$7 Coffee – Has Starbucks run out of ideas?

Nov. 29, 2012 | by Darrel Suderman

Why would anyone buy a $7 cup of black coffee? Why would Starbucks even think about selling $7 black coffee? Does Jimmy Kimmel's "taste test" outside a local Starbucks have any value? And does $7 make business sense?

All questions have simple and complex answers.

Why would anyone buy a $7-cup of black coffee? I can think of a lot of reasons. First, our curiosity compels us to try something new and intriguing. Humans want to explore the unknown. Most of us will try something 'once", and then we form opinions whether we like it or not. In many ways, trying a $7- cup of coffee is no different that tasting a $2,000 bottle of wine. So the second reason to try it is to expand our sensory pallet of coffee, and share our opinions with others. And in many ways, it is just FUN trying new things. Mark this a win for Starbucks!

Why would Starbucks even think about selling $7 black coffee? This question is much harder to answer than the first question. I don't know why Starbucks would think about selling a $7 cup of coffee. To me, it seems that Starbuck's marketing department has run out of ideas. Why place the marketing energies of an international corporation against a product that may account for less than 1 percent of sales? But then again, beer companies have developed a 1,000 new ways to sell the same beer product over the past 50 years – maybe the same approach is required for coffee. Mark this a loss for Starbucks!

Is there value to a Jimmy Kimmel's coffee "taste test"? Jimmy Kimmel recently conducted a coffee taste test outside a Starbuck's store, asking random people to compare Starbuck's new $7-coffee to their regular coffee. Hint: the consumers didn't know both samples represented the traditional coffee. To me, the results were not surprising. All consumers except one picked a clear winner. The lone exception was an average customer that said "I don't taste any difference". What the other customers did was to show the flaws in many consumer sensory taste test methodologies – when they select poor sensory descriptor names and flawed design. Mark this as a win for Jimmy Kimmel! (Watch the Kimmel taste test below.)


Does marketing a $7-cup of coffee in the midst of our country's greatest recession make any business sense? The immediate answer to this question is, NO! Millions of people in the United States still suffer unemployment with no hope insight. Even McDonald's understands this and provides economical pricing to consumers throughout the holiday season, while giving them high-quality coffee. I think it reaps arrogance, while humility should prevail for our fellow citizens. Mark this as a loss for Starbucks!

Topics: Coffee / Specialty Beverages

Darrel Suderman / Darrel Suderman, Ph.D., is president of Food Technical Consulting and founder of Food Innovation Institute. He has held senior R&D/QA leadership positions at KFC, Boston Market, Church's Chicken and Quiznos and led KFC’s development team of “Popcorn Chicken”, now a $1B international product –invented by Gene Gagliardi.
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