Starbucks and Nestlé become instant enemies

SEATTLE— A billboard above Nickerson Street sends an instant message to consumers; “Starbucks Via” it reads, “Four times our price, a fraction of our flavors.”

Nestlé is calling  Starbucks an overpriced Johnny-come-lately to the $17 billion instant coffee market.

Those are fighting words, but Nestlé has a powerful weapon: Price.

Starbucks Via costs four times more per cup for what is essentially the same instant coffee, claims Nestlé’s new campaign.

Battle in Seattle

Try to find a Seattleite who drinks instant coffee—or admits to it. Starbucks CEO Howard Schultz said part of Via’s mission is “to turn on a whole new set of coffee drinkers to the Starbucks brand.”

So why is Nestlé running its ads here?

“Nestlé wants to bring the battle to Starbucks,” wrote Derrick Daye, a brand consultant with The Blake Project in an e-mail.

Via was launched first in Chicago and Seattle, so by countering the product here, Nestle is playing offense, rather than defense, he said.

Nestle's also playing copycat. The tan billboards with big brown lettering are almost indistinguishable from the new Starbucks ad campaign.

That's a mistake, Daye said. Nestlé introduced the product Starbucks is trying to improve upon, and dominates the market for it.

“The market leader should never act like a follower, he said.

Taste the savings?

Are Taster’s Choice and Via really the same thing?

In a blind taste test conducted at Mind & Money’s secure research facility, testers could tell the difference. Taster’s Choice reminded one taster of  “airline coffee.” Everyone found it weak.

Via had a bolder flavor, but was described as “bitter” and “acidic.”  One tester said he preferred the “watery” Taster’s Choice, but said it was “a lesser or two evils.”

(The coffees tested, for the record: Taster’s Choice Original and Via Columbia.)

Taster’s Choice is cheaper, if you can find it. I located it on my third try, at QFC, where I paid $1.29 for seven packets. One packet makes a 6-oz. cup. Starbucks Via, on the other hand, sells for about $1 a packet, which makes an 8-ounce cup. Via is available at Starbucks stores in Seattle, Chicago, and London.

Coffee game-changer?

Nestlé may be running a risky campaign, but Starbucks is also taking chances with its brand.

Daye believes Via could actually backfire by enticing people to try instant coffee, “only to have them abandon Via for Nestlé’s lower priced alternative.”

In the past I would’ve disagreed, but something happened recently that changed my mind. I was visiting my mom, a longtime coffee connoisseur who’s been hit hard by the economy. I opened the cupboard to discover two cans of Yuban.

After I got past my initial shock, I asked her about it.

“It’s actually good,” she said.

Maybe it is. And maybe, in this economy, cheap coffee is easier to swallow.

Do you drink instant coffee? Have you tried either of these brands? Login or sign up below to post a comment and let us know: