Why hasn't a 3rd Wave given Starbucks a run for its money?

[smithms176]

Hi everyone! Coffee Forum newbie here! I'm just curious to get people's opinions as to why we haven't seen the meteoric rise of a third wave style coffee shop? On a related note, I'm curious about the staying power of starbucks in the face of competition from clearly superior coffee available at third wave stores? I dont know anyone who actually likes starbucks. I think of Starbucks the way I think of a red delicious apple. You know, the apple we all grew up eating, it was immaculate looking, perfectly symmetrical, a glorious shade of red, slickly-marketed, but tasted disgusting? We all thought we liked it because who doesn't like apples right? But then one day you took a bite of a fiji, gala, or a honeycrisp apple and wondered how you had been duped all that time. I feel like Starbucks is in that position. The masses think they like it but its only because they mostly haven't tried the better stuff. When people wake up to it, Starbucks will go the way of the red delicious apple.

 

[John P]

Quality, in any form, is not about popularity. It's not about mass consumption or mass appeal. Why are more Ford sold than BMW? Why more Benihana than Nobu?

Actual "Third Wave" coffee shops will never have mass appeal, but I think that the trend towards better coffees and the public understanding there is a vast difference between the Starbuckian type places and those that take more of a craft approach.
Many places will crop up that speak the language, have beautiful latte art, but have lousy espresso. This in a lot of ways delays the industry and the public's knowledge base moving forward as a whole, but at least the trend tends to be upward.

The other reality is while you can have "quite respectable" coffee as your operations grow, the necessary logistics of a large scale coffee operation flies in the face of maintaining a high level of quality.

 

[CCafe]

Why are more Ford sold than BMW?

Ha I know the answer to that! The Ford is in my price range period!

 

[Mr.Peaberry]

Quality, in any form, is not about popularity. It's not about mass consumption or mass appeal. Why are more Ford sold than BMW? Why more Benihana than Nobu?

Actual "Third Wave" coffee shops will never have mass appeal, but I think that the trend towards better coffees and the public understanding there is a vast difference between the Starbuckian type places and those that take more of a craft approach.
Many places will crop up that speak the language, have beautiful latte art, but have lousy espresso. This in a lot of ways delays the industry and the public's knowledge base moving forward as a whole, but at least the trend tends to be upward.

The other reality is while you can have "quite respectable" coffee as your operations grow, the necessary logistics of a large scale coffee operation flies in the face of maintaining a high level of quality.

Just to add to these outstanding observations John, there is a finite amount of good coffee in the world. The scarcity of the good coffee is what is driving this 3rd wave. If you understand what is happening with Kopi Lewak, you will see a textbook example of how the efforts to increase supply of an overvalued commodity has led to the degradation of the commodity itself. I believe genuine, "free range" lewak coffee, is overpriced even for those who value it for it's unique qualities, and soon the market will right itself as people begin to understand that there are many good coffees in the world that cup better than coffee poops (for Alex). Anyhow, just had to add my 2 cents to John's more than adequate response...

 

[Steenway45]

Agreed, John. I think there is also a stigma against thinking about coffee in terms like organic vegetables, all natural meat, or free range chicken, etc. That it's such an abundant commodity that who really stops to think, "Is this fair trade, organic, pure, etc?" If this third wave is going to take hold seriously, it'll need a paradigm shift in how coffee is viewed.

 

[JohnD18]

In addition to all of these excellent answers and observations, I think it also has to do with the general clientele that frequents Starbucks, and what they are buying when they go there. I think if you got a hold of the Starbucks register data, you would see very few people ordering the type of drinks commonly ordered in "Third Wave" coffee shops. I would never think to order a straight espresso, macchiato (not that they make them correctly anyway), black coffee, pour-over (not that they offer such things...in most stores) or cold brew (Starbucks cold brew tastes like it came out of a Ford F250), or essentially any drink that you are looking to experience the actual flavor of the coffee. That is not the market Starbucks is in (currently) and not the one that nets them hundreds of millions of dollars in profit. They're cash cows are 16 - 32 oz"espresso" drinks with more sugar than a coca-cola. There is a huge demand for this, and it will never go away.

However...the market for "Third Wave" or just better coffee in general is growing, fast. Peets just bought Stumptown and Intelligentsia, and Blue Bottle is raking in 10's of millions of dollars in venture funding. Starbucks is also in an experimental mode I think with that R "reserve" brand they're pushing. Who knows what will become of that though.

Anyway, demand for better coffee is growing, and what used to be limited to small pockets of a city and indie roasters is growing and gaining more attention. Whether the crops and production can keep up is another question.