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> SBUX is already a luxury brand Not for an SF, LA and NY market (+ other worldwide destinations). In the same way that BMW is a luxury brand, except to those

by dotBen 14y ago

> SBUX is already a luxury brand Not for an SF, LA and NY market (+ other worldwide destinations). In the same way that BMW is a luxury brand, except to those who want to buy Ferrari and Bently. These people have even more money to spend and are not receptive to Starbucks. > SBUX can't scale Blue Bottle across their distribution channel, which is enormous. Wouldn't be all stores, would be separate stores for select markets. They could definitely scale - Blue Bottle just raised $22m in funding - what do you think they intend to do with it if not scale in some way? > So anything they did to introduce the Blue Bottle brand would dilute their own brand. Well in addition to above, I wouldn't put it past a company like Starbucks to perform an acquisiton which horribly dilutes said brand. Such as La Boulange, speaking of which... > Finally, Blue Bottle has minimal brand penetration across the US. You know about them if you live in Williamsburg in NYC, but lots of people in our Manhattan office had never been to Blue Bottle last time I was in town. They're obviously nowhere in Chicago. Are they even in Los Angeles? They're not in Seattle, or Austin, or Atlanta, or Mpls. Neither is La Boulange, really. Very small footprint outside of California. Yet Starbucks purchased them for $100m this year, mainly to use the brand to brand their baked goods. > (Interestingly, Intelligentsia in Chicago has higher revenues and That's not what Starbucks are looking to acquire in the same way they're going to shut down La Boulange (in the way we currently know it)

gtd 14y ago
> In the same way that BMW is a luxury brand, except to those who want to buy Ferrari and Bently. These people have even more money to spend and are not receptive to Starbucks. Starbucks / Blue Bottle makes even more sense considering that BMW is already a driver's car. The driving experience is at best marginally better by going to Ferrari. Whereas Starbucks is anything but a coffee drinker's coffee. People go there more for a caffeinated treat vs being into coffee per se. If Starbucks started producing the lighter roasts and more subtle flavors that coffee drinkers value, it wouldn't work with the heavy cream and sugar. So the whole Blue Bottle philosophy dovetails nicely. That said, they'd need to keep the association under wraps to avoid frightening away the coffee snobs.
tptacek 14y ago
SBUX actually costs more than Blue Bottle in NY. And, sorry to say, most wealthy consumers in New York and LA and, for that matter, Blue Bottle's home turf in SF are plenty receptive to SBUX. La Boulange is a bakery, not a coffee chain, just like Clover is a product, not a retail chain. The issue isn't that Blue Bottle can't scale at all, it's that SBUX would need them to be operating at an untenable scale almost immediately. $20MM? SBUX blows through almost $2bn per quarter.

by dotBen 14y ago

gtd 14y ago

> In the same way that BMW is a luxury brand, except to those who want to buy Ferrari and Bently. These people have even more money to spend and are not receptive to Starbucks. Starbucks / Blue Bottle makes even more sense considering that BMW is already a driver's car. The driving experience is at best marginally better by going to Ferrari. Whereas Starbucks is anything but a coffee drinker's coffee. People go there more for a caffeinated treat vs being into coffee per se. If Starbucks started producing the lighter roasts and more subtle flavors that coffee drinkers value, it wouldn't work with the heavy cream and sugar. So the whole Blue Bottle philosophy dovetails nicely. That said, they'd need to keep the association under wraps to avoid frightening away the coffee snobs.

tptacek 14y ago

SBUX actually costs more than Blue Bottle in NY. And, sorry to say, most wealthy consumers in New York and LA and, for that matter, Blue Bottle's home turf in SF are plenty receptive to SBUX. La Boulange is a bakery, not a coffee chain, just like Clover is a product, not a retail chain. The issue isn't that Blue Bottle can't scale at all, it's that SBUX would need them to be operating at an untenable scale almost immediately. $20MM? SBUX blows through almost $2bn per quarter.