Starbucks solves the insect problem (yum!)

"As our customers you expect and deserve better -- and we promise to do better. After a thorough, yet fastidious, evaluation, I am pleased to report that we are reformulating the affected products to assure the highest quality possible." --- Starbucks U.S. President Cliff Burrows

What is old Cliff talking about? You ask?

Starbucks will stop using cochineal extract --a dye derived from crushed insects -- to color select beverages and baked goods.

The company came under fire when news hit the web that it was using the surprising ingredient.

Is this why Starbucks is serving beer at some locations this year? [read: Yeah! Booz it up at Starbucks]

Yeah! Booz it up at Starbucks!

Starbucks billionaire Howard Schultz, always the innovator, always test marketing new ideas has a new one for 2012: beer and wine!

After (supposedly) a very successful recent test market campaign in the Pacific Northwest, Starbucks has decided to roll out the very liquid beverages elsewhere in the United States this year. Southern California, always up for a good time, is next on the list for a beer and wine phase-in at selected stores in the Southland.

Not everyone is enthusiastic about the upcoming booz-for-bucks Starbucks campaign:

 “This is just a way for Starbucks to turn into bar bucks,” --- Michael Scippa, public affairs director for Alcohol Justice, a northern California non-profit based in San Rafael, California.

Yeah! Enjoy a cold one, Howard!

The Starbucks and Netflix price increases

Starbucks, with its stock currently selling at an all-time high at $46 per share (NASDAQ:SBUX) has decided to increase java prices in select markets (the Northeast).

Howard Schultz, chairman and CEO of Starbucks [net worth $1.1 billion], has done a remarkable job with the turnaround efforts of the company over the past 5 years.

One online poll asked: Will Starbucks' price hike change your coffee-drinking habit? (32% answered:) I've had enough of these incremental price hikes everywhere I look; I'm drawing the line and switching to a cheaper brew. If true, Starbucks is conducting an interesting price-elasticity market test.

The economic question of the day then becomes: why the lack of uproar over the Starbucks price increase, compared with the Netflix price increase? Sure, we are trying to compare coffee with movies. A produce with a a service. But it is an interesting question.


Our answer to this question includes: politics, target market demographics, and public relations power of the individual firms.


Enjoy your coffee today!