Expensive Divorce: Starbucks & Kraft Foods by guest blogger Cedric Littman

November 26 2013

Recently Starbucks had to pay Kraft Foods a huge settlement. The agreement was for Kraft to distribute Starbucks packaged coffee beans into the supermarket supply chain, while Starbucks alleged that Kraft had underperformed despite Kraft increasing sales tenfold.

Kraft is a huge food manufacturer with hundreds of brands delivering consistent mediocrity who, as their recent take-over of chocolate maker Cadburys shows, puts efficiency before ethics. If we compare the Starbucks and Kraft brands, what would we think? We think of Starbucks as a modern company delivering an excellent coffee experience in its welcoming shops where customers are warmly greeted. Starbucks is also known for its ethical business practices and treatment, having switched over completely to fair trade coffee and tea, promoting actively from within and providing medical coverage to all workers, even part-timers, so that the impression is of a circle where employees, suppliers, and customers are well treated.


by Ryan Gustafson

This prompts the question “is Starbucks is not managing its brand properly?” While presenting itself as a friendly company with high principles, it employed Kraft who seek value by delivering mediocrity at the expense of quality. Starbucks was disappointed Kraft had not increased its supermarket sales, wanting them to push hard into a market where staff are not well treated and small brands are at a disadvantage.

We think of Starbucks as highly principled and enjoyable. Can we draw any conclusions from Starbucks choosing Kraft as distributor of its “ethically produced” coffees? Starbucks’ behaviour was not in alignment with their brand positioning as they picked a corporate partner not known for their integrity, and then was angry with Kraft when profits were less than anticipated. It was a weird marriage to begin with, and ended in an expensive divorce.

Tags: , , ,

A Bigger Interview At Hasselblad Bron's Shoot NYC 2013

November 14 2013

Beth Taubner ShootNYC 2013 from Hasselblad Bron Inc. on Vimeo.

Beth in action (wearing pearls) talks about branding and marketing at this years ShootNYC.

Tags: , , , ,

Beth to the West

November 08 2013

We're excited to announce that today, November 7th at 11:30am Beth will be presenting Branding 101 | How Does Your Business Become A Brand?

Join us at the Silicon Valley San Jose Chamber of Commerce and learn how to use branding to expand your market share!

Click here for more information, and click here to register.

Tags: ,

Month List