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Innovation

Starbucks targets Dunkin Donuts, McDonald's with Seattle's Best

Starbucks will roll out a second brand -- Seattle's Best -- in fast food restaurants, supermarkets and vending machines.
Written by Andrew Nusca, Contributor on

In an effort to challenge Dunkin Donuts and McDonald's for the average Joe's cup of coffee, Starbucks will roll out a second brand -- Seattle's Best -- in fast food restaurants, supermarkets and vending machines.

The brand, a rival that Starbucks acquired seven years ago, is already sold in Borders bookstores and thousands of supermarkets.

But in the fall, Seattle's Best will begin sweeping the shelves of some 30,000 supermarkets, convenience stories, kiosks, vending machines, carts, trucks and fast-food outlets, including Burger King, Subway and AMC movie theaters.

The Wall Street Journal reports:

Especially during the recession, the incursion appeared to hurt Starbucks, which suffered a decline in same-store sales and closed hundreds of stores. In recent years, as McDonald's produced big sales gains inside existing stores, Starbucks has struggled to expand beyond a limited menu and a largely morning clientele.

With a revamped brand comes a new logo and new slogan: "Great Coffee Everywhere."

There are business risks to the move. For one, Starbucks will have to control the brand through franchises at a large scale -- larger than even its namesake brand, it appears -- and maintain quality control.

There's also a branding pitfall. Just as Starbucks' Via instant coffee has confused the personal, handmade touch the brand stands for, so could the mental connection that Seattle's Best is merely a watered-down version of Starbucks shoved in a vending machine.

One opportunity: no single brand has conquered the convenience store market.

The strategy? The company will tout the Seattle's Best coffee as "smooth," in contrast to its stronger house Starbucks blend.

Further, the company will price the beans slightly above average, but below those of the Starbucks brand.

While Starbucks tries to reposition its brands, one question is clear: will Americans buy coffee from a vending machine?

This post was originally published on Smartplanet.com

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