Starbucks, try some artisanal starbright

Coffee shops have evolved into a binary business landscape, with hyperscale models at one end and standalone artisanal cafés at the other. Starbucks got its brew right for a while by providing a ‘global’ standard, both in its cups and outlets. It then went off track with its business strategy. Departure of CEO Laxman Narasimhan after less than two years left a stain on the tablecloth.

Since mid-2024, Starbucks has been trying to return to its core values by simplifying its menu and focusing on delivery times. But that doesn’t fundamentally deviate from its cookie-cutter format. What’s needed is a hot spurt of individualism, something top-notch independent coffee houses have in the beanful. This segment prioritises experiential consumption over on-the-go. Tables spaced at comfortable distances, airy, leafy spaces that are more European cafés than baristas. Even better if those tables are set overlooking an orchard rather than inside a mall.

A business case can be made for branded coffee chains to venture into the artisanal café market, with brands leveraging their strong supply chain linkages across locations. Starbucks built its business by unanchoring prices and strengthening customer connections. Experience offered by artisanal cafés extends this approach to pricing and customer loyalty. Each Starbucks JV outlet can have its unique décor and setting that gives it both brand appeal and muscle memory. Similarly, each place can have its signature coffee only available in that café or bistro. Admittedly, such a model will grow slowly. But it’s viable, as seen in hotel chains optimising revenue through differentiation, often across properties they manage. Starbucks has the added advantage of strong brand recall for both product and service.


Coffee houses will retain their status as the ‘third place’ between home and office, and the experience won’t be limited to a template. The range of activity around sharing coffee is wide, and the ambience must cater to this diversity. Since drinking coffee is a global preoccupation, there is scope for cultural divergence. Service models should adapt accordingly. Which is best achieved by combining global business strength with local insight, hyphenating big biz chops with a wafting ambience.