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Think Outside the K-Cup, Three Business Principles I Learned While Comparing Starbucks Via with Starbucks K-Cups

I discovered Starbucks in 1994 when a group of Disney executives held a meeting at the Whistler Blackcomb ski resort in western Canada. One morning our Canadian hosts took us to a charming coffee shop in the village and one guy ordered this thing called a “latte.” I had no idea what that was, I assumed it was a special local favorite. I ordered coffee, black, large.

Whoa, one sip and my boring Maxwell House life was forever changed, I was hooked on this new coffee. At that time there were few Starbucks stores east of the Rocky Mountains, so for years I got my Starbucks through their direct mail program. How thrilled I was in 1997 when Starbucks opened their first store in Nashville. I’m happy to report there are now three Starbucks within three miles of my house.

I was skeptical when Starbucks introduced the Via brand in 2009. Starbucks as an instant? Heck, that was something Maxwell House would do. But, as a loyal devotee, I tried the product during an in-store demo and dad gum, for instant it was pretty good. I was given a few sample packs, which I brought home and tossed into my coffee drawer.

All my coffee habits got scrambled last Christmas when my family gave me a Keurig coffee maker. Though I was initially frustrated that Starbucks didn’t sell K-Cups for the Keurig, I found some good alternatives, Paul Newman’s Special Blend Extra Bold being the best. But Starbucks announced their entrance to the K-Cup revolution earlier this year so now I can have my beloved Starbucks in a K-Cup.

But I have discovered that the K-Cup is not the best way to enjoy Starbucks with the Keurig. One night last week I wanted some coffee but was disappointed to realize I was out of K-Cups but I did have one of those remaining Via instant packages. So I improvised by running water through my Keurig into a cup where I had emptied the Via package, and to my surprise, it was MUCH better than the Starbucks K-cup! The water from the Keurig comes out at the perfect temperature and it keeps its heat much better than microwaved water, the normal way I prepare instant.

But wait, there’s more good news! A Starbucks Via package costs about $.20 less than a Starbucks K-Cup. So, while I will always prefer the brewed-bean version of Starbucks, I now have a perfectly good alternative with a Via package poured into Keurig-heated water.

I find three business principles from my caffeine-inspired story:

#1 Innovation usually happens by accident, so embrace life’s surprises. I doubt I would have ever tried the Via in K-Cups option has I not been out of Starbucks K-Cups, but the urge for coffee caused me to think out side the box, or shall I say, outside the K-Cup.

#2 Brands have to innovate and grow while they maintain the quality that defines them. My brewed Starbucks today tasted as great as did the first cup I had in 1994. But, while the product has stayed the same, the brilliant leadership at Starbucks has changed (for the better) everything else … expansion of retail, then instant, then K-Cups. The only uncertainty for Starbucks is “what’s next?” Contrast that with Maxwell House, not even the shade of blue on the coffee can has changed since Eisenhower was President.

#3 Every Goliath should be afraid of a David. Keurig is the product of a reasonably small yet fast-growing company based in sleepy Vermont. But Green Mountain Coffee Roasters has turned the coffee business upside down, and now all the coffee giants like Starbucks, Dunkin Donuts, P&G and the rest are rushing to get their products into K-Cup distribution. If you have a great product like the Keurig, you can make things happen, and make the Goliaths very uncomfortable.

Jim Cumbee JD, MBA is Managing Director of Tennessee Valley Group, Inc.
jim@tnvalleygroup.com (615) 390-9966

I discovered Starbucks in 1994 when a group of Disney executives held a meeting at the Whistler Blackcomb ski resort in western Canada. One morning our Canadian hosts took us to a charming coffee shop in the village and one guy ordered this thing called a “latte.” I had no idea what that was, I assumed it was a special local favorite. I ordered coffee, black, large.

Whoa, one sip and my boring Maxwell House life was forever changed, I was hooked on this new coffee. At that time there were few Starbucks stores east of the Rocky Mountains, so for years I got my Starbucks through their direct mail program. How thrilled I was in 1997 when Starbucks opened their first store in Nashville. I’m happy to report there are now three Starbucks within three miles of my house.

I was skeptical when Starbucks introduced the Via brand in 2009. Starbucks as an instant? Heck, that was something Maxwell House would do. But, as a loyal devotee, I tried the product during an in-store demo and dad gum, for instant it was pretty good. I was given a few sample packs, which I brought home and tossed into my coffee drawer.

All my coffee habits got scrambled last Christmas when my family gave me a Keurig coffee maker. Though I was initially frustrated that Starbucks didn’t sell K-Cups for the Keurig, I found some good alternatives, Paul Newman’s Special Blend Extra Bold being the best. But Starbucks announced their entrance to the K-Cup revolution earlier this year so now I can have my beloved Starbucks in a K-Cup.

But I have discovered that the K-Cup is not the best way to enjoy Starbucks with the Keurig. One night last week I wanted some coffee but was disappointed to realize I was out of K-Cups but I did have one of those remaining Via instant packages. So I improvised by running water through my Keurig into a cup where I had emptied the Via package, and to my surprise, it was MUCH better than the Starbucks K-cup! The water from the Keurig comes out at the perfect temperature and it keeps its heat much better than microwaved water, the normal way I prepare instant.

But wait, there’s more good news! A Starbucks Via package costs about $.20 less than a Starbucks K-Cup. So, while I will always prefer the brewed-bean version of Starbucks, I now have a perfectly good alternative with a Via package poured into Keurig-heated water.

I find three business principles from my caffeine-inspired story:

#1 Innovation usually happens by accident, so embrace life’s surprises. I doubt I would have ever tried the Via in K-Cups option has I not been out of Starbucks K-Cups, but the urge for coffee caused me to think out side the box, or shall I say, outside the K-Cup.

#2 Brands have to innovate and grow while they maintain the quality that defines them. My brewed Starbucks today tasted as great as did the first cup I had in 1994. But, while the product has stayed the same, the brilliant leadership at Starbucks has changed (for the better) everything else … expansion of retail, then instant, then K-Cups. The only uncertainty for Starbucks is “what’s next?” Contrast that with Maxwell House, not even the shade of blue on the coffee can has changed since Eisenhower was President.

#3 Every Goliath should be afraid of a David. Keurig is the product of a reasonably small yet fast-growing company based in sleepy Vermont. But Green Mountain Coffee Roasters has turned the coffee business upside down, and now all the coffee giants like Starbucks, Dunkin Donuts, P&G and the rest are rushing to get their products into K-Cup distribution. If you have a great product like the Keurig, you can make things happen, and make the Goliaths very uncomfortable.

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Tennessee Valley Group

Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."

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