to beat Starbucks on food and snacking options – an area where it has always been weak. But taking significant share away from it in core beverage categories will be hard.

Although Godiva is setting its sights on the younger generations, many of these consumers don’t use Starbucks. They use niche, independent coffee shops which offer an authentic ambience and really high quality food and beverages. It’s hard for big corporates to compete with these niche brands.

Can Godiva grow? Sure. Will it achieve its ambitions of opening thousands of stores. Unlikely, in my view.

Lee Kent
BrainTrust

I’m very late to this party, however, I think Godiva has a much better chance if they aim upscale with luscious offerings of Godiva chocolate and maybe unique drink pairings. A fun place to go for a little something special but within reason. Going head-on with Starbucks and all the others in this space seems like a non-starter to me. For my 2 cents.

Phil Masiello
BrainTrust

I understand the expansion of other food items, especially those with some chocolate component. That has some merit and I am sure, with the correct real estate strategy, these stores can do quite well. But if the question is can they give Starbucks a run for the money the answer is no. Starbucks is coffee first and they do that very well. That is their core competency. Food is an add on sale to meet some meal part demands. Godiva is chocolate first and they should always keep that focus. Coffee will be a nice add on, but I do not think they are going to make a Starbucks customer make a turn to a Godiva store.

Annie Young-Scrivner has the understanding of a good real estate and operating strategy for this type of store concept and that will be critical to driving expansion. But she needs to make sure the company does not deviate too far from its core.

Bob Amster
BrainTrust

With enough variety in their offering, Godiva will immediately appeal to chocolate lovers, Godiva followers, and people searching for coffee that actually tastes good.

Art Suriano
BrainTrust

I like the concept, and I believe that Godiva cafés could have a real shot in becoming a recognized brand. Starbucks and Dunkin’ Donuts have been running their business the same way for so long. It’s no wonder they have both lost their edge. So something innovative like Godiva cafés has a chance of being highly successful. Add to that the experience that Annie Young-Scrivner brings to the table and Godiva cafés have an even better opportunity for success. There’s no doubt Ms. Young-Scrivner will know what strategies to avoid, what attempts that were unsuccessful at Starbucks and why, and most likely brings with her tons of data and information acquired from Starbucks that she can now put to use. Assuming the first few Godiva cafés are successful and I think they will be, I can see this in a few years turning into a popular and successful business.

Jeff Sward
BrainTrust

Emotions drive retail. Chocolate drives emotions…seriously. Drop a Godiva next to a Starbucks and buckle in. No doubt Starbucks has zealous supporters. So does Godiva. Godiva will certainly steal share from Starbucks. And both will thrive. But Starbucks finally has serious competition.

Bob Amster
BrainTrust

I agree. Consumer emotions and human response to stimuli is not be underestimated in retail. There is the dispassionate use of technology to get something done quickly, and then, there is the smell and taste of chocolate…

Adrian Weidmann
BrainTrust

There is no doubt that Ms. Young-Scrivner’s experience and insight into Starbucks will influence her strategy and efforts for Godiva’s cafes. It will be in Godiva’s best interest not to replicate Starbucks but to understand where there are opportunity gaps where Godiva can carve out their own niche in the marketplace. Presumably, Ms. Young-Scrivner’s budget doesn’t come close to Starbucks’ so she must be that much more innovative and measured in her strategies and activations.

Lee Peterson
BrainTrust

Disrupt? Nah. Nice draw for dying retail centers? Could be. As Starbucks has proven over and over again, consumers’ appetite for coffee seems to be bottomless (witness the four or five stores within two blocks in NYC), so, the more options the merrier.

Case in point: even the presence of new/old Third Wave coffee shops hasn’t stopped the Starbucks onslaught one iota. Blue Bottle, Fox in the Snow, Intelligentsia and many more, all thriving while Starbucks does the same virtually right next door.

Let’s face it, humans (especially Americans) are caffeine addicts! It’s how we compete!

Ken Lonyai
BrainTrust

Much Ado About Nothing. Godiva likely will see success with this and be yet another player with a slice of a very crowded vertical. How thin or meaty a slice is to be seen. Some people will like it, some will balk at prices and any substantive competitor will keep on keepin’ on doing what they’re doing. To get a large national footprint would take a massive investment so Ms. Young-Scrivner’s experience at Starbucks will only stretch so far. I think it will be a very thin slice.

Rob Gallo
BrainTrust

Can Godiva take share away from Starbucks in the areas where they overlap? Sure. But will Godiva put a meaningful dent in Starbucks’ business? No.
300-350 stores per year seems like a reach for a company that only has 800 now, the bulk of which aren’t the cafe concept. I’d like to see a more rigorous pilot before the aggressive rollout.

Shep Hyken
BrainTrust

While this is a competitor to Starbucks, as is anyplace that sells a cup of coffee, I don’t see Godiva cafes competing head to head and going after the Starbucks customer base. First, Godiva’s goal is to have 2,000 stores – with only a third of those in the U.S. Starbucks has just around 29,000 stores worldwide with just over half of them in the U.S. Second, the concept with food, chocolate, specialty foods/sandwiches and coffee drinks is different enough to attract a customer for different reasons. Will Godiva cafes take some customers? Probably. Starbucks would be foolish not to pay attention to them. However, this isn’t a competitor that will disrupt the foothold Starbucks enjoys in the marketplace.

Mel Kleiman
BrainTrust

Another nitch player in a very crowded field dominated on one end by Starbucks and the other by DD.

Yes it looks like they have a great business model and something a little different to offer, but not enough to really change the landscape. Nice business but I will stick with my Starbucks stock.

Rich Kizer
BrainTrust

I think Godiva will have a challenge in pulling share away from Starbucks. Starbucks’ name is synonymous with coffee in the minds of consumers. In order to grow sales against them, as it is with any competitor, there must be a repositioning strategy to sway customers away. Godiva will sell coffee, and that spells challenge to all coffee sellers, but it won’t be a walk in the park. Godiva’s food offerings may very well help elevate their desired travel to top of mind, but it’s going to be strategy-savvy work.

David Biernbaum
BrainTrust

Annie Young-Scrivener’s resume and direct-competitor experience is an obvious advantage for Godiva. However, to presume that Godiva’s 200 stores, or perhaps eventually as many as 500 stores, or 1,000 stores, will hurt the Starbucks brand, is erroneous on so many levels. For one, Starbucks already has competitors, nationally, globally, and in every local market. Many competitors have come and gone but, in any case, Starbucks continues to prevail as an enduring brand that continues to grow year after year.

This is not to suggest that Godiva will not succeed on its own. Godiva is a great brand associated with outstanding quality. However, there does exist a wide growth market for coffee, and coffee shops, and there is plenty of room for Godiva without hurting Starbucks.

Richard J. George, Ph.D.
BrainTrust

One of my books was titled, Success Leave Clues. Annie Young-Scrivner learned up close and personal from the many successful clues left by Starbucks. Her challenge will be to take the best from Starbucks and adapt the learnings to develop a strategy based on a positive point of differentiation for Godiva. In the words that Steve Jobs attributed to Picasso, “good artists copy, great artist steal.” Godiva needs to steal, adapt and adopt.

Ken Morris
BrainTrust

Starbucks has an extremely loyal fan base. They are passionate about Starbucks coffee and it is difficult to break their daily habits for a Starbuck’s fix. Stealing market share from Starbucks will be a challenge for Godiva. Starbucks needs a worthy competitor and it will be interesting to see if Godiva and make a dent in Starbucks’ market share.

Like Starbucks, Godiva has brand loyalists for their chocolates and leveraging their chocolates as a draw for the new Godiva Cafés will be their best bet. “Come in for the chocolates and enjoy it with a premium cup of specialty coffee.”

It will be interesting to see if they convert the 139 Godiva stores in U.S. airports to the new Godiva Café concept. Their plan of 2,000 locations is very ambitious … will we be over caffeinated with over 25,000 US based coffee shops between Starbucks and Dunkin’ alone? Is there room for 2,000 more?

Paco Underhill
BrainTrust

Godiva is now a Turkish owned company. The Godiva Cafe has been a stable in Middle Eastern high streets and shopping malls for some ten years. The cultural innovation is the crossing of stimulants — coffee, tea, and chocolate in a social setting. It is comfortable place for women to meet. The quality of the “supporting cast” of baked goods and “petite sandwiches” is high. Think of Godiva — the princess riding her horse, not Starbucks the mate on a whaling ship. The world of legal stimulants is recognizing the importance of the female customer….

wpDiscuz
Braintrust
"Godiva will certainly steal share from Starbucks. And both will thrive. But Starbucks finally has serious competition."
"...there does exist a wide growth market for coffee, and coffee shops, and there is plenty of room for Godiva without hurting Starbucks."
"Disrupt? Nah. Nice draw for dying retail centers? Could be. As Starbucks has proven over and over again, consumers’ appetite for coffee seems to be bottomless..."

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