NZ Herald
  • Home
  • Latest news
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather forecasts

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
    • The Great NZ Road Trip
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
    • Cooking the Books
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • What the Actual
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Economy

Kiwi snobs won't stop Starbucks' domination

By Nathan Field
NZ Herald·
24 Jan, 2011 04:30 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

In 2007-2008 the stock price dropped from US$39 to less than US$10 ($51 to $13). Photo / Filephoto

In 2007-2008 the stock price dropped from US$39 to less than US$10 ($51 to $13). Photo / Filephoto

Back in 2006, Starbucks was well on track in its plot for world domination. Sales were booming, the stock price was making fresh highs on a weekly basis, and the company had just announced plans to triple its 12,000 stores worldwide.

Shareholders were grinning. The rest of us were deeply afraid.

But the company's grand plans came off the rails. Starbucks expanded too quickly, saturating the market with its pale wood furniture and caramel frappuccinos. When the 2007-08 recession came along, Starbucks was forced to close hundreds of underperforming stores.

Shareholder grins froze as the stock price dropped from US$39 to less than US$10 ($51 to $13).

A lot of people were quite smug about Starbucks' fall from grace. Despite its ubiquitous presence, Starbucks has always been sneered at by certain sections of the public, even more so than other multinational chains like McDonald's or KFC.

Anti-Starbucks sentiment is especially prevalent in New Zealand, where the brand has never really taken off. In certain parts of Wellington, walking around with a Starbucks cup will attract dirtier looks than if you were wearing a baby seal overcoat.

Restaurant Brands, owner of the Starbucks New Zealand franchise since 1998, has understandably had enough. The company has made no secret of its desire to offload its 38 Starbucks stores.

A reason New Zealand has never embraced Starbucks is that we are a nation of shameless coffee snobs. Twenty years ago, we considered it the height of sophistication to add a dollop of clotted cream to a mug of drip coffee.

An upmarket brew was Greggs Red Ribbon Roast. But now, in cosmopolitan 2011, we turn our noses up at anything less than espresso.

We're hardly true aficionados like the Italians or the French. In fact, given the popularity of flat whites and lattes in New Zealand, it's not clear whether we've developed a genuine taste for espresso, or we've simply found a socially acceptable way to drink lots of warm, frothy milk. Dairy is in our DNA, after all.

But regardless of the underlying motives, Kiwis are now very particular about their caffeinated milkshakes.

This should have played into Starbucks hands. The company was serving up espresso long before Kiwis even knew what the word meant.

Its menu leans toward the Anglo-Saxon preference for coffee drowned in milk. And despite reports to the contrary, the quality of the beans is actually pretty good. But it's probably not the coffee that Kiwis find objectionable. It's the whole Starbucks image. The corporate vibe. It's just not cool. We like our trim flat whites to be served by tattooed hipsters and surly short-film actresses, ideally from windswept coffee carts. It makes us feel edgy; less predictably suburban.

By contrast, Starbucks stores are laid back and comfortable. Dido is usually playing in the background. The customers look as if they're dressed for golf. And the baristas could just as easily be working for a bank.

In other words, Starbucks stores are a little too close to our humdrum, middle class lives.

But here's a newsflash: the Seattle-based Starbucks doesn't give a white chocolate mocha about New Zealand's coffeehouse snobbery. It wants the big markets: the Americas, Western Europe, and the mother of all growth opportunities, Asia.

So far, the sales numbers in India and China are encouraging. Other nationalities, it seems, do not have the same hang-ups about Starbucks that Kiwis do. The market has taken note.

Starbucks' share price recently recovered to US$33 on the back of a turnaround in US sales and signs that its emerging markets strategy is reaching an inflection point. Based on its current sales momentum, Starbucks should deliver 20 per cent earnings growth this year (even with sharply higher coffee prices). Bullish analysts believe this level of growth can be sustained well into the future.

To signal the next phase of its master plan, Starbucks has unveiled a new logo - dropping the corporate name and enlarging the wavy-haired siren with the Mona Lisa smile. It's a bold move, giving Starbucks the freedom and flexibility to think beyond just coffee. Their words, not mine. Maybe we should all be afraid again.

Nathan Field is a senior equity analyst at Gareth Morgan Investments.

Discover more

Companies

Aussie franchisor buys Esquires

31 Dec 04:30 PM
Retail

Woolies still keen on Red Sheds

24 Jan 04:30 PM
Business

Restaurant Brands sales hit by store closures

30 May 10:28 PM
Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Economy

Premium
Stock takes

Stock Takes: Will reporting season see the end of a bear market?

08 May 09:00 PM
Premium
Opinion

Matthew Hooton: Desperate times call for bold measures

08 May 05:00 PM
Energy

'Like a Band-Aid': Methanex deal highlights energy supply challenges

08 May 05:44 AM

One tiny baby’s fight to survive

sponsored
Advertisement
Advertise with NZME.

Latest from Economy

Premium
Stock Takes: Will reporting season see the end of a bear market?

Stock Takes: Will reporting season see the end of a bear market?

08 May 09:00 PM

Fisher and Paykel Healthcare will be the main event when it reports on May 28.

Premium
Matthew Hooton: Desperate times call for bold measures

Matthew Hooton: Desperate times call for bold measures

08 May 05:00 PM
'Like a Band-Aid': Methanex deal highlights energy supply challenges

'Like a Band-Aid': Methanex deal highlights energy supply challenges

08 May 05:44 AM
Premium
NZ banks face repaying $9.2b in cheap Covid loans in coming months

NZ banks face repaying $9.2b in cheap Covid loans in coming months

07 May 09:00 PM
Connected workers are safer workers 
sponsored

Connected workers are safer workers 

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP