Majority of coffee fans say their local coffee shops make better coffee than starbucks. If that's so, why doesn't starbucks, with all it's money and resources become better than local coffee shops. What is it missing?
Ask HN: Why doesn't Starbucks beat local coffee shops?
1–10 of 51 posts
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#2The greatest strength of Starbucks is also its greatest weakness: scale. Because Starbucks is everywhere, it has to be the same everywhere. Maybe the best coffee in West Hollywood is not the same as the best coffee in Midtown Manhattan, but Starbucks buys in bulk to optimize for what is best across all locations. The local coffee shop can optimize for what is best on a hyperlocal level, while Starbucks cannot.
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#3[deleted]
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#4It’s not only about the coffee. How would they find good quality pastries and bread for 15000 stores? How would they create a unique and cozy atmosphere?
Food doesn’t scale like that. It’s the same with restaurants.
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#5Starbucks excels where the local coffee shops are really bad or are non existent. In these cases a Starbucks can be like an oasis.
These are my experiences from around the world.
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#6Probably because for whatever reason it is not costing them revenue to not have the best coffee. I imagine because there are other benefit so starbucks, such as I am guessing familiarity, brand, has a nice "living room" feel about it, etc. If they made their coffee better, would they do better?
I think in Australia they have upped their game on the coffee front to survive (many Starbucks closed here years ago), but at the same time it is probably easier to hire baristas due to the coffee culture. They are not the best but I think a Starbucks in Australia would be a lot better than a UK one for example in terms of the coffee quality.
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#7They are fundamentally different philosophies to coffee.
Starbucks, as a large business, needs to worry about creating a consistent product which appeals to a wide range of consumers which have an expectation of what their coffee will taste like from week to week.
Smaller shops often cater to subcultures looking for ‘interesting’ coffee, so they often source characterful single-origin coffees and don’t worry about their week-to-week consistency so much, since their customer base will often accept this inconsistency in exchange for the extra character they’ll get.
I’d thus also argue that Starbucks coffee isn’t necessarily worse (even though I count among the independent-coffee shop fans), but that it is a different drink altogether.
Coffee is not unique in this kind of specialty fragmentation. It exists in craft beer, single malt whiskies etc.
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#8This seems to be an incomplete logical deduction.
Premise: A) many people prefer other coffee B) Starbucks has the resources to make high quality coffee
Assumption: Starbucks values high quality coffee as it's own end or needs to have good coffee too compete in the marketplace
Reality : Starbucks does not care about coffee quality as it's own end, only about profits, and they judge their current quality level to be the correct tradeoff for maximizing profits.
When you think an entity that is extremely successful at something is failing to understand their core competency, it is usually you who is failing to understand their goals or incentives. People fall into this trap with their understanding of the motivations of politicians as well as businesses all the time.
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#9They are fundamentally different philosophies to coffee. Starbucks, as a large business, needs to worry about creating a consistent product which appeals to a wide range of consumers which have an expectation of what their coffee will taste like from week to week. Smaller shops often cater to subcultures looking for ‘interesting’ coffee, so they often source characterful single-origin coffees and don’t worry about th…
> their customer base will often accept this inconsistency in exchange for the extra character they’ll get.
I'd argue the inconsistency is Part of the character
Re: Ask HN: Why doesn't Starbucks beat local coffee shops?
#10> If that's so, why doesn't starbucks, with all it's money and resources become better than local coffee shops
A local coffee shop optimises along a very parameters (let's say taste only) at the expense of scale, cost and other parameters. A Starbucks has to optimise quite a few other parameters but each of these parameters won't be at the levels that local coffee shops do. Remember, another thing a listed company like SBUX has to optimise is shareholder wealth so that constraint drives the rest of the optimisations.
On a related note, refer this[0] article by Joel on quality and scale. Here's a sampler:
"That’s because McDonald’s real secret sauce is its huge operations manual, describing in stunning detail the exact procedure that every franchisee must follow in creating a Big Mac. If a Big Mac hamburger is fried for 37 seconds in Anchorage, Alaska, it will be fried for 37 seconds in Singapore – not 36, not 38. To make a Big Mac you just follow the damn rules."
[0] https://www.joelonsoftware.com/2001/01/18/big-macs-vs-the-na...