Op-Ed: Starbucks Struggles With Value - an Answer Found in Coffee Beans

Posted Mar 25, 2009 by Michael Krebs
Numerous stunning health benefits found in coffee consumption have little effect on sales at Starbucks as the company struggles to communicate its position in a value-oriented economy. Where do health and economics meet?
Starbucks coffee shop
Starbucks coffee shop
Digital Journal
Last week Howard Schultz, CEO at Starbucks Corporation stood before an annual investor meeting and spoke about a key challenge facing the company.
"Starbucks has got to demonstrate to our customers and the marketplace that we can still be a premium brand and create a premium experience and at the same time create a platform for value," he said in a Wall Street Journal report.
As the economy forces many people to trade down on their usual consumption, those decisions are leading some consumers to give up not only what they enjoy but what may very well be beneficial to them. In this regard, the greater value may also be the greater evil. Success stories found in fast food establishments during these challenging times stand as examples of this phenomenon.
For example, a gourmet salad priced at $7 might have an immediate impact on pricing consideration versus a $5.50 meal - with soft drink and french fries - at McDonald's. Value - here defined at $1.50 - trumps health.
But where do good health and good economics meet?
Coffee has very recently emerged as a near-wonder bean. The benefits of coffee consumption are now tied to risk reductions in diabetes, colon cancer, Parkinson's disease, liver disease, cavities, and gallstones. America's favorite morning beverage may very well be preventing some of America's greatest health challenges.
Harvard University studied the effects of coffee consumption on diabetes and on Parkinson's disease.
"Although between 1 to 3 cups per days sounds healthy, Harvard went on to say that after looking at the data from the past two decades from over 100,000 participants, the calculations show that having up to 6 or more cups of coffee each day cut the risk of diabetes for women by 30 percent and a whopping 54 percent for men," reported Health News. "There are six separate studies that were conducted showing that the risk for being diagnosed with Parkinson’s disease was lowered by 80 percent with regular coffee indulgence."
These findings are quite significant, and if the American population is turning to junk food as a value mechanism - and increasing exposure to the diabetes precursors - coffee may very well be a valuable antidote for these value-oriented meal decisions.
"Though the scientists give the customary 'more research is needed' before they recommend you do overtime at Starbuck's to specifically prevent diabetes, their findings are very similar to those in a less-publicized Dutch study, " Sid Kirchheimer reports at WebMD. "And perhaps more importantly, it's the latest of hundreds of studies suggesting that coffee may be something of a health food -- especially in higher amounts."
So, given the long-term benefits, how does one assess value in a $4 cup of coffee at Starbucks? Is this not a self-investment? It could be that many in the population are already depressed from the scores of bad news to even consider a positive investment, but when looking at the benefits that coffee - and tea for that matter - provide in relation also to the immune system, it seems that a hot cup can go a long way toward stifling the internal impacts of that very depression.
But it is where the two intersect - the abstract notions of values and benefits - that ultimately will determine the success ratios of the Starbucks and McDonalds businesses and the collective shape of American health.