Starbucks Chairman Fears Tradition Is Fading

The last thing that Starbucks wants is watered-down coffee.

It may not have that. But in a passionate internal memorandum to Starbucks executives, the company chairman said that a drive for efficiency has led to a watering down of the Starbucks experience.

Rapid expansion, the chairman, Howard Schultz, said, has led to a commoditization of our brand that makes the company more vulnerable to competitors. Specifically, he cited several decisions that, he said, may have been right at the time, but which, in retrospect, have led to a dilution of the coffeehouse experience that he wanted to foster.

The memorandum was sent on Feb. 14, and first appeared on the Web site starbucksgossip.com. It also reflects one issue that Mr. Schultz has identified over the years — the delicate balance between expanding into a global brand while maintaining the intimate communal experience that led to success.

A Starbucks spokeswoman, Valerie ONeil, confirmed the memorandum and said yesterday that it reflected that we are mindful of our responsibility to do better.

Among the questionable decisions cited by Mr. Schultz is the use of automatic espresso machines. The machines made service faster but removed much of the romance and theater of watching baristas making coffee by hand, he said.

Similarly, flavor-locked packaging has led to the loss of aroma, which Mr. Schultz said was perhaps the most powerful nonverbal signal we had in our stores.

Instead, as the company grew to 13,000 from 1,000 stores and began to operate on a bigger scale, Starbucks shops no longer have the soul of the past, and reflect a chain of stores vs. the warm feeling of a neighborhood store, he said.

The memorandum from Mr. Schultz did evoke a passion for coffee — and the coffee drinking experience that he said was now missing. He wrote of the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, a change that is stripping the store of tradition and our heritage.

Mr. Schultz says he takes full responsibility for many of these decisions, and his memorandum lists areas where he believes Starbucks has fallen short. But the memorandum does not outline what he plans to do about the problems he identified.

Still, he spoke about the need to change with the same passion that he uses to describe the making of coffee: We desperately need to look into the mirror and realize its time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience.

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