Starbucks is spending millions of dollars to fix its 'basic' image problem

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Starbucks will go down in history books as the brand that made it OK to charge more than $2 for a cup of coffee. But its reputation as a higher end coffee shop has faded — and that has the company worried.

The chain was founded with the mission of providing premium coffee to the masses, with CEO Howard Schultz modeling locations after Italian espresso bars. Starbucks sought to become the "third place" in your life — after your home and your office — where you'd go to simply hang out and socialize.

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And it arguably did just that. Since it opened its first shop in Seattle in 1971, Starbucks has become ubiquitous, with more than 24,000 stores around the world.

But that ubiquity has started to threaten its upscale reputation. Starbucks is now competing with chains like Dunkin' Donuts and McDonald's. It's gotten, in a sense, too "basic."

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Starbucks locations around the world
A woman walks into a Starbucks Coffee, Monday, Jan. 11, 2016, in New York. (AP Photo/Mark Lennihan)
People walk past the first Starbucks to open in Bogota, Colombia, Wednesday, July 16, 2014. The three-floor coffee house in Bogota is the first of 50 that the Seattle-based company plans to open here in the next five years. (AP Photo/Fernando Vergara)
Baristas Truong Nguyen, left, and Ben Ruthruff, right, talk with customers near a display of special Seattle Seahawks Starbucks cards on Wednesday, Oct. 23, 2013, at a Starbucks store in Seattle. The Seahawks began a one-week fund-raising campaign Wednesday with Starbucks to benefit Seahawks head coach Pete Carroll's A Better Seattle program, which seeks to reach at-risk youth and prevent gang violence. (AP Photo/Ted S. Warren)
Starbucks CEO Howard Schultz poses for the photographer before a press conference in Bangkok, Thailand, Monday, May 13, 2013. Schultz, visiting Bangkok this week to mark the coffee giant's 15 year anniversary of opening in Thailand, said Monday the coffee chain's first stores in India and Vietnam have been received positively and it might soon be time to give Myanmar a shot too. (AP Photo/Sakchai Lalit)
Two customers sit outside a Starbucks vandalized by angry protestors in opposition to Mexico's newly sworn-in president, in Mexico City, Saturday, Dec. 1, 2012. Protests began early Saturday morning with violent confrontations in the streets and protest speeches from opposition parties inside the congress, where Enrique Pena Nieto took the oath of office. Protesters continued vandalizing downtown businesses, smashing plate glass windows and setting office furniture ablaze outside. (AP Photo/Eduardo Verdugo)
Pedestrians walk past a branch of the Starbucks cafe chain in west London, Monday, Dec. 3, 2012. A committee of British lawmakers says the government should "get a grip" and clamp down on multinational corporations that exploit tax laws to move profits generated in Britain to offshore domains.The committee says major multinationals including Starbucks, Google and Amazon are guilty of immoral tax avoidance. Starbucks announced it is reviewing its British tax practices in a bid to restore public trust. (AP Photo/Alastair Grant)
In this photo take Dec. 3, 2010, a Starbucks logo is displayed at a store in Philadelphia. Starbucks Corp. said Wednesday, Jan. 19, 2011, that customers with certain BlackBerry smartphones, iPhones and iPod touch can now use those devices to make purchases at all of its U.S. company-run stores.(AP Photo/Matt Rourke)
In this Feb. 14, 2010 photo, a sign outside a Starbucks hangs over the Riverwalk with the Navarro Street bridge in the background in San Antonio, Texas. Starbucks plans to begin paying a 10-cents-per-share cash dividend to investors.(AP Photo/David Zalubowski)
FILE - This file photo made Nov. 2, 2009, shows a Starbucks coffee shop in Arlington, Mass. Starbucks releases quarterly earnings after the close of the market Wednesday, July 21, 2010. (AP Photo/Elise Amendola, File)
Shown Tuesday, August 11, 2009 is a Starbucks Coffee shop at Adriatrica, a development in McKinney, Texas, designed to look like a Croatian Village.(AP Photo/Donna McWilliam)
A worker cleans the sign outside one of many Starbucks outlets in Beijing Friday April 27, 2007. An Internet campaign was started in January calling for the removal of a Starbucks coffee shop from Beijing's famed Forbidden City. Critics say its presence in the former imperial palace is a smear on China's historical legacy. (AP Photo/Greg Baker)
** FILE ** South Korean tourists queue up to buy coffee at an outlet of Starbucks at the Forbidden City in Beijing, China, in this Thursday, Jan. 18, 2007 file photo. A member of China's legislature has revived calls for the removal of a Starbucks coffee shop from Beijing's Forbidden City, saying its presence was a smear on China's historical legacy, the official Xinhua News Agency reported Sunday March 11, 2007. (AP Photo/Ng Han Guan, File)

Urban Dictionary defines basic as "an adjective used to describe any person, place, activity involving obscenely obvious behavior, dress, action. Unsophisticated. Transparent motives." Describing someone as basic "has come to mean liking the things everyone else likes," Fashionista writes. And that's not necessarily a good thing.

Starbucks is a core basic brand, according to Fashionista, along with the North Face, Lululemon, and Michael Kors. Sweet Starbucks beverages, especially the famous Pumpkin Spice Latte, are most closely associated with the pejorative term.

This is just one of countless Pumpkin Spice Latte posts on social media sporting the hashtag "basic":

Widespread popularity is the "kiss of death for trendy... brands, particularly those positioned in the up-market younger consumer sectors," industry expert Robin Lewis wrote in his blog in 2014.

Lewis was discussing fashion, but the same idea applies to Starbucks. To continue to grow and maintain its coffee-snob approved status, the chain needs to make an active effort to retain its premium reputation.

It's a problem that Starbucks is investing millions of dollars into fixing, by building Roastaries, debuting new menu items, and even creating original content.

Starbucks has said the chain's 15,000 square-foot Roastery in Seattle is a window into the future of the brand.Serving up drinks like the $10 Nitro Cold Brew Float, made with coffee roasted on location, the location is a testament to the coffee giant's willingness to innovate in a constantly changing coffee culture.

Now, the company is opening two new Roasteries in New York and Shanghai, with plans to open as many as 10 of the super-premium locations.

The premium coffee experience of the Roasteries is intended to have the trickle down effect. The chain plans to open roughly 500 Reserve stores, which offers premium Roastery beverages and artisanal Princi food, and 1,500 stores with Reserve bars, which will serve drinks made in a wider variety of styles such as pour-over and siphoning.

Schultz acknowledged customers' concerns at a conference in New York City on Thursday.

"This is our response to the challenges that sometimes come with ubiquity and sometimes come with people saying, because I see a lot of Starbucks around the world, maybe the coffee is not quite the same level," he said. "Our coffee is every bit as good as it was when we had five stores many, many years ago."

While the Roasteries represent the most premium experience, Starbucks' is promoting its more upscale, craft-inspired coffee drinks at stores across the US.

This summer, the chain launched a "Cold Bar," which included the gourmet Nitro Cold Brew, as a way to boost the chain's coffee credibility when it comes to chilled beverages.

The drink followed in the footsteps of beverages such as the Flat White and the Latte Macchiato that similarly draw from what Starbucks calls "coffee-forward" beverages, with roots in craft coffee shop culture. Increasingly, the chain has alternated between sweeter, seasonal beverages and drinks — often developed at the Roastery — that are more clearly intended to keep coffee snobs visiting the chain.

This fall, Starbucks balanced out the start of Pumpkin Spice Latte season in an unprecedented manner.

On Wednesday, one day after the official launch of the PSL, Starbucks unveiled an original content series called "Upstanders." The series highlights 10 individuals across the US working to make a difference in their communities.

It also bolsters Starbucks' image as a values-based organization.

"I always feel strongly, and I have for almost 40 years, that anything we do that makes our own people proud is good for Starbucks," Schultz told Business Insider. "And I think with almost 200,000 Starbucks people working in the US, I feel very strongly they'll feel very proud of these stories and the fact that we've taken the time to invest, to share this."

While there is no Starbucks' branding on the series, which cost millions of dollars to create and promote, it is clear that Schulz is taking his inspiration from the intellectual Italian espresso bars that guided the coffee giant's early days. The values-heavy series may be well-intentioned (Schultz says there's no PR angle), but it's also a way to build up Starbucks' cultural relevancy — and distance it from any "basic" stereotypes.

NOW WATCH: Starbucks is hoping this new fall drink will be their next Pumpkin Spice Latte

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