Saturday, December 29, 2007

Starbucks Bows to the Italian Baristi

The ANNOTICO Report

Many Italians feel their country is immune to invasion, because of the quality of the coffee beans, the desirability of proper cups, an aversion to American imperialism and the all-powerful Italian barman, or barista, and his informed conversation on last nights football.

Italians do cherish the barista  who knows their order, from a bewildering selection, and serves it instantaneously.

Starbucks can not match Italians on price, and foreign multinationals have historically had a hard time navigating planning laws in Italy to build a network quickly and with enough scale.

Howard Schultz, the founder of Starbucks’ success, derived his ideas from a trip to Italy,  But brushing aside all the foregoing hurdles, Schultz claims "It’s more out of humility and respect that we’re not in Italy, We would want to be very careful ?.?.?.? It’s not for business reasons and Italy is not less of a strategic priority."

Outside Edge: Starbucks Bows to the Italian Baristi

The Financial Times

By Adrian Michaels

December 26 2007 

The Starbucks diaspora reached six more countries this year, including Russia and Egypt, bringing the total to 43. Among those countries where the chain is not: Djibouti, Mongolia, Italy. (I originally wrote "Jordan", but it turns out Starbucks is there.)

Italians, as everyone knows, are fixated on their caffeine: the breakfast of champions is an espresso inhaled while standing up. It seems incomprehensible that Starbucks has not felt able to launch lattes in Livorno, or flog frappuccinos in Florence. Could 2008 be the year?

Many Italians feel their country is immune to invasion. Mention Starbucks and you will receive a load of steam and froth about the quality of the beans, the desirability of proper cups, an aversion to American imperialism and the all-powerful Italian barman, or barista, and his informed conversation on last nights football.

Italians do cherish the barista  who knows their order. It cannot be easy. One banker told me: "My barman has been at the same bar for at least 10 years. Even though the four of us [in the family] have different coffees - macchiato, cappuccino dorzo, a marocchino and a cappuccio. We dont have to order: he serves them as we enter."

I should explain that a macchiato is an espresso with a dash of hot foamy milk, a marocchino is a bit like a small cappuccino with cocoa powder, a cappuccio is Milanese for cappuccino and a cappuccino dorzo is not coffee at all but some substitute made of barley.

But Starbucks can play the bewildering game too. You could order a "half caff, dry, quad, tall white soy mocha", and then settle down to your steamed white chocolate and (no foam) soya milk with two shots of regular and two shots of decaffeinated espresso, served in a 12oz cup.

It is true that the best Italian coffee would blow Starbucks away, but I suspect the chain could win on trendiness and innovation. The reasons for Starbucks absence are more mundane.

Starbucks would be pitched into huge competition in Italy without offering a better price. An espresso in Italy usually costs less than 1, while a double espresso is 2 at Starbucks in Paris and you cannot buy a single. Service would have to be faster - Italians expect their coffee in seconds.

Also, foreign multinationals have historically had a hard time navigating planning laws in Italy to build a network quickly and with enough scale.

Howard Schultz, the man most closely associated with Starbucks success, derived his ideas from a trip to Italy. "Its more out of humility and respect that were not in Italy," the company told me. "We would want to be very careful ?.?.?.?Its not for business reasons and Italy is not less of a strategic priority."

Maybe so, but the company has made more of a priority of 43 other countries first. Whatever the logic, Im sure the barista on Venus is more worried than the one in Venice.

The writer is the FTs Milan correspondent

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