Food industry consultant Suzee Brain says there were many reasons behind Starbucks’ struggle to cut through, including Australia’s long appreciation of quality coffee and independent cafes.
“Coffee drinking falls into three distinct buckets,” Brain says. “Premium operators – bespoke roasters with a small number of stores – state chains and national brands like McCafe.”
“Starbucks was trying to compete against the premium operators and state chains, but their product was only really aligned with the national brands. Premium and state chain customers would never swap to an American coffee beverage. This is what really slowed them down,” Brain says.
Even now, the turnaround has little to do with changing coffee habits and much more to do with its iced and flavoured drinks.
As Brain explains, “Starbucks hasn’t really done anything differently, they’ve just got lucky that we’ve had a generational change in … customers.”
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These new customers, she says, have substantially different dining and drinking habits to the rest of us, opting for a string of smaller snack-sized meals over the standard breakfast, lunch and dinner, the custom of those in older cohorts. This includes a preference for handheld foods – sushi, burritos and liquid “meals” such as smoothies, bubble tea and frappuccinos.
“It’s under the $10 price point, it’s social, it’s quick, they can hold it in one hand and their phone in the other, it ticks a lot of boxes for how they’re living their lives,” Brain says.
There’s not much we parents can do about the Gen A and Gen Z desire for a syrup-and-whipped-cream fix, but for the coffee snobs among us (myself included), we can still drop them off at Starbucks before heading to the bespoke roaster down the street for the good stuff.
Shona Hendley is a freelance writer based in Victoria.
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