Starbucks vs. The Coffee King — Which Team Will Reign Supreme?
Starbucks rules the world and everyone knows it. Their green mermaid logo is as ubiquitous as McDonald’s golden arches or Target’s bulls-eye. You may bemoan the lack of quaint, mom-and-pop cafes (where they’d scoff at you if you asked for a soy milk substitute), but nobody can deny the downright convenience of the Starbucks machine– there are seven locations within a two-mile radius of my house alone.
However, there’s a new man in town, and he’s eager to usurp our favorite corporate caffeinators. His name is Dang Le Nguyen Vu, a.k.a. the “Coffee King.”
Vu is the chairman of privately owned Trung Nguyen, Vietnam’s biggest chain of coffee houses and what he hopes will become Starbucks’ biggest competitor. Vu believes that most of Starbucks’ success lies in their branding, and not in their actual product. “They are great at implanting a story in consumers’ minds but if we look into the core elements of Starbucks, what they are doing is terrible. They are not selling coffee, they are selling coffee-flavoured water with sugar in it,” he says.
You have to admit, he’s right. Does anyone really go to Starbucks for their refined roastin’ abilities? No, you go to order that slightly embarrassing frilly/fruity drink, to work on your startup while you sit in their cushy lounge chairs, even to listen to that cheesy singer-songwriter music that’s always playing. People go for the experience, not the commodity or the service, because we live in an experience economy.
Starbucks is great at selling that hip, urban, modern-wo/man-with-a-laptop experience, and Vu knows this. “American consumers don’t need another product,” he says. “They need another story.” His company’s story is that they source all of their beans from smaller, certifiably sustainable farms where growers receive guaranteed prices. It’s an appreciated attempt at harmonious sustainability, even if it does seems a bit contradictory to his aim for global domination. If anything, it would boost the economy for those in Vietnam’s coffee-growing highland region since, despite being the world’s second biggest coffee exporter overall (after Brazil), the country only earns a tiny fraction of the crop’s generated income– a veritable espresso shot in the Venti scheme of things.
The Coffee King plans to expand his business and permeate the U.S. domestic market come next year. Who knows, maybe there will be a Trung Nguyen in your neighborhood soon! There’s definitely a storm a brewin’ between the java gods.
But hey, as long as it’s brewin’ a mighty fine cup of joe.
via Reuters/photo courtesy of Sparklette
