Starbucks' Boldly Caffeinated European Offensive


If a rolling stone gathers no moss, Starbucks (NAS: SBUX) must be moss-free down to the steam wands and frothing cups on its espresso machines. The company just doesn't slow down. Its latest deal is in Europe, where the American-born-and-bred latte maker just inked a deal with Selecta, the continent's largest vending-services company, to start supplying offices in Switzerland with coffee.

And while it's just a pilot program for the moment, if all goes well Selecta offers entry into more than 100,000 workplaces in Europe, with more than 15,000 in Switzerland alone.

The acid test
"We are always looking for unique ways and places to connect with our customers," says Frank Wubben, Starbucks' managing director for Austria and Switzerland. "Together with Selecta we see a great opportunity to improve the coffee experience in the workplace environment and we look forward to extending the Starbucks Experience to offices across Switzerland."

This is a real acid test for Starbucks: The Swiss, like the Austrians, know and love their coffee, and enjoy nothing more than looking down their noses at American retail food chains while sipping a cup. The good news is that Starbucks really does know coffee. Whether it's a latte, a cappuccino, or a drip brew, CEO Howard Schultz built his company and its products around a particular idea of how good coffee should be made: an Italian idea. Schultz worshipped at the altar of Italian coffee, and crafted his own brews to measure up.

According to the company, Starbucks has been warmly received in Switzerland since it opened its first of 50 cafes there 10 years ago, so the brand does have some alpine cache already: a good head start. And in the statement announcing the deal, Selecta's Thomas Nussbaumer also seems optimistic: "Selecta understands that consumers have changed the way they drink coffee and other hot drinks. We're committed to meeting and exceeding their expectations with a new offering from Starbucks which will bring the best of the coffeehouse to our office customers. We look forward to delivering premium quality Starbucks coffee to our customers."

American efficiency, apparently still valued
Of course, if coffee is already so bloody good in Europe, why should Selecta even use Starbucks? For one thing, there's a strong case to be made that American companies are still the best at delivering consistent quality on a large scale. McDonald's (NYS: MCD) is a perfect case in point. The company has food preparation and delivery down to a science. That's one of the reasons you go to McDonald's: You know that, with regional variations, no matter where you go in the world a Big Mac is a Big Mac, a cheeseburger is a cheeseburger, and the company's world-famous fries are the company's world-famous fries.

Starbucks does this end of the business equally well. Again, with regional variation, the company's signature products remain the company's signature products. Some might complain that this kind of consistency is exactly what's wrong with companies like Starbucks: that the quirkiness, and resulting inconsistency, that comes with quaffing a caffeinated brew at your local, hipster coffee shop keeps life interesting. There's something to be said for that, but there's something to be said for the other side -- boring but delicious consistency -- as well: the side Selecta obviously prefers.

Three more American companies set to dominate the world
So here's to Starbucks' continuing European adventure, and to good old American industrial efficiency. Investors of all sectors, but especially those interested in Starbucks, take happy note of this. And as Starbucks rolls its coffee- and profit-making machine moss-free into the European heartland, learn about three more U.S. companies also on their way to conquering the world in this Motley Fool special free report: "3 American Companies Set to Dominate the World." Download your copy right now by simply clicking here.

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Fool contributor John Grgurich is a regular contributor to The Motley Fool, and to Starbucks, but holds no positions in the latte slinger. Follow John's dispatches from the front lines of capitalism on Twitter @TMFGrgurich.The Motley Fool owns shares of Starbucks and McDonald's. Motley Fool newsletter services have recommended buying shares of McDonald's and Starbucks. Motley Fool newsletter services have recommended writing covered calls on Starbucks.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a positively scintillating disclosure policy.

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