Starbucks embarks on adventures in Italy

seattle-starbucks-and-needleIn 2016 Starbucks, one of the world’s largest coffee shop chains, announced that it was going to enter, Italy, its ‘most intimidating market yet’ (Chandler, 2017), over 30 years after its CEO Howard Schultz travelled to Italy and was inspired by the coffee culture and observed how: “the Italians had created the theatre, romance, art and magic of experiencing espresso” (Starbucks, 2016b).

Initially with plans to open stores in 2017, recent announcements suggest that the first store will not appear until 2018. It has been announced at the Starbucks Investor day in late 2016 that the company would open one its largest retail spaces in Milan in 2018 (Kim, 2017)[1]. This is likely to be one of its Reserve brand roaster coffee shops, the first of which opened in Seattle in 2015, and indications the company intends to open 20-30 more in cities across the world (Brown, 2017). It has been suggested that the first two stores will be in Milan and Rome with the potential for hundreds more by 2023 (both traditional stores and Reserve stores) depending on market response (Kim, 2017). The company has partnered with local brand, retail and estate developer Percassi in order to enter the Italian market with the necessary market knowledge:

“Now we’re going to try, with great humility and respect, to share what we’ve been doing and what we’ve learned through our first retail presence in Italy. Our first store will be designed with painstaking detail and great respect for the Italian people and coffee culture. And, my hope is that we will create a sense of pride for our partners – so much so that every partner who sees our store or walks through the doors will say: ‘We got it right.’” (Starbucks, 2016a).

romeThe BBC (2017) asked, can Starbucks succeed? It suggested that by targeting tourists and young Italians, quite possibly it could. Coffee is a central part of Italian culture, but many coffee shops operate as places where people can quickly get an espresso compared to a place where you would stop for a while.  It seems there are already some ‘American style’ coffee shops appearing in Italy which are popular with the younger generations. This may be because they have tried these types of coffee shops in other countries, or because they value having a space to sit and meet with other people. As highlighted by Chandler (2017): “studies confirm that the coffeehouse is the “restaurant of choice” for young people. It provides them with a nondescript, malleable space in which their burgeoning selves, friendships, and lives can unfold in comparative freedom, safe from the need to sit up straight, respect their elders, or pay quickly and leave”.

However, some people think that the corporate coffee shop will not provide what many Italians need in a coffee shop, other than fast coffee, a familiar face, as a barista from Italy explains: “Well, it would be hard, because Starbucks is a factory, it is not home. So Italian coffee drinkers like to go inside the coffee shop and hear the barista call their name. Starbucks has a continuous turnover of people so it will be impossible. Behind the counter today you find five guys, tomorrow five different guys” (BBC,2017).

It is expected that the drinks are likely to be significantly cheaper than those of Starbucks branches elsewhere, mainly because there are regulations that cap coffee prices to €1 (85p) for an espresso or €1.40 (£1.20) for a cappuccino (Kim, 2017). It is also expected there will be an espresso bar available so for those who do just want their espresso on the go, Italian style, it is still available (Yardley, 2016).

A quick scan of the starbucks-sample#StarbucksItalia hashtag on twitter shows there are a range of views about the arrival of Starbucks in Italy with some people being incensed, and asking why one earth they would want to do this, with others welcoming the brand (in particular if they can get free wi-fi – interestingly not about the coffee).

And as Simon Chandler has highlighted in Wired that if Starbucks has the potential to do well in Italy, but not because of its coffee: ‘a big chunk of Starbucks success resides with the ambiance and environment it provides’ and that ‘coffee is incidental to the paying for the privilege of going somewhere in public where we’re able to relax and be who we think we are’ (Chandler, 2017).

The company recognises that they are going to face different challenges in expanding the Italian market as the President of Percassi explained: “We know that we are going to face a unique challenge with the opening of the first Starbucks store in Italy, the country of coffee, and we are confident that Italian people are ready to live the Starbucks experience, as already occurs in many other markets” Starbucks, 2016b).

Starbucks is a brand that tends to divide people, some people love it, some people hate it, some people accept its existence and use it when they have to, and some people in the coffee industry recognise that Starbucks kick-started an interest in coffee and coffee shops. I know of several people who when abroad will look for a Starbucks because it’s a familiar ordering format wherever you go, but wouldn’t usually visit one back home. It’s likely as many of the commentators have highlighted that they will capture the custom of many tourists. Young people too in Starbucks across the globe have been known to frequent these standardized ‘third spaces’, and so here too Starbucks is likely to be able to make inroads into capturing the attention of the Italian consumer. I’ve seen similar things happen in Portugal where Starbucks and Costa have a few stores – another country where coffee culture is quite different from the ‘Starbuckified’ version. As Perfect Daily Grind (2017) have suggested it could also lead more Italians to be more adventurous with their coffee choices, and turn to more specialty coffee shops which are appearing in Italy too. If Starbucks can capture the custom of a wider Italian consumer market, only time will tell.

References

[1] The Reserve stores is expected to be 25,000 square feet which compares to the 200 sq ft for an average Starbucks store (Barry, 2017)

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This entry was posted in Cafe Culture, Cafe types, Coffee, coffee culture, General, Global Chains, Italy, Rome, Starbucks and tagged , , , , , , , , , , , , . Bookmark the permalink.

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