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In a climate of disappearing disposable income on one hand, and a contingent of consumers that are always seeking out better and more sustainably-grown and traded coffee beans on the other hand, Starbucks (NASDAQ: SBUX) is losing in all fronts. Today, Dunkin Donuts announced that its coffee had beaten Starbucks' brew in independent taste tests across the country; 476 adults in Atlanta, Boston, Chicago, Cleveland, Dallas, Detroit, Los Angeles, Miami, New York City, and Seattle participated in a double-blind taste test, comparing Dunkin Donuts Original Blend against Starbucks House Blend. Exact numbers were not released, but the research firm said the customers "clearly indicated a preference" for the Dunkin.This isn't the only blow against Starbucks in the media this week; last week, a story about the new Juan Valdez Cafe chain highlighted the pressure from the other end of the competition spectrum: quality and sustainability. Coffee sold at the 101 stores across Colombia and in New York, Seattle, Philadelphia, Spain, and Santiago, Chile is grown by 22,000 shareholders who are looking to market their beans; according to this article, they're not hoping to profit from the cafe enterprise, even though the collective plans to open 500 more stores across the U.S., Latin America and Europe in the next two years. What's more, coffee is slightly cheaper at Juan Valdez Cafe than at Starbucks in New York City.
Starbucks is being squeezed into an uncomfortable middle ground between the low-price, blue collar product on one end (Dunkin Donuts) and the eco-friendly, high-quality product on the other end (Juan Valdez). The only thing it has going to keep its profits from splattering all over the wall is customer loyalty ... and oatmeal. Will it survive?
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Reader Comments (Page 2 of 2)
10-30-2008 @ 1:06PM
nate said...
Saying that DD has better Coffee than Starbucks is like saying Outback has a better Steak than Morton's. its just not true. Starbucks has at least 20 different kindso of coffee that come out all throughout the year and DD has ONE. how impressive!!! And also only 476 audults surveyed? One starbucks location sees more customers in one day than that number, and lastly i think DD is appealing to a completely differnt market than Starbucks.
11-02-2008 @ 9:14PM
austin p said...
I think Starbucks is fine in its niche. As far as sustainability, they are the largest buyer of fair trade coffee in the world and they just agreed to double that next year, they also partner with Conservation International.
Its such a curious thing to wonder who the tasters were. The average person isn't a coffee expert, so maybe DD will win out in the end, but they're beans are so lightly roasted and Starbucks tends to over roast, so it seems like its hard to put them side by side like its Pepsi and Coke.
11-04-2008 @ 4:43PM
Marc said...
You have to be kidding me with this. Dunkin Donuts coffee isn't coffee. It's like comparing Coke with melted rubber.
~ http://ispynyc.wordpress.com
11-09-2008 @ 11:03AM
Ivan said...
Hello!
I was buying coffee beans (Original blend, pink&brown packs) in DD store more than 1 year, ~ 1 pack a month, because it had best coffee taste.
Last 2 purchases of Original Blend (pink&brown packs) beans was terrible - coffee is tasteless and smellsless now.
If I ask to make espresso in store - it has same disgusting taste and smell.
What DD done to the coffee?
America cannot run on such coffee!
DD cannot beat Starbucks with such taste.
I do not like Starbuks much, but DD coffe now much much worse.
I thought, I found coffee for the rest of my life, but now I have to start my search for good coffee again.
Sorry. 11/9/08