Coffee company Considering Brand Expansion

Starbucks has always offered edible items such as desserts, cookies, and other sweet treats. But the Seattle based coffee company is now talking about expanding into offering food items. While some food, and beverage PR watchdogs have said the move “only makes sense”, others have expressed concerns that Starbucks is expanding beyond its simple format, and menu, thus inviting more trouble than the move might be worth.

In this article Ronn Torossian, founder and CEO of 5W Public Relations, discusses the potential wins, and pitfalls of expanding your brand beyond a marketplace you currently dominate.

The Potential Benefits

#1 – Greater market share

Some of Starbucks’ largest competitors – Panera, for example – already offer a wide, and varied food menu. Starbucks already has the locations, simply gradually expanding the menu could easily siphon customers from competitors.

#2 – More money

If people are willing to pay $5 for coffee, what will they pay for artisan sandwiches and soups? More menu items could substantially increase Starbucks’ bottom line, if they choose wisely, and price their expanded items right.

#3 – Competition absorption

Given Starbucks’ enviable footprint, a café expansion could spell doom for many local, smaller competitors. These companies, along with their customer base, and revenues could be taken over by Starbucks’ greater resources, marketing reach, and brand recognition.

The Potential Pitfalls

#1 – Loss of identity

Starbucks is the quintessential American coffee shop. There’s one within walking distance from nearly everywhere. People who shop there know exactly what they are getting. If the menu expands it could not only change the offerings, but also change the ambiance, and customer base.

#2 – Brand confusion

To most people Starbucks means lattes, mochas, and frappuccinos. To add sandwiches, and other café menu items, might create brand confusion, both here and abroad. Starbucks’ brand developers, and PR managers must be careful to preserve their brand while expanding it.

#3 – Mediocre reviews

If they start selling food, and people don’t love it at least as much as they do the coffee, Starbucks could suffer from mediocre reviews. Because the bar of expectation is set rather high, anything less than artistic artisan sandwiches, and gourmet soups will meet with profound disappointment.

Will Starbucks find more success than pitfalls? Time will tell, but this should be a very interesting brand development to watch.

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Ronn Torossian is the Founder & Chairman of 5W Public Relations, one of the largest independently owned PR firms in the United States. Since founding 5WPR in 2003, he has led the company's growth and vision, with the agency earning accolades including being named a Top 50 Global PR Agency by PRovoke Media, a top three NYC PR agency by O'Dwyers, one of Inc. Magazine's Best Workplaces and being awarded multiple American Business Awards, including a Stevie Award for PR Agency of the Year. With over 25 years of experience crafting and executing powerful narratives, Torossian is one of America's most prolific and well-respected public relations executives. Throughout his career he has advised leading and high-growth businesses, organizations, leaders and boards across corporate, technology and consumer industries. Torossian is known as one of the country's foremost experts on crisis communications. He has lectured on crisis PR at Harvard Business School, appears regularly in the media and has authored two editions of his book, "For Immediate Release: Shape Minds, Build Brands, and Deliver Results With Game-Changing Public Relations," which is an industry best-seller. Torossian's strategic, resourceful approach has been recognized with numerous awards including being named the Stevie American Business Awards Entrepreneur of the Year, the American Business Awards PR Executive of the Year, twice over, an Ernst & Young Entrepreneur of the Year semi-finalist, a Top Crisis Communications Professional by Business Insider, Metropolitan Magazine's Most Influential New Yorker, and a recipient of Crain's New York Most Notable in Marketing & PR. Outside of 5W, Torossian serves as a business advisor to and investor in multiple early stage businesses across the media, B2B and B2C landscape. Torossian is the proud father of two daughters. He is an active member of the Young Presidents Organization (YPO) and a board member of multiple not for profit organizations.