Why Starbucks shouldn't bother selling hot breakfast food

Hot food is bound to complicate in-store operations, potentially leading to mistakes and unhappy customers, writes Brian Gorman. It'll hurt the Starbucks brand, too, he says. "I just don't think Starbucks should want to be seen as McDonald's competitor -- but by offering a hearty bacon-and-egg breakfast, that seems to be where the company is drifting." Analyst Linda Bannister agrees. She says: "McDonald's is moving more upscale and Starbucks is moving more downscale." (Motley Fool)

Comments

[padner]

1) the hot sandwich variety offered at starbucks is nothing like the "fake-plastic-egg" mcmuffin currently offered at mcdonalds. i've had the experience of both.

2) starbucks has already been compared to mcdonalds twenty times over and then some. it's old news.

3) a large majority of starbucks customers are unhappy no matter what (yet they continue to patronize). having added hot sandwiches is not going to make any world of difference as far as that goes.

[matthew]

those are much better than anything mcdonalds offers for breakfast.

at least it's not a meatnormous sandwich, lol... when starbucks does a partnership with the (burger) king, then i'll be worried.

[ROXIE]

Ugh. So - the first thing you smell when you walk into a COFFEE shop is EGGS? Puke. I thought this is what Howard Shultz was so against in his book....

Well, the good new is that the program is being scrapped. Too expensive and not a very big demand for it. Thank you god.

There's already too much superfluous crap that has nothing to do with coffee at "Starbucks Coffee". If I want meals/toys/CDs/games, I'll shop where those things are offered exclusively and in substantial variety.

[Lauren]

First off, Cranium rocks, I'd buy it no matter what store it was sitting in. Second, I can't imagine working bar and having to run and make eggs or something for a few minutes. Starbucks is so concentrated on quality that I'd probably have to whisk and fry them fresh -- at which point why not pay me to come over and make breakfast in your bed? I remember one of the biggest hitches being that most states would then require a food permit that allowed cooking (that's why we can't toast bagels). Still, adieu eggy breakfast thing, you were sure to be a failure.

[cheese please]

Oh no, Starbucks is going to smell like burned toast! :-P

Instead, Starbucks could expand their cold case, to offer more savory nibbles. I often feel like having something with my coffee besides a ginormous low-fat muffin. And their bagels are awful. Ugh.

For instance, I love the cheese and fruit tray, but it's always the same mix, and sometimes it's too much to eat or pay.

Maybe some lighter half-sandwiches? Smaller cheese samplers? Nuts? Olives? Bread samplers with spreads? Things that aren't sweet, can satiate until the next meal, go well with coffee/tea, and aren't extra work for the baristas.

[Carole]

If this program has been canned, I'm glad. While I agree, the comparison to McDonald's has long been made, over the last year or two, Starbucks HAS been downgrading its baked goods from fresh artisan to frozen. This is a travesty in and of itself.

[deusx]

Point made Carole. Heh. But, you are wrong. There hasn't been a concentrated effort over the past year or so to "downgrade" pastries. Most Starbucks have always recieved their pasteries pre-made then frozen. Very few stores are close enough to the contracted vendor to recieve them any other way.
There is no quality degradation. In fact, a muffin that was baked, flash frozen and then only thawed hours before you ate it is going to be better quality than a muffin that was baked, shipped to the store fresh and sat in a cooler for two or three days.

[Drinker]

Try getting the godawful pastries right first. Try a real, fresh-baked croissant or morning bun (or beignet) at Cafe Fanny in Berkeley and you will never, ever be able to go back to Starbucks pastries without major suffering.

On the other hand, they can't seem to brew a decent espresso. It's the immutable law of coffee shops: good coffee or good pastires, pick one. For this reason, don't have much enthusiasm for the greasebreakfasts.

It's not being scrapped

[Ace]

My view: having been to many Starbucks in a recent trip to London, where they all see pannini sandwiches, the smell of cooked food is often a real drawback. Best stick with already-prepared food rather than the miasma of odors from a variety of hot items.

hilarious
as far as i know, starbucks is not allowed to even toast bagels or make their own food in the actual stores because of health licensing issues. hopefully at least the store manager is a licensed food manager in all the stores, but I have no idea. If they start serving actual food at the establishments they are opening up a huge and unforgiving book of food handling procedure. all of the partners will need foodhandling certification. in addition, there will always have to be one licensed food manager on at all times. (depending on the state the store is in)

the food will have to be premade and shipped in frozen for starters. that sounds appetizing already, but it will be prepared by someone with almost no food handling/preparation experience (steaming milk does not count). They will probably use bread grills or heat them up in batches in ovens.

I can't wait to see what this does to ticket times. it will be awesome.

the company is just looking at the top line and trying to raise that (this dumb hot food program) instead of consolidating what it already has (getting better quality food of the variety it already has).

it will raise their food sales a few points, maybe even raise it alot, but it will cause countless problems. tons of waste in food, longer waits for customers, tons of money for new equipment, money on training employees,
awful awful gross margin on premade breakfast sandwiches (even at 3 dollars a piece haha), and overall a greasier, stinkier atmosphere for the coffeehouse.

the best part is they will hail it as a success when it does raise their top line sales and not see all the stupidity it causes.

if they wanted to do hot food they maybe could have just done bagels. bagels freeze remarkably well in the proofing stage and even in the par-boiled and fully cooked stage. they could have a good amount of different bagels and different cream cheeses. the training would be alot simpler, the gross margin alot better, and best of all it would be alot harder to screw up.

[deusx]

In most states employees are not required to have a "food handling liscence". That sounds primarily Canadian to me.
I agree though, cooked food at Bucks is a terrible idea. I can't wear a tasteful amount of cologne or use scented soap because the smell will interfere with the coffee smell; but sausage aroma is ok? Also the quality will suffer, the food will have to come frozen there is no way around that. It just blows my mind, as small as alot of starbucks are, that the greedy corporate piggies think they can cram the necessary storage and preparation equipment into an already crowded area.

[MGR]

Supposedly one of the ovens that Starbucks is testing specifically has a ventilation sysytem so that you cannot smell anything that's cooking. And as with most newfangled things, i.e., the new CBS, I doubt they will attempt cram it into older smaller stores- just large old ones and all new stores. (new stores get all the cool stuff....I'm jealous)

[Anna]

As a manager of one of the stores I can tell you that we don't cook food but we warm it! The program is also called "warming program".
* Yes, all the managers (assistents and shift supervisors), at least in Maryland, have to have a valid food licence.
* The breakfast sandwiches come refrigerated every morning and discarded every evening if they don't sell.
* Starbucks does not focus on breakfast sandwiches as the main "money maker" but it considers it a convenience for our customers who don't have time to eat at home or go to McDonalds.
* As far as we were told at our last Mid-Atlantic zone meeting, at some points all stores will have the warming program, so it is not going anywhere.
* Our main product will still remain the COFFEE. Only a few people can tell that we don't do that one right (get a cup of coffee, check our stock chart for past ten years (SBUX) and get some shares fast!!!).

[Carole]

In areas where FRESH pastries (like Northern California) are available and have been traditionally served by Starbucks, they have been replacing it more and more with frozen baked goods. Yes, it's true in areas where fresh is not available those poor folks have only been served frozen. There is a difference in taste and quality between fresh and frozen. Even in the look.

[Boston Starbucks Rebel]

Here in New England, the regional pastry distrubtion is located in Boston. Since most points in New England are accessible from Boston within about 3 hours, most pastries are shipped during the early morning to most locations. Most pastries are not frozen. In fact, many of the pastries sold in the New England have to be stored at room temperature, not frozen or even refrigerated.

Yeah the difference in my opinion between fresh and frozen.

The frozen is better in some cases and worse in others.

Our Regional Food Specialist says that the program is not going well. It won't ever go live for most states. CA, Or and most of the west coast will never get to see them.

[MGR]

That's unfortunate. It's on the calendar for March here.

[Tully's Fan]

The coffee at starbucks is OK (never thought I'd say that did you?). But what makes Tully's better is the sweets.

Trust me. Nothing at starbucks can compete with a Tully's English Toffee Cookie.

Starbucks: 0 Tully's: 1

[Drinker]

What I don't get: why go to all this trouble to sell a very low margin item? You don't make much money selling an egg sandwich for a few bucks, the costs (staff time and raw materials) are quite high compared to a $5 espresso drink. One of the great things about caffeine is that it is an appetite supressant.

Too bad the coffee at Tullys is undrinkable. I've been a a total of 4 of their stores and each time the coffee has been wretched. Their sweets are ok, but a coffee shop needs to have good coffee.

Starbucks: 1 Tullys: 0

[msuspartan1981]

Not sure, I understand the issue of food aromas. If *$$ mamagement was concerned about ti, one would not have to walk through a gauntlet of smokers sitting on outdoor patios 5 feet from the doow when entering, exiting, or simply being present when anyone else enters or exits.

Margin on anything with eggs is HUGE.

How much does an egg cost a consumer in a store, full retail. Less than 10 cents.

How much are they selling a piece of bread, cheese and an egg for. 3.50. That is a helluva margin.

Having run a restaurant that did Bfast, lunch and dinner. The margins on breakfast were 2-3 times that of almost everything else in the restaurant. Flour milk eggs and sugar. Those 4 things are cheap and everything in bfast can be made mostly from those.

yes, eggs are cheap. but, starbucks is getting these sandwiches premade (possibly by another company) and shipped there (which is also expensive). factor in the higher amounts of waste associated with premade food and the general amount of inexperience of the baristas with food handling and you will have a very low gross margin.

my two cents:

visited seattle a few times (where the warming program exists) and work in the so cal market.

IMHO, the breakfast sandwiches I tried in Seattle are AWESOME... much MUCH better quality than any other quick service breakfast sandwiches out there. I'm not worried about looking more "downscale" because sBux really did a great job using quality ingredients. there is sausage and egg with mild cheddar, eggs florentine; ham, egg and cheese; pepper bacon, egg and cheese; sundried tomato, basil and cheese; and three-pepper cheese and egg. did I miss any? I'm really excited that the program is on. I can EASILY sell these products.

This also means we will finally be able to toast bagels and croissants. This is a complaint I hear about EVERY day.

Our focus will always be COFFEE. The point is to offer a convenience not available right now... so many people are running late to work and choose to only stop in a sbux... they're already buying pastries, and thinking ahead and buying sandwiches for lunch...

sandwiches are shipped by the same distributor that already delivers milk, sandwiches and fresh (not frozen) pastries every morning. we're already paying for deliveries every day... the sandwiches are prepared off site and cost a little under 3 bucks. The gross margin isn't bad. A good manager would watch their sandwich sales closely to minimize waste from pre-made food. As managers, we already practice this with our lunch sandwich program. It's real easy to keep in line.

Yes, health licensing may have to change due to the warming process. Every sbux I've worked in had at least two people cerified as food handlers (as many as 4 people in one store I've worked at were certified). As a manager, I know my team would abide by health rules as they already do. Minimal training needed for baristas, many of which were hired due to experience at other quick service food locations. Think about it!

[melina1]

after this last comment, i'd at least give it a try if it comes to the north san diego market next spring.

I tried one of the breakfast sandwiches in Seattle last year during the Leadership Confrence. I liked it.

[Drinker]

Yes breakfast has big margins compared with, say, lunch. But not compared to coffee. A Starbucks drink is hot water, coffee grounds, milk. I don't think eggs and sausage will ever be cheap enough to compete with that.

[NY ASM]

The food program is not doing poorly, actually, from what I hear. It's doing fantastic. It's supposed to roll-out to all stores (within reason) within the next couple of years. I know here in NY it's not coming this fiscal year (which just started), so it's a whiiiile off.

[jjm]

In LA I would go to starbucks for lunch at least 3 times a week- they have great fresh sandwiches and I didn't have to wait in line at Subway and describe what I wanted. Most times I didn't get coffee at lunch.

I am in Boise now and the lunch sandwiches are awful, but the breakfast sandwiches are good. Since they are just microwaved there is no smell in the store. Hope they keep them and get some decent lunch sandwiches.

[-m]

Los Angeles county will never be able to do the breakfast program do to health-code regulations.

can you elaborate further on that?

ACE....Really, you should take a real look at what Starbucks does as a company. I have been in the restaurant/retail business for 18 years and am impressed with Starbucks COMMITTMENT to quality, service, and community.....while never denying that we are in business to make a profit. Of course we try to increse top line sales and bring as much through to the bottom. We understand that we are a business and that a successful business is a profitable one....But rest assured ACE, we are a company that is serious about making substantial contributions to the communities we operate in and to providing quality products that our customers will enjoy.

PLEASE....Send in your comments....our company actually listens....Don't try to make us out to be some kind of "bad guy" simply because we recognize that profitability is essential to our success.

BY THE WAY, all of our stores adhere to health and food service standards that are frequently higher than the legal requirements....All of our parters are required to have food handlers cards and each store holds a food license.....

Actually, not all partners are required to have a food handlers card. Only partners in states that offer/require special food handlers certification get a card. The card is pretty much useless for someone who works in a coffeeshop. The test is mostly about working with un-cooked meat and various cooking temps.

no, the food handling card is essential to anyone who handles food.
they need to know why everything must be stored 6" above the floor (so that you can clean under it).

they need to know that foodborne illness is caused most frequently by temperature abuse. (stores that carry sandwiches and breakfast sandwiches need to be very aware of the temperature in the refrigerators).

they also need to know that improper handwashing is the other most frequent cause of foodborne illness.

please don't detract from the importance of proper food handling because they don't make any real food themselves.

on a side note, every single starbucks i have ever been to is shitty about handling their steam pitchers. i always see crusted milk in empty pitchers on bar counters that are used again immediately. i also never see enough handwashing, especially after cash handling. anytime someone handles cash and then thinks they are going to make a drink without washing their hands they are in the wrong.

and they are right, all partners do not have the card, and most of the stores are not aggressive about food safety. i have been in the restaurant business myself and have also been to many many starbucks and have seen what goes on.

You seem to miss the point. Food handelers cards ARE NOT AVAILABLE in most states. There is no certification or anything like that. Starbucks standards are good ensure food safety...if they are followed.

look don't get mad at me because your coworkers arent handling food the right way

I'm not mad. I am just trying to get you to understand that not all partners recieve state mandated food safety training.

[doppio]

The warming program has been great for our store. The customers love the quality and convenience of the five breakfast sandwiches, as well as our ability to toast bagels, croissants, donuts... even the chocolate chunk cookies taste phenomenal out of the oven! At our region-wide roll out event last spring, many of the issues raised here were addressed. From experience, the aroma is not very noticable, unless the oven is not kept clean. Secondly, with proper deployment the average wait time does not increase that much-- the only time we run into problems is when several different warmed items are ordered at the same time (ie. a toasted bagel, bacon sandwich, and a cheese croissant all in quick succession). Third, most customers see this as fitting the Starbucks brand and experience. Again, it's about quality and convenience, served in legendary ways. Our region has also been running a warmed lunch sandwich test for the past two months, that _is_ getting scrapped this week. Also, re: food safety, I think the laws vary by locality. I know that here, law requires a certified food safety professional be on duty at all times, regardless of if we have warming. The way this works in practice is that the ss, asm, and sm are all certified.

As for being certified as "food handler", I'd like to know how many people are as careful at home when handling food as we are in restaraunts? I guarantee you not very many. Yet, we seem to get blamed for every upset stomach and bought of diarrhea in the country. No one washes their hands as often as people in the service industry. Do you think I like touching your dirty napkins and silverware?

And just for the record, Starbucks does not microwave anything! We use a a nifty little gadget called a "convection oven". It's like a pressure cooker for baked goods. They are awesome, give you quality like a regular oven and conserve energy. Many people have these in their homes, like myself and would cringe at the thought of them being compared to a microwave. Starbucks wins on quality....AGAIN.

yes, having a convection oven makes you eligible win food service quality awards.

right now, your hot sandwich/breakfast program is a fun distraction. there is nothing special about popping something someone else made for you in an oven. you are pretty much ineligible for the quality award when someone else makes the food for you. that is the whole point. this is a fresher equivalent of someone buying frozen pre-made sandwiches in the grocery store.

the idea of such a sandwich being sold for upwards of 3 dollars is pretty funny. you are basically competing with yourself here. do you understand that? there are not many people who stop at starbucks for coffee and then go to another fast food place for food. not very many people have time to do that. since there is really no other savory item in the pastry case full of pre-made desserts, muffins, and sweets, the sandwiches will win hands-down if someone is in the mood for real food.

and by the way, comparing them to mcdonalds and saying how way better they are, isnt setting the bar very high.

[michael]

hi:

i worked for starbucks and had a problem with a new store manager. i confronted him about some issues which would have technically got him fired. i had hoped this would improve his business practices, but instead he ran me out. now my question is and i would like some hard core evidence in a response, i was place on suspension @ 7:30 am on aug 23rd. @ 8:30 am on the 23rd i emailed the district manager and told her i am resigning. now note: i am still employed, but just suspensed.

on the 25th of august, she sends me an email stating she refuses to accept my resignation.

on the 25th of august she wants to know where she can send my last check.

i dont receive any check for almost 2 weeks.

is my resignation valid. i resigned while employeed but on suspension. i did it immediately after i was informed of the suspension.

give me some facts that are based on facts. and weblinks to any information would be nice.

just call the "standards of business conduct" help-line.

[-m]

Call your regional PRM. Or call your DM directly. There is something fishy about this whole thing. Starbucks has a pollicy that states that employyes are never to be suspended. Your last paycheck needs to be given to you on the day you are terminated.
If your story is true, your store managers job is in serious trouble.

[B&N CafeGirl]

If you don't already have the warming program at your store, just drop into a Barnes & Noble Cafe around lunch time to see how crazy adding a warm food line to your operation can get.

In addition to our larger-than-Starbucks selection of pastries, we carry sandwiches that are flash frozen and most are meant to go on a sandwich warmer for 4 minutes. We also serve soup every day.

We are expected to maintain service standards of 2-3 minutes for a person entering the line and receiving their drink *REGARDLESS* of what is ordered or what orders are in front of them. And remember, we are still part of the bookstore so we are *REQUIRED* to ring up *ALL* purchases. Huge stack of books and they want drinks for the whole family, oh and a few sandwiches and pastries and how about this CD and these magazines and a couple bags of coffee and a mug, etc, etc. This happens more often than you would expect. More than once a day we express envy over Starbucks streamlined & focused approach to their product line.

[sharon]

What is THAT dreadful smell in ALL Starbucks? After I eat the muffins/danish, my friends an I agree ... we burp that TASTE or SMELL all afternoon! What ARE they putting in the pastries?? It's frightening!

[Britany]

The pastries at the Starbucks I work at (Daly City, about 5 min from San Francisco) aren't frozen. They are delivered fresh very, very early in the morning. AM pastries are replaced with the PM pastries around noon.

Although I hardly ever eat the pastries becasue I'm convinced they could make you gain 20 pounds in a few weeks, the few that I have had were very yummy and fresh tasting.