Source: http://www.eatability.com.au/2014/06/18/starbucks-australia-what-does-the-future-hold/?utm_source=outbrain&utm_medium=cpc&utm_campaign=outbrain_amplify
They’ve tried and failed since 2000, but mega chain Starbucks is under new ownership in Australia and attempting to once again conquer our coffee loving shores, but do we want them to?
Sydney, like most Aussie cities, boasts a sophisticated and diverse coffee culture. In short, we freaking love our coffee. And not just any coffee. We love freshly roasted beans, unique blends and milk that has been steamed to velvety perfection.
“I think in general Australians are very advanced when it comes to coffee knowledge,” says Aileen Young, co-founder of Sydney boutique coffee roasters, Vella Nero.
“What comes with that is an education around how freshness correlates to flavour, the appeal of small-batch roasting and expert brewing, and how factors like that impact the quality of their cup.”
According to the 2014 Cafes and Coffee Shops Market Research Report conducted by IBISWorld, Aussies spend more than $4 billion at cafes and coffee shops each year and it’s the small, quirky, boutique roasters that have claimed almost the entire market share.
This was the coffee climate that Starbucks, a Seattle-based chain, walked into when it opened its first store in Sydney in 2000 – an attempt to replicate the mammoth success the brand had seen in America and other western countries.
Yet even this mega chain, with its $15 billion in revenues across 64 markets couldn’t hack it in Australia.
Aussies love flat whites, cappuccinos and espressos. Starbucks, with its corporate signage, uniformly comfortable cafes and production line processes, seem to be in direct opposition to the eccentric coffee vibe that we hold so dear.
“It takes time and training to get the milk just right,” says Sydney barista Dimitri Agaios. “The people behind the counter at Starbucks don’t always possess those skills.”
By 2008, just eight years after opening, Starbucks reported $143 million in losses and promptly closed two thirds of its 85 stores.
Did people see the sudden proliferation of Starbucks outlets all over the country as offensive to their coffee-loving sensibilities? The chain had a whole new system of ordering, new names for multi-flavoured coffee and ridiculous sizes.
Was it a case of a Fortune 500 company trying to teach the little guys to do things the American way? That would certainly explain why chains like Gloria Jeans, which opened up shop 15 years ago and grew based on a local franchise model, have navigated the cafe landscape, while overseas ones haven’t.
According to coffee commentators (mostly just bloggers), Starbucks Australia failed for two key reasons.
Firstly, the company took what worked in the US and transplanted it in Australia without any attention to what actually worked here. To be fair, Starbucks isn’t alone here, there have been plenty of international companies who use this method of entry into a new market. Not paying attention to the local Aussie market meant that weirdly named flavour combinations like ‘Grande Caramel Macchiato’ were offered up to a population raised on quality flat whites.
Secondly, Starbucks imposed themselves by opening too many stores across the country. There was no organic growth, no capturing consumers’ imaginations with ‘The Story’, and no build up of demand. Instead, Starbucks opened in areas where the cafe culture was strongest. Unfortunately, it meant that prejudice was rife.
Last month Starbucks confirmed the sale of its 24 remaining stores in Australia to The Withers Group, which owns 600 7-Eleven outlets across the country. The stores will continue to exist under the Starbucks brand (including a standard Starbucks-style menu and cafe format) with The Withers Group announcing that it plans to expand operations by opening new stores in close proximity to its existing 7-Eleven outlets.
They’ve tried and failed since 2000, but mega chain Starbucks is under new ownership in Australia and attempting to once again conquer our coffee loving shores, but do we want them to?
Sydney, like most Aussie cities, boasts a sophisticated and diverse coffee culture. In short, we freaking love our coffee. And not just any coffee. We love freshly roasted beans, unique blends and milk that has been steamed to velvety perfection.
“I think in general Australians are very advanced when it comes to coffee knowledge,” says Aileen Young, co-founder of Sydney boutique coffee roasters, Vella Nero.
“What comes with that is an education around how freshness correlates to flavour, the appeal of small-batch roasting and expert brewing, and how factors like that impact the quality of their cup.”
According to the 2014 Cafes and Coffee Shops Market Research Report conducted by IBISWorld, Aussies spend more than $4 billion at cafes and coffee shops each year and it’s the small, quirky, boutique roasters that have claimed almost the entire market share.
This was the coffee climate that Starbucks, a Seattle-based chain, walked into when it opened its first store in Sydney in 2000 – an attempt to replicate the mammoth success the brand had seen in America and other western countries.
Yet even this mega chain, with its $15 billion in revenues across 64 markets couldn’t hack it in Australia.
Aussies love flat whites, cappuccinos and espressos. Starbucks, with its corporate signage, uniformly comfortable cafes and production line processes, seem to be in direct opposition to the eccentric coffee vibe that we hold so dear.
“It takes time and training to get the milk just right,” says Sydney barista Dimitri Agaios. “The people behind the counter at Starbucks don’t always possess those skills.”
By 2008, just eight years after opening, Starbucks reported $143 million in losses and promptly closed two thirds of its 85 stores.
Did people see the sudden proliferation of Starbucks outlets all over the country as offensive to their coffee-loving sensibilities? The chain had a whole new system of ordering, new names for multi-flavoured coffee and ridiculous sizes.
Was it a case of a Fortune 500 company trying to teach the little guys to do things the American way? That would certainly explain why chains like Gloria Jeans, which opened up shop 15 years ago and grew based on a local franchise model, have navigated the cafe landscape, while overseas ones haven’t.
According to coffee commentators (mostly just bloggers), Starbucks Australia failed for two key reasons.
Firstly, the company took what worked in the US and transplanted it in Australia without any attention to what actually worked here. To be fair, Starbucks isn’t alone here, there have been plenty of international companies who use this method of entry into a new market. Not paying attention to the local Aussie market meant that weirdly named flavour combinations like ‘Grande Caramel Macchiato’ were offered up to a population raised on quality flat whites.
Secondly, Starbucks imposed themselves by opening too many stores across the country. There was no organic growth, no capturing consumers’ imaginations with ‘The Story’, and no build up of demand. Instead, Starbucks opened in areas where the cafe culture was strongest. Unfortunately, it meant that prejudice was rife.
Last month Starbucks confirmed the sale of its 24 remaining stores in Australia to The Withers Group, which owns 600 7-Eleven outlets across the country. The stores will continue to exist under the Starbucks brand (including a standard Starbucks-style menu and cafe format) with The Withers Group announcing that it plans to expand operations by opening new stores in close proximity to its existing 7-Eleven outlets.
