Starbucks is pursuing the wrong target market


My dad is 61 and he loves coffee; I credit his tastes for converting me to a coffee drinker as a high school junior. When he inherited a comfortable trust fund from my grandpa last year, the first thing he bought was an expensive coffee maker. Into which he (much to the horror of my sisters and brothers-in-law) spoons Folgers coffee grounds. After all: they're cheaper, and old habits die hard.

I shake my head at him, and my husband's grandmother, who profess to love coffee but can never be found at Starbucks. My dad's frugal, and my grandma-in-law subscribes to the "Starbucks tastes burnt!" school of coffee drinkers. She'd much prefer instant crystals, which she'll serve when church friends come to visit her brother for brunch.

It is these two unlikely consumers, and scores more like them, that Starbucks Corp. (NASDAQ: SBUX) is now targeting. The recent announcements by CEO Howard Schultz confound employees as well as analysts, leaving coffee investors wondering if caffeine is, indeed, a brain-altering drug, and if Schultz has had one 'Venti' too many.

Originally published