Starbucks’ aggressive growth model may work in North America, but not in Italy. Italia’s coffee culture, and its resistance to Starbucks, suggest a human component amiss [1] with Starbucks.
On September 13, 2022, Starbucks unveiled its “unparalleled reinvention plan” for growth at its biennial Investor Day event. The strategic focus, per usual, was on reducing production time with new technologies. This, paired with seemingly random projection numbers and opaque language such as “unlocking experiential convenience,” represented yet another step away from Starbucks’ original mission to “improve the human spirit: one person, one cup, and one neighborhood at a time.” Starbucks’ ambition seems to target as many people, as many cups, at a time.
The approach may work in the US and some other parts of the world. Not in Italy, though, where to-go coffee in bazillion sizes and milk options represents an invasion of corporate America. To Italians, coffee is simple espresso, a thimbleful knocked down at a bar while chatting with neighbors and the barista. Coffee is also considered a social right, and is synonymous with enjoying life—it is not a status symbol as Starbucks is in other countries. Caffè sospeso, as an example, demonstrates this egalitarian [2] approach to coffee, wherein a customer pays one extra coffee for the next stranger who cannot afford it. This tradition is still practiced throughout Italy.
Starbucks’ slow growth in the Italian market suggests that something is missing from the equation. In 2018, Starbucks opened its first Italian location in Milan’s Piazza Cordusio. The building is a stunning former post office, and the posh [3] interior features Tuscan marble top counters, a cocktail bar, a nitrogen ice cream station, and a bakery with a wood-fired oven—none of which is seen in an average Starbucks store in North America or Asia. At the time, the company “vowed to open 15 new locations per year,” according to Fortune. Despite the grand opening of the Milan storefront to appease a market with picky culinary preferences, in 2022, there were only 11 Starbucks stores nationally. In 2021, the company’s Italian licensing partner Percassi announced a more modest plan to open 26 new locations by 2023.
Even the adjusted target may be out of reach unless Starbucks gets the human component right, unless it rethinks the approach shown in its recent “unparalleled reinvention plan,” which might be difficult for a fast-food giant that has thrived on paper cups and plastic lids. Laura Giannatempo, a Turin native, told the Traveler back in 2018, “Italians don't need Starbucks. Coffee culture runs deep; il caffé is a ritual with an ingrained set of rules. You'll never see anyone walking around with a paper cup in their hand—you drink your espresso or your cappuccino standing at the bar. Period.” Even if Starbucks manages to deliver better-than-market quality coffee to Italians, which is unlikely, the convenient paper cups may not be appealing enough to replace its coffee culture. At least for now.
When Starbucks, a fast-food behemoth, struggles in Italy, it is worth asking, “How much growth is ever enough?”