Starbucks is still struggling to remake itself amid a global economic downturn that has dented people’s willingness to pay a lot for a frothy cup of coffee.
It does not seem to have made up its mind whether to become more of a value brand or stick with being a premium retailer. In fact, it is sending out signals that it wants to do both simultaneously.
So here is my suggestion: why doesn’t it become a retail bank as well as a coffee chain?
I realise that this sounds like a ridiculous idea (and may in fact be a ridiculous idea) but hear me out. Read more
It seems that Chrysler could eventually end up under the majority ownership of the UAW, its main union, with Fiat holding a minority stake. It sounds awfully like the revisiting of a past era.
In the 1980s, there was a rash of employee-owned companies emerging out of troubled private ownership. In 1994, United Airlines became majority owned by its employees after all else had failed. Read more
Good grief. Every so often, one learns something shocking about markets and this morning I found out that wholesale tea is priced in dollars rather than sterling (or the Indian or Chinese currencies).
This means that the British tea drinker is going to suffer even more from the rising price of tea than Americans because of the fall in the value of the pound against the dollar. Read more
I am not sure I believe the assertion by John Rishton, chief executive of the Dutch food retailer Ahold, that people will keep buying higher-priced food in a recession because it is an affordable luxury.
“It is relatively easy to forego a flat screen television, it is relatively easy to cut back on expensive luxury durable items,” John Rishton, chief executive, told the FT. Read more
As an orange juice consumer, I have observed the uproar over the new Tropicana cartons with bemusement. Even before a revolt blew up, I wondered what on earth Tropicana was thinking. Read more
Nespresso, Nestle’s brand of espresso coffee and coffee makers, seems to be going from strength to double strength, according to the company. The brand’s annual sales grew 30 per cent last year, taking them past the SFr2bn mark well ahead of schedule, the New York Times reports.
I wrote a column about the success of Nespresso and the similarities – such as the combination of products and services – that it bears to Apple’s iTunes and iPod (and indeed iPhone) combination. It appeared about a year ago and, despite the recession, Nespresso is still doing well. Read more
I can see two obvious flaws in the proposal by David Paterson, governor of New York (and Eliot Spitzer’s successor) to impose a “fat tax” on soft drinks such as Coca-Cola and Pepsi while allowing the diet versions of the drinks to escape.
One is that, if it really worked as advertised in making people cry off Coke and Pepsi, then the measure would not raise sorely-needed taxes for New York. In practice, the health aspect seems more like a cover story, rather like marketing taxes on petrol as “green taxes”. Read more
Is Big Cereal going the way of Big Pharma?
I ask because there seems to be some evidence of sagging innovation in the all-important breakfast cereal market.
Consider this article in Fortune that extols the relentless efforts by General Mills, the maker of Cheerios, Wheaties and Lucky Charms, to fatten its margins by cutting costs. It cites General Mills’ elimination of letter shapes in its Hot’n’Spicy Chex Mix, which has provoked this online protest petition.
Then consider this chart of branded cereal innovation in the 20th century produced by Geek Out New York. It shows a burst of cereal creativity in the mid-century that brought us such great names as Rice Krispies (1928), Cheerios (1941) and Special K (1956). There is a history of Cheerios here. Read more
So what will higher commodity prices and discontent among McDonald’s franchisees do to the Dollar Menu?
The question arose yesterday after McDonald’s disclosed its second quarter results and said it was considering changes to the Dollar Menu, which offers US customers items such as a double cheeseburger or a McChicken Sandwich for a dollar. Read more
I have reviewed a new book by Donald Keough, the former president of Coca-Cola, called The Ten Commandments of Business Failure in tomorrow’s FT.
Here are the first few paragraphs of the review: Read more
I cannot say that I was keen on New York City passing a law to force fast food restaurants to post the number of calories on the food items they sell. It struck me as a single state initiative that would cause of lot of bureaucratic difficulty for no very good reason.
Still, I am intrigued by the results, now that outlets have started to comply, and by the lesson that one’s instincts about which foods are calorie-rich are not always accurate. Read more
If Warren Buffett does team up with Mars to buy Wrigley for more than $22bn, it will be not only a quintessential Buffett deal but a reminder of where value lies in a downturn.
Mr Buffett has a sweet tooth, not only personally (he is known for his devotion to Cherry Coke) but as an investor. Berkshire Hathaway’s 8 per cent stake in Coca-Cola is among his longstanding stakes in big consumer brands. Read more
The world moves fast these days. Barely has one heard of something than it turns into a phenomenon.
Take the Clover filter coffee machine, which I learned the other day from perusing a local blog is an $11,000 machine that somehow makes better filter coffee than almost any of the alternatives. Read more
I am encouraged to return to the topic of supermarkets and plastic bags by the Daily Mail, my former employer (a long time ago). It has just launched a campaign to stop the proliferation of plastic bags in the UK under the slogan: Banish the Bags.
The Mail estimates that 13bn flimsy plastic bags are handed out by British high street stores each year. It is a classic example of companies and consumers not having to pay the financial cost of environmental destruction and therefore not caring about it. Read more
Further to my post the other day on the remarkable staying power of Marcel Ospel, the chairman of UBS, it seems the clock is ticking.
By cutting his term of office – and those of all board members – from three years to one, UBS is throwing a sop to investors who would like him to step down. Read more
Further to my ode to the joys of Nestle’s Nespresso machine the other day, here is the New York Times obituary of Ernesto Illy of Illycaffè fame. He ran "the Bell Labs of coffee" in Trieste before Starbucks had opened its first store in Seattle.
Further to my admiration for the supermarket in Davos that did not offer me a plastic bag, I note that it is only part of Switzerland’s green credentials.
Yale University’s environmental performance index, which was released at Davos, places Switzerland top of the league on factors including air pollution, water quality, greenhouse gas emissions per head etc. The study notes that wealth correlates closely with environmental performance: the richer you are the more you tend to care about such things.
I got a Nespresso coffee machine for Christmas this year and I have written an FT column about it. You can read it here and post comments below. Happy New Year.
A word of praise for my local coffee shop. It does indeed serve good coffee but another reason I like it is that it offers it in sizes "small, medium or large". Yes, that’s right. Not "tall, grande and venti". Or "large, extra-large and super-size".
My colleague Tim Harford has written elsewhere about how one now has to ask specially for a short cappucino in Starbucks as if is a samizdat item. The menu starts with tall. Read more