Defensive Strategy

The Starbucks-Seattle’s Best Brand Portfolio

4 Jun 2010  

Starbucks is making some big moves with its brand portfolio, dramatically elevating the role of Seattle’s Best Coffee.

Executives at Starbucks first announced plans to dramatically expand Seattle’s Best and then rolled out a rebranding effort.

The expansion for Seattle’s Best is dramatic; executives are planning to reach 30,000 locations within a year, up from the current 3,000 locations.  This increase will come from outlets such as Burger King, AMC Theatres and Borders.  Seattle’s Best will also go after commercial coffee machines, those devices you sometimes see in an office that produce really terrible coffee..

The rebranding is even more dramatic.  The old Seattle’s Best logo is gone, replaced by a modern, subtle and minimal look that is stylistically similar to the new Pepsi logo, the new Kraft Foods logo and the (terrible) Tropicanna logo.

Seattle's Best Coffee logos: old and new

Will this all work?  It might.  I can certainly see the objective here: growth.  And I salute Starbucks for using a second brand to grow instead of further stretching and diluting the Starbucks brand.

The challenge is that Seattle’s Best is now becoming another fine but undifferentiated brand of mainstream coffee, a bit like Folgers and Maxwell House.  And it is tough to command strong margins without some meaningful differentiation.

My prediction:  Starbucks will succeed in building distribution for Seattle’s Best but profits won’t amount to much.  If Starbucks the company does well it will be because Starbucks the brand does well.

7 Responses

  1. coffee machines…

    […]The Starbucks-Seattle’s Best Brand Portfolio « Building Strong Brands[…]…

  2. craig kensek says:

    RIM hasn’t created a low end crackberry, but they are actively upgrading the current product, trying to make the product more like Droid. Unfortunately, they’re way behind in number of apps. You may want to read Mossberg’s review of the latest Blackberry in the August 5th issue of WSJ.

  3. Manar Alazma says:

    There’s been a lot of not-so-good press about RIM’s launch of its newest Blackberry – the Torch. Everyone is raining on RIM’s parade because they wanted RIM to address the consumer (vs. enterprise) market, and they really haven’t. But is that so wrong? RIM knows its target market very well, and they know that they’re not Wii-wielding folk; they’re in suits and care most about their email and a few other apps. So why is there an expectation that they should dilute this brand?

    Reading your post on Starbucks vs. Seattle’s Best reminded me that the best way for RIM to play in the consumer segment is to create new hip sub-brand, may be Kranberry. As it is Blackberry is a sub-brand of RIM, so why not create another and give it the freedom to develop a product unencumbered by the Blackberry mantra?

    I’d be interested in your thoughts…

    • Tim Calkins says:

      Manar—I think it makes good sense for RIM to stay focused on the business segment. It will very hard to beat Apple in the consumer space. RIM will be well served by playing its own game.

      RIM could certainly introduce another brand, but the smart phone space is so swamped with names that I’m not sure it would work. Blackberry has too many brands already…Curve, Bold, Torch. Who cares about these names? iPhone is iPhone. BMW is BMW.


  4. craig kensek says:

    Interesting how they’ve changed the logo. The original Starbuck’s logo was much more realistic (if you can call it that), in it’s portrayal of the mermaid. As Starbuck’s grew, the mermaid became much more G rated.

    Seattle’s Best has been treated quietly as a B brand, IMHO. Most people don’t realize that it’s owned by Starbucks. Seattle’s Best is the brand already present in Border’s bookstores so they have a great presence there. Meanwhile, Starbucks is in the Barnes & Noble bookstore chain, though you can’t use the Starbuck’s debit card.

    Is diluting the brand in this industry kind of like decaffeinating it.

    In the security industry, Symantec is doing some of the above. They keep pretty quiet that they own the security firm PC Tools (Australia based)

  5. Is there something to be said for this as a move to protect the Starbucks brand from lower cost competition? It lets the company play in that space without hurting the Starbucks brand name.

    • Tim Calkins says:

      Having two brands clearly protects the Starbucks brand; it gives the company a different brand to use when an outlet isn’t up to Starbucks standards.

      Nike uses a similar strategy, selling the Nike brand in select outlets and using other brands more broadly.

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