Friday, May 30, 2008

Will Starbucks be a hit in Argentina?

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The million dollar question—will Starbucks be successful in Argentina? The short answer after today is yes.

As you saw in my previous post, the temptation and curiosity were just too much to keep me away. My daughter was upset when she found out that I had gone to Starbucks without her. So I loaded up the family in a cab and headed over to Alto Palermo to treat them to TGI Fridays (right next door) and to let my daughter get her mocha fix.

When I arrived this morning around 9:00 about an hour after they opened, the line was out the door and to the steps at the corner of Arenales and Col Diaz. It was over a 30 minute wait.

When I went back this afternoon with my daughter the line was longer. It was snaking up the sidewalk of Ave. Col Diez. It stayed like that the whole time were eating lunch. After lunch, my daughter waited in that line for over an hour. For a mocha!

Was it worth it?, I asked her. Yes I would wait an hour for another one!, was the reply.

But what about Porteños? Will they stand in line for Coffee or demand that it be brought to them at the there table from mozos wearing bowties like in all the other cafés here?

When Mike and I were standing in line this morning, the whole line was made up of university kids from UBA and University of Palermo. The few older well dressed porteños would pop there head in and try to find a table, see that there was no mozo service, and then turn around and walk off.

It was much the same this afternoon. The older porteños were not having any part of it. Mainly, because of the hour long line. In fact, this afternoon the line was made up of 75% teenage girls just out of school. The one thing that is clear, Starbucks is going to be a hit with the 25 and under crowd. This ain't their father's kind of café.

I think the older crowd is still going to prefer the traditional Argentina café service. They will not wait in a line. They want to sit down at a table, have the coffee brought to them with the soda water and the small plate of cookies. And they certainly won't want to drink it out of a paper cup!

However, there was another demographic that was clearly present at Starbucks this morning. You know the type. They are the equivalent of our soccer moms back home. Except these women dress their kids in nothing but Gap clothes. The ones with the Gap logos printed real big on the front so everyone can see they must travel to Miami all the time.

They are the same women you see at the doctor office waiting rooms with the department store bags from Macy's, Barnes and Nobel, and Neimans. They like to subtly announce to everyone that they don't shop in Buenos Aires. They go to the States to shop. To them, anything with a "US" label is a must have. So naturally they want to be seen around town with the not-so-ubiquitous white cup with the green logo.

So will Starbucks be a success here? Based on the response today, Frank should be a very happy man. However, it will take time. Clearly, the under 25 crowd gets it. The older crowd will have to be converted slowly and I don't think the Martinez and Havanna chains have much to worry about yet.

This morning, I was talking with Ricardo Rico, Starbucks' director of Marketing in Latin America. He said they knew Argentina was going to be a tough market to crack. They took their time and wanted to do it right. But he knew it was going to be an education process here and that was going to take some time too. He was confident they had the right mix of products to appeal to the Argentine taste.

Come on Ricardo! A mate flavored latte? Yes thats right, a mate latte. Yuck!

25 comments:

Jon said...

Interesting observations on the demographics of people who are going there. Did you try a mate latte? They sound very interesting to me and am wondering if they are any good.

Quickroute said...

I've never understood the Starbucks craze. Overpriced and overrated in my opinion. I'm sure it will be a hit here though as if they can sell McD's to a nation of carne conosieurs they can sell overpriced coffee aswell!

Anonymous said...

I'm with Quickroute - this is a complete disaster for Argentina. They will probably use the same ruthless techniques they've used in my home country to obliterate any local competition (flood the area until all the others are forced to shut then start thinking about profits) so that you'll have to walk miles to find a decent cup of coffee. And how are paper cups better than proper ones in this day and age - surely we should know better by now? I'm dreading the rest of the invasion...

jon said...

From what I can tell from this post, there are some people in Argentina who will enjoy going to Starbucks and being part of a different type of coffee experience than what might have been traditionally available to them. But there are also people who won't like it and stick to the same cafes that they have been going to. All it does is add more choice. Also, from what I understand, the coffee is more expensive than most of the other cafes in Buenos Aires - how is that obliterating the competition?

Longhorn Dave said...

Jon:

No I didn't try the Mate Latte. I have just gotten use to drinking mate and the idea of mixing it with warm milk does not sound good to me.

Quickroute:

Great observation about McDs. What is it with McDs here? How can they take a McDs hamburgers that already taste bad in the States and make them taste worse here?

Anon: Don't be crying about the fall of everything great about Argentina just yet. Starbucks will have a tough road ahead here and plan on going slow. I along with Frank think there is room for competition between the classic cafés.

How many large groups of teenage girls do yo see hanging out at your corner Café?

I think Jon is right on the money in his response to your question.

Nature Lover... said...

I also don't understand the Starbucks craze. It is highly overprized and overrated. If I were in Argentina I would try the traditional cafés.

Longhorn Dave said...

My only problem with the typical café here is that coffee is on the weak side. When you order a doble espresso, it is very weak and watery at most places.

Giorgio said...

I like Brave People...I always wanted to know this type of person to make a business...but...it's very difficult!!... Greetings

Al D said...

What's the price of a Starbucks coffee or latte going for in Argentina?

Longhorn Dave said...

Yanki Mike has a list of all the prices over at his blog post.

COOKIE MONSTER said...

OK ABOUT COFFEE, BUT WHAT ABOUT THE COOKIES?!?

Longhorn Dave said...

Cookie Monster... They were great of course. My 4 year old said it was the best chocolate chip cookie he has ever tasted. It was even better than moms!

Starbucks gets them from Sugar and Spice.

Longhorn Dave said...

I hope Cookie Monster doesn't work for Sugar and Spice and I was duped into giving a shameless plug. :)

Frank.Sugar&Spice said...

Cookie monster? Hmm... I don´t see any cookie monster on the payroll.

Miss Tango said...

Actually, although I had never tried it, mate lattes are not a new thing. They had them somewhere in Vancouver, but it wasn´t at Starbucks.

JOTAELE said...

Mate Latte exists!!!
It's mate cocido and milk.You cook the yerba in the milk. Very nice in winter!!

Anonymous said...

Sad, Sad, Sad. THEY ARE DESTROYING OUR COUNTRY!

http://buscador.lanacion.com.ar/Nota.asp?nota_id=1018962&high=bulgari

M said...

I've found a couple of strong brews around Palermo, including the Heladeria near the corner of Julian Alvarez and Santa Fe and "Petaluma" near Scalabrini Ortez and French. Petaluma boasts itself as a cafe for baristas. I highly recommend them.

I stay away from the Coffee Store, Delicity, and (now) Starbucks.

kelly said...

hi all

i doubt that starbucks will be a serious contender here.
it's far too expensive and clearly does not have any set training standard,as witnessed by my purchase of a cappucino.
i don't drink coffe everyday in toronto, but always at an independent or starbucks because i can count on a certain standard.
i only drink cappuccinos and they seem to be very difficult to get anywhere...even in many parts of europe.
there's usually way to much milk.
paying inflated prices for a poorly executed product doesn't bode well, however coffe prices in general seem high here.
good luck to the franchise owner...i'm sure it's not a cheap investment.
nothing ventured nothing gained.

Longhorn Dave said...

I don't get where everyone is under the impression that Starbucks is more expensive than the other Coffee chains here.

A Venti latte is a 20oz drink. The biggest cofee drink you can get in the cafes here does not even come close.

I spend roughly $18pesos at starbucks for a muffin and a Venti Latte with an extra shot (3 total).

If I go to Martinez, I get three crappy medialunas and a capuccino (about 8 to 10oz) I pay $16 pesos. I'll gladly pay the extra two pesos ( ~70cents) to have twice as much drink, more caffeine, and a muffin that is 100 times more tasty than the Martinez medialunas and more filling than all three combined.

How is that way more expensive?

MaryBlack said...

I hope it is, so it reachs Cordoba. If it's half from McD's Coffee and cookies... I go to college and for me that cup of hot milk and coffee, after being stuck in anatomy class for two hours, where EVERYTHING smells rotten, is simply heaven. About being overpriced... come on! everything in this country is overpriced! And as a once-in-a-while thing, like my McD's treats... it's a good deal. Besides yeah, some people might not like it, but really as someone who barely has time to reach home to change clothes and make it to the next class, sitting on a cafe and wait around for the waiters and then drink the coffee it's a waste of time when you don't have it. So yeah it might be overpriced and overrated... but as the quickest warm option of food I and my teachers have (because many of them have 2 or 3 jobs and they love McD's too) before we arrive home by nigth, "Hail to Starbucks!" I say.

Allison said...

I smiled at your comment about the Argentine soccer moms sporting their U.S. labels. It's amusing when you see that woman carrying around a ratty Victorias Secret bag which wouldn't be considered twice back home before going in the garbage. This is my first comment on your blog. I'm also a Texan in BsAs. I moved here a year and a half ago.

Ricardo said...

Dave:


It will work with the young "globalized" people, with people in a hurry, and with the "demography" you described that think the display of american customs make them look worldly and traveled....(I know how funny most americans will find this!!)

Oldtimers like me go to have a coffee for something beyond the beverage and the cookies...we like the ambience of a traditional café...the reading of the papers..the chat with friends..the street view from a window table..

And many americans do like it too

But practicity has value too, and I am not bashing Starbucks here...

I go to the fast food joints only in emergencies

Ricardo

Noel said...

When I looked into the Starbuck's about three weeks ago, the excitement had died down considerably. Good coffee is a lot cheaper in BsAr than they offer, and with more interesting and traditional surroundings. Don't waste your time - try a Havanna cafeteria.

Anonymous said...

Hi there! Has anyone found Dark Brown Sugar like the kind we have in the USA, i.e. C&H brown sugar from Hawaii. I have looked everywhere and can't find that kind of sugar. They have a dark brown colored sugar but the taste is not the caramel flavor of ours. I have a craving to make a batch of Oatmeal cookies and I NEED the brown sugar. Thanks!
ColoCalifornia