starbucks in australia

[Ken Gargett]

i'll be honest, when i first heard of starbucks i assumed they were some sort of caffeine maccas, and it would be pretty average coffee pumped out. i later learnt that they are supposed to be pointy end. i went once to the one in sydney only because it was next to where i had a meeting. i did not come away thinking they were total crap but definitely not Best Coffee Ever.

thought this might be of interest to some. from the munchies site.

 

This Is Why Australians Hate Starbucks

 

That’s because they’re all in the laneway espresso bar around the corner, chatting with a barista who notices that they’ve done something new with their hair and knows how they like the froth on their almond milk macchiato.

Unlike almost every other country in the developed world, Australia does not do Starbucks. The international coffee monolith launched its first Sydney cafe in 2000 before opening a further 84 outlets across Australia’s eastern coast. Just eight years later, it had stacked up $143 million in recorded losses and was forced to close 60 stores.

In comparison, a new Starbucks has opened in China—a country where the majority of the adult population is lactose intolerant—every five days since it expanded there 16 years ago.

 

The biggest stumbling block in Starbucks’ attempt for Down Under domination is that Australia’s cafe culture is just too damn good.

 

It doesn’t take a marketing genius to see where Starbucks went wrong with its foray into the Australian market. Rather than building an organic demand for their coffee-flavoured syrup slushies, the chain bombarded potential customers with multiple store openings over the space of a few months. The premium prices and questionable customer service didn’t help much either.

Despite faring worse than a country inhabited almost entirely by clientele who suffer violent diarrhoea when ingesting your product, the Australian-owned Withers Group recently announced that they would be buying up the remaining Starbucks cafes. According to Chief Executive Warren Wilmot, the aim is to make Starbucks “the most successful coffee chain in Australia”. (A spokesperson from the Withers Group wasn’t available to comment for this article.)

Wilmot may be aiming high, but even a carefully executed business plan won’t bypass the biggest stumbling block in Starbucks’ attempt for Down Under domination: Australia’s cafe culture is just too damn good.

Thanks to waves of Italian and Greek immigrants in the early 1950s, Australia adopted the art of espresso-drinking-as-a-social-lubricant much earlier than the United States. While Starbucks introduced Americans to a European Lite version of coffee shop culture, in Australia it was a latecomer to a party no one invited it to.

“Starbucks was revolutionary in the US because the market is more accustomed to drip coffee,” explains Tuli Keidar, head roaster at Sydney’s Mecca Espresso. “Australia already had a well established cafe culture based on espresso when Starbucks arrived. It had to compete with cafes that provided a similar product of equal or better quality.”

There are over 10,000 cafes in Australia. No square of urban real estate lasts for long without being decked out with an espresso machine and ironic seating area fashioned from milk crates and hessian cushions. I once had a soy latte in a former crack den.

 

No one likes it when a new Starbucks opens in their neighbourhood, but don’t pretend you’ve never eased a particularly insistent hangover with a Grande Americano.

“I think we have really taken the bull by the horns and embraced coffee as part of our social fibre,” says Toby Smith, founder of the Toby’s Estate roastery and espresso school in Sydney. “Australians really love to socialise around food and coffee, it suits our relaxed lifestyle.”

As many of the cafes Starbucks competes with are independently owned, many Australians also took a moral stance against the American mega-chain’s invasion. No one likes it when a new Starbucks opens in their neighbourhood, but don’t pretend you’ve never eased a particularly insistent hangover with a Grande Americano. In Australia, that’s not an option.

“I think that for Australians, cafes act as community hubs,” says Keidar. “An independent cafe is more likely to match the needs and culture of the community than a chain store like Starbucks which imposes itself onto the community.”

It also didn’t help Starbucks’ case that most Australians can see through their sugar-laden excuse for coffee. Knowledge of “good coffee” has grown in recent years, with many independent roasters now running cupping events (like wine-tasting but with coffee and more slurping) and coffee appreciation courses. In Australia, the average Joe could tell you a lot more about their cup of joe than you’d expect.

“When it comes to coffee, many Australian cafe owners believe that the food and drink associated with breakfast does not have to be inferior to what restaurants produce at dinner time,” says Keidar. “We don’t have a rigid food culture and so Australians are quite open minded about trying new things.”

Australia may lag behind in coffee consumption per capita (the average Aussie manages just 0.3 cups a day, compared to the Netherlands’ 2.4) but it comes out top in all-round coffee snobbery. It would probably be more representative to have the blokes on the Fosters ads discussing aeropress brewing methods rather than sipping beer. But what is it about Australian coffee that has made almost an entire nation reject one of the world’s most successful brands?

“A ‘good blend’ can be a subjective thing but it needs to have good body and punch, so it has presence when served with milk,” explains Smith. “We want it to have sweetness and acidity so it makes a good black coffee and has character. It also has to have a certain complexity and structure about it, so it engages the drinker.” Bet the guy who made your Pumpkin Spice Latte couldn’t have told you that.

While the future of Starbucks in Australia looks less than certain, there is one area the indies can’t win. “I don’t really go to Starbucks,” says Keidar. “If I did, it would probably be in an airport, and I would order a frappe. With cookies in it.”

Alright Starbucks, we’ll let you have the monopoly on red eye flight milkshakes.

[IGIEM]

Brilliant article Ken, thanks for sharing! As the co-owner of an independent coffee shop here in London, and employing almost exclusively Aussie baristas, I can totally see why Starbucks just hasn't worked in Oz.

Without the shadow of a doubt, London owes its vibrant coffee culture to Australian entrepreneurs who opened the first indies about 10 years ago


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[KnightsAnole]

Starbucks is the butt of many a joke on this side of the pond as well, but the masses still swarm for their morning communion. Pre-Starbucks coffee culture here consisted of a donut to dunk while driving to work. Cafe culture has not really caught on in US, in a large part because we work too much. Indeed, many Starbucks have taken up the fast food model and built in a drive-thru. SB, like Home Depot, has all but decimated what few mom & pops there were. When they started out, around 20 years ago, they weren't half bad. But now, with the corporatized philosophy of giving the least quality for the most cash, while riding the coat tails of some initial success and trendiness, it's just horrible. In the cities, yes, Starbucks is king cause you can't get a coffee anywhere else in 10 (ish) minutes. Move away though, and they are rejected. Mostly because they are viewed as an overpriced, city slickers choice in coffee. Rural areas still like their traditional krispy kremes and dunkin donuts. Having said that, much like craft beer, home roasted coffee is gaining quite a bit of popularity in the US as many discover what good coffee could actually be. In fact, in some areas, I've seen a new emergence of coffee houses, a repudiation for those in the know.

[Jeremy Festa]

Good read

Accurate 

 

 

 

[MIKA27]

Very good article and so true about coffee stores vs Starbucks.

Saying this, their ice blend drinks such as their Coffee Mocha Frappuccino (No cream  ) are brilliant during our hot summers.

[Fuzz]

Good read. Starbucks was never gonna take off in Australia. Starbucks idea of what a "coffee" is, is so far away from what Aussies know as coffee. Considering that coffee is not the predominant ingredient, they really should have marketed their drinks as "X Flavoured" Crappaccino with a hint of coffee.

[PigFish]

My friends in Oz:

Please, teach someone at Charbucks how to roast coffee. Send them back to the States so that they can teach others! If you are going to kick them out, fine! Just teach them something first!!!

Best, the Pig

[luv2fly]

Yep.  I can burn my own coffee.

[Williamos]

It's lovely to see pockets of resistance holding out against the rise and rise of the franchises.

I recall Starbucks opening a shop on Lygon street in Carlton in Melbourne, the place where post war Italian immigrants set up coffee culture in the 1950s, which already had 20 or so very well established cafes and restaurants plying wonderful coffee. Lygon street for Melbournians is a famous institution. Starbucks shut after a couple of years running at a loss. A similar fate was in store for the Lygon street McDonalds. People were sad that people lost their jobs but laughed at the Goliath retreating with tail between legs.

There's definitely a cultural component at play here. People are seeking more than the product. Franchises the world over are built on the idea of consistency of product at the expense of things like atmosphere. Small businesses can experiment.

I'd be interested to know what proportion of Australian GDP stems from small businesses compared to the U.S.


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[Fuzz]

9 minutes ago, Williamos said:

It's lovely to see pockets of resistance holding out against the rise and rise of the franchises.

I recall Starbucks opening a shop on Lygon street in Carlton in Melbourne, the place where post war Italian immigrants set up coffee culture in the 1950s, which already had 20 or so very well established cafes and restaurants plying wonderful coffee. Lygon street for Melbournians is a famous institution. Starbucks shut after a couple of years running at a loss. A similar fate was in store for the Lygon street McDonalds. People were sad that people lost their jobs but laughed at the Goliath retreating with tail between legs.

There's definitely a cultural component at play here. People are seeking more than the product. Franchises the world over are built on the idea of consistency of product at the expense of things like atmosphere. Small businesses can experiment.

I'd be interested to know what proportion of Australian GDP stems from small businesses compared to the U.S.


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If I recall correctly, small business (less than 20 employees) contributes about 32-36% to GDP in Aus, compared to about 44-48% in the US.

[JohnS]

On top of the poor coffee and the poor customer service alluded to in the article, the poor quality of refreshments and their expense made me walk away from giving Starbucks any further business in any of their Sydney stores. There's too many quality competitors in this town for sure.

[Lotusguy]

"Charbucks" - so true and I love it. Their stuff just tastes burnt, period.

[gweilgi]

9 hours ago, EGM said:

Brilliant article Ken, thanks for sharing! As the co-owner of an independent coffee shop here in London, and employing almost exclusively Aussie baristas, I can totally see why Starbucks just hasn't worked in Oz.

Without the shadow of a doubt, London owes its vibrant coffee culture to Australian entrepreneurs who opened the first indies about 10 years ago


Sent from my iPhone using Tapatalk

Let's not forget the stalwarts who kept the flag flying for all those decades of utter tea domination -- Monmouth Coffee, the Algerian Coffee store, or the venerable HR Higgins!

I do wish all those Aussies in Blighty would do the same for our pub culture .... if I see another real pub transmogrified into a wine bar, I shall start lobbing petrol bombs.

 

[Ken Gargett]

11 hours ago, KnightsAnole said:

 Cafe culture has not really caught on in US, in a large part because we work too much.

thanks for the thoughts. in teresting.

that said, i am assuming the above quote is tongue-in-cheek or have you just declared all nations who enjoy their coffee as bone lazy slackards?

[wabashcr]

I've quit caffeine, so I haven't had any use for Starbucks for several years.  Even when I drank coffee daily, I would only visit a handful of times a year.  I don't know anyone who goes there with any regularity.  Yet I pass 3 of them on the way in to work in the mornings, and without fail the parking lots are packed, and the line for the drive thru is at least 6-8 cars deep.  They must be doing something right.  We have a smattering of independent coffee shops, too.  But they're generally in hipster or yuppie areas, and tend to be far more insufferable than the corporate blandness of a Starbucks.  

[maxcjs0101]

1 hour ago, Ken Gargett said:

thanks for the thoughts. in teresting.

that said, i am assuming the above quote is tongue-in-cheek or have you just declared all nations who enjoy their coffee as bone lazy slackards?

I knew someone was going to pick that up. 

[Fuzz]

Starbucks don't peddle caffeine to their addicted followers, they deal in the other South American white powder.... sugar!

[OZCUBAN]

The"McDonalds" of Coffee......

[KnightsAnole]

5 hours ago, Ken Gargett said:

thanks for the thoughts. in teresting.

that said, i am assuming the above quote is tongue-in-cheek or have you just declared all nations who enjoy their coffee as bone lazy slackards?

Quite the opposite Ken. I am quite critical that Americans work too much. It was not meant as a dig mate, just an observation. 

[Dimmers]

5 hours ago, KnightsAnole said:

Quite the opposite Ken. I am quite critical that Americans work too much

I wouldn't necessarily go mixing up work-ethic or volume of work-hours, with modern society's cult of "give it to me now take-away" (or "always plugged in for news/ social media updates" etc etc). FOMO FOMO FOMO

[Fuzz]

6 hours ago, KnightsAnole said:

Quite the opposite Ken. I am quite critical that Americans work too much. It was not meant as a dig mate, just an observation. 

In comparison to other OECD countries, American hours per worker is slightly above the average. Your counterparts south of the border work the most, and those damn efficient Germans work the least number of hours per worker.

[Duxnutz]

On 7 September 2016 at 9:16 AM, KnightsAnole said:

Starbucks is the butt of many a joke on this side of the pond as well, but the masses still swarm for their morning communion. Pre-Starbucks coffee culture here consisted of a donut to dunk while driving to work. Cafe culture has not really caught on in US, in a large part because we work too much. Indeed, many Starbucks have taken up the fast food model and built in a drive-thru. SB, like Home Depot, has all but decimated what few mom & pops there were. When they started out, around 20 years ago, they weren't half bad. But now, with the corporatized philosophy of giving the least quality for the most cash, while riding the coat tails of some initial success and trendiness, it's just horrible. In the cities, yes, Starbucks is king cause you can't get a coffee anywhere else in 10 (ish) minutes. Move away though, and they are rejected. Mostly because they are viewed as an overpriced, city slickers choice in coffee. Rural areas still like their traditional krispy kremes and dunkin donuts. Having said that, much like craft beer, home roasted coffee is gaining quite a bit of popularity in the US as many discover what good coffee could actually be. In fact, in some areas, I've seen a new emergence of coffee houses, a repudiation for those in the know.

In my old 'hometown' of Milwaukee, Starbucks never seemed to get a foothold over the local coffee place (Alterra now Collectivo). As someone who enjoys well made coffee vs endless lattes/cappuccinos I really miss that place. 

I don't mind the old pike place blend, a thermos full of that has probably kept me alive and kicking instead of driving into a ditch or falling asleep at the wheel (yoke) over the years.

[Duxnutz]

23 minutes ago, Fuzz said:

In comparison to other OECD countries, American hours per worker is slightly above the average. Your counterparts south of the border work the most, and those damn efficient Germans work the least number of hours per worker.

Don't get me started on annual leave! 4/6 weeks here vs 2-3 in the US (average) and a very liberal 'sick leave' policy here. Not that I'm complaining! 

[Fuzz]

6 minutes ago, Duxnutz said:

Don't get me started on annual leave! 4/6 weeks here vs 2-3 in the US (average) and a very liberal 'sick leave' policy here. Not that I'm complaining! 

Aussies work less hours than the OECD average... but then again, with our beaches and climate, why wouldn't we?!

[kuma]

I think the cafes in Europe (Italy, France etc, etc.) may have somthing to say about "best"

cafe(s).  Europe is built for cafes.  Cafes allow you to sit for hours people watching while

you sip your fav espresso with the best crema in the world.  Crema is that little bit of

foam sitting on top of your espresso if is made the correct way.