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?
Reader Comments (Page 1 of 2)
10-20-2008 @ 1:46PM
phatkrome said...
Is it Krispy Kreme or Dunkin Donuts? The story has both.
10-20-2008 @ 1:56PM
sarah gilbert said...
it's Dunkin Donuts, phatkrome. sorry, I must not have had enough coffee yet today! ;)
10-20-2008 @ 2:29PM
teh said...
i've tried both starbucks and dunkin donuts. starbucks wins by a mile. DD's coffee is ok but doesn't have anywhere near the deep flavor of starbucks. DD's tastes about the same as McD's coffee
10-20-2008 @ 4:32PM
Brett Schulte said...
I'd be embarrassed to go to a Dunkin Donuts. Low quality unhealthy products in a tacky setting... no thanks!
10-20-2008 @ 5:13PM
B Beaven said...
Interesting analysis of Starbucks' and Dunkin Donuts' customer comments from social media web sites by The Customer Insight Portal...
http://customerinsightblog.wordpress.com/2008/10/14/my-starbucks-idea-what-starbucks-customers-really-want/
http://customerinsightblog.wordpress.com/2008/09/12/analyzing-yelp-reactions-to-dunkin-donuts/
10-20-2008 @ 7:06PM
Kevin said...
They say that they compared the Dunkin Donuts Original blend to Starbuck's House Blend. However, that's just one of the many that Starbucks' brews-- and, importantly, is not the one many stores brew every day.
At the stores I've been at, the Pike's Place roast, which, in my book, far surpasses Dunkin Donut's, is the "default" roast, the one that they brew all day.
10-20-2008 @ 11:17PM
Daniel said...
Starbucks is great for networking and has very good coffee and lattes. Go to Dunkin Donuts drive-thru and try the coffee. It is fab!
10-21-2008 @ 10:23AM
Vito said...
I'm in the middle here. Green Tea Lattes from starbucks are great, but vanilla chai lattes from dunkin donuts are my thing... Two completely different things that is an occasional treat for me (occasional as in once every two weeks.)
10-21-2008 @ 10:40AM
Koz said...
Wait a minute, now! Who brewed that coffee in the taste test? I will add that my husband prefers DD, but I like to get a latte breve & you can't do that at DD. I also prefer the cake & cookie choices at SBs & the atmosphere of a coffee house. Still, my husband & I most prefer to frequent locally-owned coffee houses.
10-21-2008 @ 10:43AM
Fred said...
I have never understood why so many people were "taken-in" by SBucks. When so many people all rush for something, it usually means they really don't know what they're doing. But, little-by-little, they find out and reality sets-in. SBucks is so full of itself - it's a joke. The guy who heads it is a control freak who even worries about the fonts used on their stationary. The Bucks stops here.
10-21-2008 @ 11:20AM
Niurka said...
I've tried both and Dunkin Donuts coffee tastes much better. Now specialty coffees are good at Starbuck's.
10-21-2008 @ 12:20PM
Anne said...
How could Seattle participate in the Dunkin Donuts/Starbucks coffee taste test? Dunkin Donuts pulled out of Washington years ago. Was this taste test done in another state?
As for liking one or the other, it's all up to the person drinking the coffee. I have to say that Starbuck's has many blends and there are some I like better then others, but if I had to do a taste test on Dunkin vs Starbuck's I'd still pick Starbuck's. I would like to see Dunkin come back to the Seattle area though because I really do like their donuts!
10-21-2008 @ 12:42PM
denis said...
Sounds like politics as usual. Of course there are lovers of DD coffee. I was when I lived in Boston years ago. Now I will always opt for Starbucks. And like Washington state, DD pulled out of California years ago.
10-22-2008 @ 4:37PM
Brennan from Dunkin said...
Thanks for all the positive comments guys.
Anne, the test is Seattle, like other cities, was double-blind and therefore wasn't conducted in a Dunkin' or a Starbucks, but rather in a neutral location with their coffees. Glad to hear you like our donuts!
10-23-2008 @ 1:52PM
mare said...
Having worked for SBucks in the past, I have to say, that I've had my share of "good coffee", I personally like Dunkin better, and even some store brands (Wegmans brand coffee is much cheaper, and much better flavor).
I refuse to drink SBucks. Way too expensive, for a bitter, oily cup of coffee. I'll take instant 1st - and I don't drink instant either.
10-23-2008 @ 1:41PM
I Knew It said...
I knew Dunkin Donuts was better than Starbucks. I liked the taste of the coffee more. And for some reason, the last time I tried Starbucks, I almost vomited. It had to be something in the milk. Too much whey or something. Whatever it was, it made me nauseous and I had to dump my expensive Starbucks coffee.
10-24-2008 @ 12:18AM
Kevin said...
I find it hard to believe that Dunkin Donuts can make this claim when they only polled 476 people. How many coffee drinkers are there in the U.S.? According to the CIA World Factbook (July 2008), there are 303,824,640. The information on the poll claims that 57% of the 476 preferred Dunkin Donuts; that's about 217 people. So in reality, 0.00089% of the United States prefers Dunkin Donuts. Oh yeah - that is a creditable statistic to support their claim.
Personally, I think Dunkin Donuts (and their donuts) are awful. And their customer service is worse.
10-24-2008 @ 12:24AM
Kevin said...
Ummm....it's late. There are 303,824,640 people in the United States (so there are quite a few more coffee drinkers than 476) and 57% of the 476 is actually 271 people (no 217). Still all in all, really not enough solid evidence to make a claim like this.
10-24-2008 @ 10:07AM
bruce mace said...
interesting and funny article about sbux from greenfaucet which is a wealth management co.
http://www.greenfaucet.com/hanlons-pub/peter-lynch-would-still-be-shorting-starbucks/05388
10-27-2008 @ 8:47AM
alicia said...
Starbucks wins by far for the quality of their coffee, customer service and customer satisfaction. There really is no comparison. I get an iced coffee every morning and not only is it perfectly double brewed, it's actually done correctly EVERY time. The baristas are always polite, friendly and know you by name. It is a welcoming and calming environment, where Dunkin Donuts is not welcoming and far from relaxing. I used to be an avid Dunkin customer..and their iced coffee got more watered down every single time I went. The people behind the counter were kids who hated their jobs and could care less about making the order right. They weren't friendly and whenever they messed up they got upset when I asked that they fix it. When I ask for a coffee made regular..it shouldnt be white-Can I have some coffee with this cream? Geez. Ever since I made the switch...Starbucks real coffee wakes me up, tastes great every time..the in store experience is enlightening and a good start to my busy day. It's too bad that some people don't understand how much better Starbucks really is...they are closeminded to the tall, grande venti wording..keep it simple right? If you don't mind simple watered down coffee...then Dunkin Donuts is the right place for you.