What’s the Deal with McCafe?

2009-03-07 (Saturday) by Gregory Tucker.

Business rags consistently report on the market share Starbucks is ceding to McDonald’s McCafe. I have a love-and-hate relationship with Starbucks, which a year ago I started calling McStarbucks in honor of its sterile, flavorless coffee drinking experience. Once consumers started preferring the McCafe experience over Starbucks, they should have known they were in trouble.

But I believe returning CEO, Howard Schultz, is devoted to fixing the Starbucks brand. I am not a big fan of their Tea Time focus, which I believe is failing, but other moves to improve the quality and flavor of their coffee are welcome. Their attention to timing of delivery has provided me a few free cups of decaf–just make sure to ask if the pot is fresh.

Despite the firm’s shortcomings, I am still a loyal customer. My preferred coffee drinking experience is Stumptown Roasters, a Portland-based company with a location near the kids’ school. But Stumptown is often inconvenient from home or at the Portland airport. In both locations I have a choice of Starbucks and Seattle’s Worst. That choice is easy.

Nevertheless,  on two occasions I decided to try McCafe. The first was on a hiking trip. The coffee was just so-so, not very good tasting, and $0.20 more than the same size cup from Starbucks. The second time I was waiting while Aya attended a classmate’s birthday party. The decaf I received was lukewarm, almost cold, and another disappointment.

So I ask, how is McCafe competing with Starbucks? It is not on price. It is certainly not on quality. It is not on product consistency, which is what I always associated with McDonalds. My advice to Schultz is to avoid overrating the competitive threat of McDonalds. Spend instead more time at Stumptown, where the coffee is real and the experience is palpable, if low-budget. McCafe cannot compete with a revitalized Starbucks brand. And while Schultz is working on revitalizing the brand, take a second look at Organic–why Starbucks doesn’t yet own the Organic market I have no idea.

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