• Why Starbucks just can't crack the Australian market
Australians take coffee really seriously. Which could be why Starbucks has struggled to crack the Australian market. The Feed's Patrick Abboud looks at why Starbucks has had trouble downunder.
Airdate: 
Monday, June 2, 2014 - 19:30
Channel: 
SBS Two

 

Whatever your style - long black, latte, espresso or flat white - Australians love a good brew.

And let's face it, everyone's day starts better with a solid shot.

In most cities around the world you'd be hard pressed not to find a Starbucks on every corner - but on our turf they just haven't delivered.

Starbucks have reportedly accumulated losses of at least $143 million since they opened here 14 years ago.

Having just sold their remaining outlets here to the massive multinational that runs 7-Eleven Starbucks will get one last shot at trying to become the most successful coffee chain in Australia.

Paul Patterson is a marketing guru that's spent years studying the demise of Starbucks. He says it's going to be very difficult for Starbucks to rebuild from here.

"I think they're going to struggle to rebuild the brand and get people to fall in love with it," says Mr Patterson.


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The coffee giant still has stores in 63 countries leaving very few nations Frappuccino free. There are even more than 11,500 stores across the US alone.

And they're rapidly growing in Canada (1396 stores) and China (1219 stores).

But struggling to survive in Australia - Starbucks have closed around 60 shops leaving its current stable of just 22.

"I think we've got a lot to thank Starbucks for," says Mr Patterson. "They grew the category. They basically invented the lifestyle cafes that we know today.

"But then the competition saw this was a successful formula and copied them... so they really struggled against the... competition."

And if you ask any caffeine loving Australian they'll tell you that we make some of the best coffee in the world.

There's at least 6500 independent cafes across Australia generating about $4 billion annually mainly from coffee sales.

And on average Australians drink around 3- 4 cups a day.

Will Young is the Managing Director of Campos Coffee, one of the most successful roasters in Australia.

Mr Young says Australians just won't settle for your average blend.

"Many people see Australians as coffee snobs and really we are," says Mr Young. "We're spoiled rotten here for the great coffee all the time."

"The specialty coffee industry in Australia has raised the bar so high... that Starbucks coming in sets a low level... where perhaps the baristas aren't so professional and are not as dedicated to their craft."

"It's going to be tough for them."

The companies big guns are not in the country to speak to us but they made this statement regarding their new partnership.

"We chose to partner with The Withers Group because we share similar values and culture.  The deal leverages the strength of the Starbucks brand with the experience of a local owner who has a history of successfully investing and growing global brands in the Australian market" - Jeff Hansberry, President, Starbucks China & Asia Pacific

Even though Australians don't seem to want a bar of Starbucks they're on a mission to crack the market here and they'll probably throw everything they've got at it until they do.

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