15th Avenue Coffee and Tea by Starbucks

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Re: Starbucks opening new concept store.

Postby Jeff Givens on Fri Jul 24, 2009 4:34 pm

This place should be very popular with the Anthropologie crowd.
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Re: Starbucks opening new concept store.

Postby Andrew Hetzel on Fri Jul 24, 2009 7:49 pm

Brett Hanson wrote:This is one of my favorite lazy misconceptions about Starbucks. There is no Scrooge McDuck money bin. Just like everyone else here, Starbucks sells food and beverages and makes a slim profit on it. If a store isn't profitable, it is not sustainable, period. If a store's business model is not sustainable, it will lose money, and as we have seen (and are continuing to see) that store must close.


My goodness, my comments seems to have touched on a nerve! Unfortunately, it seems that my statements have been misinterpreted. I was not referring to the glitz, gold and the fancy machines that we know. I explain:

Same store sales over the last 10 quarters has been at best stagnant and at worst plunging in the face of heightened competition from multiunit QSRs (like McDonald's, Dunkin', etc.) and better regional chains or independents. Wall Street desperately needs a sign, any kind of sign that there is a new spark that will not only improve profits, but improve the rate of growing profits. Since Q1 '08, management has been essentially throwing everything it can against the wall (instant coffee, fruity drinks, ice cream, breakfast sandwiches and oatmeal) hoping that something with stick, looking for the next big thing. Thus far, they've mostly managed to further dilute the brand image, giving an additional foothold to competition on all sides.

Wall St. was pleased with the recent cost reductions, but there does not appear to be any guidance of new ideas to come that can sustain the rate of profit growth in same store sales, let alone grow them beyond worldwide economic improvement out their control. Those institutional investors that I've spoken with had hopes that the new concept may represent a larger shift in philosophy than just a handful of units looking to bootstrap sales -- they want a plan, some new future for the company which will require innovation and not merely the sort restructuring that transforms ordinary corporate fast food sites into faux grunge independents. Whether or not we like the design is irrelevant, the question becomes, is this type of move one that can contribute to the transformation of the company in order to regain it's accelerating rate of profitability? Perhaps, but I do not believe so.

Hence, as I stated, I'm confused by the move. If only on a small scale and not likely to improve the broader organization. Why?
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Re: Starbucks opening new concept store.

Postby Marshall on Sat Jul 25, 2009 8:23 am

I'm cheered that Starbucks is trying out an upgraded concept, but puzzled by their choice of location and the identity misdirection. There are few communities more likely to be offended by a faux indie shop than Capitol Hill. Call it "Starbucks Artisan." Call if "Starbucks Plus." But don't hide Starbucks in the fine print.

I worked with a landlord client for two years trying to get a Trader Joe's built South of Market in San Francisco, and we nearly got ridden out of town on a rail by the anti-chain activists (they're getting a mega-bank, instead ... don't ask).
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Re: Starbucks opening new concept store.

Postby Andrew Hetzel on Sat Jul 25, 2009 11:12 am

Marshall wrote:I'm cheered that Starbucks is trying out an upgraded concept, but puzzled by their choice of location and the identity misdirection. There are few communities more likely to be offended by a faux indie shop than Capitol Hill. Call it "Starbucks Artisan." Call if "Starbucks Plus." But don't hide Starbucks in the fine print.


I agree completely.
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Re: Starbucks opening new concept store.

Postby Kyle Glanville on Sat Jul 25, 2009 11:47 am

Starbucks model is based on owning as much market share as possible. With the rebranded store, they have now entered the boutique specialty market. It was the only way to do it, and IMHO a very smart tactical move.
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Re: Starbucks opening new concept store.

Postby Alistair Durie on Sat Jul 25, 2009 11:51 am

Marshall wrote:I'm cheered that Starbucks is trying out an upgraded concept, but puzzled by their choice of location and the identity misdirection. There are few communities more likely to be offended by a faux indie shop than Capitol Hill. Call it "Starbucks Artisan." Call if "Starbucks Plus." But don't hide Starbucks in the fine print.


I'd call this "We want to play in your sandbox too". Starbucks is not the title of the store, but they ARE promoting the that it IS their store, and it is a different store - it is not a "Starbucks". They are big enough that they can do different concepts under different names led by totally different departments to capture more total market share (as Kyle said). I wonder if anyone has forgotten that Starbucks is a big coffee company doing a lot of different coffee things.

Its like someone called the brand police or something.
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Re: Starbucks opening new concept store.

Postby Brett Hanson on Sat Jul 25, 2009 3:57 pm

Andrew Hetzel wrote:My goodness, my comments seems to have touched on a nerve!


Not really, I'm just surprised that a self-described expert on the coffee business keeps using common misconceptions about the business of coffee as the framework for opinions and posting them here. Are these posts rhetorical? I don't mean to sound snippy (snipe-y?)- you are actually confusing me.

If you're interested in the technical reasons certain things were done in the store, my ideas are in my previous post.

If you want a wall st justification for this store and concept, here are a couple ideas.
(1) think of it as a working public laboratory for ideas that have potential for being profitable across the enterprise if shoe-horned into existing stores.
(2) think of these stores as being the Banana Republic to Starbucks's Old Navy. this has been discussed to death- see old pf podcast.
(3) there is no wall st justification- this store was not built to provide immediate gratification to wall st.
At the end of the day, sbux doesn't spend a lot of time (some time, sure) worrying about the whipsawing of wall st. They've never given monthly numbers like most retailers and I think it's been more than a year since they quit giving forward projections-- both are moves to allow the company to focus on the long term business.

I guess my focus is much more on the consumer since I am one, and little else. At the end of the day, which would you rather have at the end of your street? A circa 2008 store with superautos and drip? Or 15th Ave Coffee and Tea? This consumer is voting for the latter with his wallet.
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Re: Starbucks opening new concept store.

Postby Brett Hanson on Sat Jul 25, 2009 4:11 pm

Marshall wrote:I'm cheered that Starbucks is trying out an upgraded concept, but puzzled by their choice of location and the identity misdirection. There are few communities more likely to be offended by a faux indie shop than Capitol Hill.


I think it's simpler than you might guess. 15th Ave C&T was built in a recently-closed Starbucks location. It might have been as simple as "well, we still have 8 years left on this lease folks; how about here?"

Also, this store concept won't work everywhere. I think Capitol Hill was a perfect test- if it fails here in hipsteropolis, USA (don't get me wrong- I eat and drink so much in Capitol Hill I should consider forwarding my mail there), it will fail everywhere and can be scuttled, though that would make me sad.

As far as the name, I don't buy the "fooling" or "misdirection" as the reason. I think it was to prevent confusion and allow the company to try out ideas without being expected to deliver everything Starbucks does. Just imagine...
"What do you MEAN I can't get a frappuccino here?"
"Why can't I use my discount card?"
"Where is my Top Pot apple fritter?"

Also, in this era of relentless adjective-inflation "McD's coffee... premium coffee... premium roast coffee" isn't some little part of you relaxed by an address and purpose as a business name?

Never forget... Hanlon's razor.
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Re: Starbucks opening new concept store.

Postby nick on Sat Jul 25, 2009 9:11 pm

On a side note, I'm having a smile thinking back to the two times my April Fools' joke was that Starbucks was buying my shop to start an independent-coffee-shop brand. I did it in 2004, and just to see if anyone would fall for it again, I brought it back for 2007. It's weird that it sorta came true.

I hope I don't wake up to find my 4/1/2008 thing a reality some day. :shock:
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Re: Starbucks opening new concept store.

Postby phaelon56 on Sun Jul 26, 2009 7:53 am

Brett Hanson wrote:Also, this store concept won't work everywhere. I think Capitol Hill was a perfect test- if it fails here in hipsteropolis, USA (don't get me wrong- I eat and drink so much in Capitol Hill I should consider forwarding my mail there), it will fail everywhere and can be scuttled, though that would make me sad.[/url].


I've been in agreement with most of the points you've made thus far in this thread but I think you may have missed the mark here. I actually think much of the target demographic in Seattle, Capitol Hill in particular, is savvy enough to become aware very quickly of the Starbucks identity, lump the new place in with Starbucks core operation in their minds and also react to the inevitable negative local press (online or otherwise) about Starbucks trying to be more like a good indie shop with this concept. Not to mention that, despite the fact that there's far more bad espresso than good in the Seattle area, you are blessed with plenty of shops that do a stellar job and already have a loyal base of support. In other words - people seeking top shelf espresso drinks and a certain vibe already have plenty of options.

But what of the many second, third or fourth level markets where Starbucks has established a presence only in the past few years and in many cases (as with my hometown) not met with resounding success? In many of these other cities there may well be a market ripe for a quality driven independent shop yet none exists or there's only one such shop in a metro area with 200,000 to 300,000 people (again - my town being a good case in point). For a variety of reasons, one being the capital necessary for securing a good location and doing the right kind of build-out, many markets are ripe for such a place but no one has stepped in yet. I think that could prove to be a better market for Starbucks than cities such as Seattle or Portland. That said.... they have a reputation, in this area at least, for paying outrageous amounts of rent. In a market where a shop that averages $1500 to $2000 per day is the best one can expect (apart from a key location that may already be occupied by a traditional Starbucks) it's tough to pay $8K to $10 K per month for rent and sell enough coffee to be profitable.
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Re: Starbucks opening new concept store.

Postby Marshall on Sun Jul 26, 2009 9:20 am

Brett Hanson wrote:As far as the name, I don't buy the "fooling" or "misdirection" as the reason. I think it was to prevent confusion and allow the company to try out ideas without being expected to deliver everything Starbucks does. Just imagine...
"What do you MEAN I can't get a frappuccino here?"
"Why can't I use my discount card?"
"Where is my Top Pot apple fritter?"Hanlon's razor.


Point taken, Brett, but then why not go, as you mention, with a "Banana Republic" concept? A new name for a new (for them) line of shops, rather than pretending each shop is independent. Doesn't this just invite unnecessary mistrust?
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Re: Starbucks opening new concept store.

Postby Sean Starke on Sun Jul 26, 2009 3:02 pm

But are they really pretending each shop is independent, anymore than say Cadillac 'pretends' they're not part of GM? It seems to me from those pictures the Starbucks name is there but de-emphasized for exactly the reason Brett says.

Perhaps the folks at Starbucks want to have a brand/concept that makes coffee at a level that they simply can't do for 600,000 stores but they can in a few stores in select markets.

They've been in effect the "minor leagues" for many of you for a long time: introducing diner-drinking folks to very good coffee, many of whom then went on to y'all's shops after they "graduated" from Starbucks; maybe now Starbucks wants to capture back some of those customers. Good for them.

I just hope these new places don't have those damn wooden stirrers; gawd I hate those things.
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Re: Starbucks opening new concept store.

Postby Brett Hanson on Sun Jul 26, 2009 3:13 pm

phaelon56 wrote:
Brett Hanson wrote:Also, this store concept won't work everywhere. I think Capitol Hill was a perfect test- if it fails here in hipsteropolis, USA (don't get me wrong- I eat and drink so much in Capitol Hill I should consider forwarding my mail there), it will fail everywhere and can be scuttled, though that would make me sad.[/url].


I've been in agreement with most of the points you've made thus far in this thread but I think you may have missed the mark here.


Probably. Bear in mind I'm using my ideas with pure speculation to fill in the gaps.
phaelon56 wrote:I actually think much of the target demographic in Seattle, Capitol Hill in particular, is savvy enough to become aware very quickly of the Starbucks identity, lump the new place in with Starbucks core operation in their minds and also react to the inevitable negative local press (online or otherwise) about Starbucks trying to be more like a good indie shop with this concept.

True. Nobody who can read english or has access to a television should be fooled. As a customer, I take it as a signal that Starbucks is attempting something very different from their other stores. I don't attend every starbucks opening in this town. I did attend this one. I plan to visit again.
phaelon56 wrote:Not to mention that, despite the fact that there's far more bad espresso than good in the Seattle area, you are blessed with plenty of shops that do a stellar job and already have a loyal base of support. In other words - people seeking top shelf espresso drinks and a certain vibe already have plenty of options.

Also true, but customers constantly seek out something new and different. Quality minded coffee shops are not located fairly or proportionally per capita. Since my town has a high proportion of them, I'm going to shut my mouth (or open it in this case) and just enjoy them. I'm sure there's a capitalism/socialism rant to be inserted here-- I leave that to someone with a polisci degree.

For example, Trabant is just down the street from my place in the u district and they do a dandy job. Herkimer opened a shop just up from my place. First, I wondered aloud "why?" It wasn't long until I changed my tune to "awww snap. I'm going to Herk this AM." Until there is a shop at either end of my block that both serve good coffee, I'm going to keep looking throughout the city.

Witness the emergence and at-least-apparent-success of Stumptown. Did we need them in Seatown? No. Do I go there occasionally? Yup. They're different, not night and day different from some others in town, but enough that it's worth a trip now and again.
phaelon56 wrote:But what of the many second, third or fourth level markets where Starbucks has established a presence only in the past few years and in many cases (as with my hometown) not met with resounding success?

If the company finds success with the concept, I don't see why they wouldn't spread it to places that could use it. Related to this, somewhere in this thread there was talk of "I won't be happy until sbux does this concept everywhere". To that point, first, it can't happen overnight- there's no cash, but if this is successful there's no reason it can't happen. Personally, I would prefer this concept over the late 90's/early 00's one that's currently the standard.
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Re: Starbucks opening new concept store.

Postby Brett Hanson on Sun Jul 26, 2009 3:35 pm

Marshall wrote:Point taken, Brett, but then why not go, as you mention, with a "Banana Republic" concept? A new name for a new (for them) line of shops, rather than pretending each shop is independent. Doesn't this just invite unnecessary mistrust?

Good question that I don't have an answer to. Here's a few ideas.

(1) Would the allegations of fakery be bigger or smaller if the cafes were called, say, The Original Coffee Co (or "The O.C." for short) and if some secrecy was employed instead of stenciling Starbucks everywhere in the store?
(2) It didn't work for Circadia.
(3) This idea is me ignoring Hanlon's Razor for a moment... What if we're entering a time when launching new national brands just doesn't work? Everything you read says to eat Fresh, Local, Organic, and Seasonal. Starbucks was started almost 4 decades ago and isn't into franchising for good reasons, so trying to open shops that are as local as possible may be the closest they can get without spinning off shops in every city. The pastries, wine, and beer they source can subscribe to the FLOS, so can the coffee and teas (except for the L, but that's the same for everyone here... except maybe Edwin), but at the end of the day Starbucks isn't going to put management (aka "pricey overhead") in every market.
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby Gary McGann on Mon Jul 27, 2009 6:12 am

It would have been great to be a fly on the wall at that board meeting -'if we dont have the Starbucks name and the press find out they will accuse us of misleading the public etc etc -why not inspired by Starbucks!!!!!!' -that will work!

FYI -I see there headline beer is Stella Artois -used to be premium in the UK but now commonly referred to as wifebeater due to its ABV!
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby Luke Shaffer on Mon Jul 27, 2009 4:53 pm

Not going to bash Starbucks, in fact I think their choice of name is perfect 8)

We changed up our business 2 years ago today*. We wanted our name to say a few things about us:

1. we're local, not a chain
2. we sell coffee and tea, anything else is "extra"
3. we aren't pretentious
4. we let our product speak for itself (all the good and fancy stuff is inside)
5. we aren't a restaurant

In addition, we chose to spell the name with numbers rather than letters, so that it would sort out first alphabetically... and it makes it pretty darned difficult to mispronounce since it's ENGLISH.

It's worked out very well on all counts, and if Starbucks decides to move in next door I want to get paid :roll:

* today is the anniversary of our final plumbing inspection on our remodeled store, we've been in business since early '06.
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby Alistair Durie on Tue Jul 28, 2009 1:38 am

http://slog.thestranger.com/slog/archiv ... protesters

"Four protesters on the sidewalk outside 15th Avenue Coffee and Tea Inspired By Starbucks are welcoming passersby and shouting, “Grand opening! Capitol Hill’s first local coffeeshop!” Asked who organized their protest and where they’re from, they’re adamantly refusing to break character. “We’re just in the neighborhood and wanted to come out and support our first local coffeeshop,” Faux-Barista-With-Balloons said."
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby zacharycarlsen on Wed Jul 29, 2009 12:13 pm

I can't believe that Nick Cho's April Fools Day joke came true!

Linda Derschang's not too happy about the design of the store.

Have you seen the color of the new Starbucks on 15th? Noticed the salvaged wood wall outside which is the same as my salvaged wood planter box in front of Smith? Poke your head in and check out the salvaged wood frames on the walls, the vintage industrial light fixtures, and the old wooden seats. A friend asked me yesterday if I was opening a coffee shop next to Smith because it looked so similar—like a sister business. I was in there yesterday to see it. I asked the designer if she had ever been to Oddfellows [also by Derschang], and she said "Yes, of course." They have been in Smith almost daily.


http://slog.thestranger.com/slog/archiv ... -starbucks
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby zacharycarlsen on Thu Jul 30, 2009 10:57 am

:) i feel much better about this whole business. nick's piece in the post is wonderful.

bethany jean clement at the stranger blog also wrote a thoughtful post and links to harvard business blogger peter merholz, who thinks 15th Avenue Coffee is doomed to fail.

http://slog.thestranger.com/slog/archiv ... cks-doomed
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby JavaJ on Thu Jul 30, 2009 4:29 pm

Perhaps Starbucks would be willing to come to San Francisco and copy one of our neighborhood shops? You know, really make themselves part of this crazy community?

http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2009/07/30/violetblue0730.DTL

No?

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Re: 15th Avenue Coffee and Tea by Starbucks

Postby zacharycarlsen on Thu Jul 30, 2009 9:38 pm

Maybe they'll realize the real money is in sexy bikini drive-thru espresso stands?

http://www.kgw.com/news-local/stories/k ... 6873d.html
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby Alan Frew on Mon Aug 03, 2009 12:56 am

I can't believe how many of you supposedly business savvy guys have missed the main point. Starbucks has opened up a Bar. They serve alcohol. If you think the profits on coffee are insane, just wait and see how much they make on the grog. Not to mention the potential for signature cocktails, shooters, the whole gamut of teensy amounts of cheap alcohol served expensively in fancy glasses with crushed ice.

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Re: 15th Avenue Coffee and Tea by Starbucks

Postby zacharycarlsen on Mon Aug 03, 2009 6:45 am

Alan, they only serve the beer. This is also true at Vivace and Victrola.

I'd never seen the 15th Avenue Coffee & Tea web site, which doesn't say "Inspired by Starbucks" anywhere.

I was also surprised by the elevation/washing process information for all of their coffee...

http://www.streetlevelcoffee.com/
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Re: 15th Avenue Coffee and Tea by Starbucks

Postby geir oglend on Mon Aug 03, 2009 3:34 pm

I remember back when Starbuck first came to town and me and most of us small coffeebar operators was shitting our pants thinking it was all over.
There was also a time when I wished I was more like them but resisted and now it's them trying to be more like us, what's with that?
About us, on their webpage is a little ambiguous leaving out the "megacorpstatus".
I still thank them for getting people willing to part with 5 buck for a cup of coffee.
Good luck "green"
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