How Starbucks Beat The Odds In Italy

Summary

Starbucks' entry into Italy, the birthplace of espresso, came in 2018 after 47 years of global expansion. Despite Italy’s deeply rooted coffee culture, Starbucks has adapted its offering to suit local tastes, opening stores in Milan, Rome, and Florence. However, its model, focused on leisurely café experiences and larger, pricier drinks, contrasts with Italy's quick, social coffee habits. While some locals embrace the brand's international appeal, others resist, viewing it as an outsider. Starbucks' success in Italy highlights its efforts to respect local culture while appealing to tourists and offering a unique experience in a competitive market.

Takeaways

• 😀 Starbucks is the largest coffee company in the world, with over 34,000 stores across 80 countries.
• 😀 The company entered Italy in 2018, despite Italy being a global coffee hub with strong local coffee traditions.
• 😀 Starbucks is known for its larger coffee sizes and a sit-down experience, contrasting with Italy’s culture of quick espresso consumption.
• 😀 Italians typically prefer simple espresso orders and view coffee moments as social exchanges, often at the counter with brief interactions.
• 😀 Starbucks' pricing is significantly higher in Italy, with a cappuccino costing around €4.50 at Starbucks, compared to €1.30 in local cafes.
• 😀 Starbucks faces cultural challenges in Italy, where customers usually don't linger for long periods or work on laptops in cafes.
• 😀 Starbucks’ entry into Italy involved a partnership with an Italian brand manager and local businesses to adapt the store design and menu.
• 😀 The company’s first Italian store in Milan features a 25,000-square-foot roastery, with innovations like an affogato station and augmented reality.
• 😀 Despite local opposition and protests, Starbucks has made strides in Italy, continuing to expand into cities like Rome and Florence.
• 😀 Tourism plays a significant role in Starbucks’ Italian success, as international visitors often prefer familiar brands like Starbucks.
• 😀 The company’s success in Italy is still modest, with the country contributing only a small portion to Starbucks' overall revenue, yet the brand is expanding its presence.

Q & A

Why was Starbucks' entry into Italy considered a significant challenge?

Italy is known for its deeply ingrained coffee culture, where traditional espresso bars are central to daily life. Starbucks' larger coffee sizes, café-style seating for working, and different coffee rituals did not align with Italian habits, making it a challenge to adapt to local preferences.

How did Starbucks adjust its offerings to cater to Italian tastes?

Starbucks partnered with local Italian businesses, adapted store designs using Italian materials, and adjusted its menu to suit local tastes. For example, it collaborated with Italian bakers for localized pastries and adjusted the coffee flavors to be closer to Italian espresso styles.

What are some of the unique features of Starbucks' flagship store in Milan?

The flagship store in Milan is a 25,000-square-foot roastery that includes an in-house coffee roaster, a bakery with a wood-fired oven, augmented reality walls, and unique offerings like an affogato station, which serves the Italian dessert made with ice cream and espresso.

What local reaction did Starbucks face when it first announced plans to open in Milan?

Locals protested Starbucks' entry into Milan, with some even setting fire to palm trees planted by the company in the historic Piazza del Duomo. The protest was partly due to concerns about Starbucks appealing to illegal African immigrants, as claimed by some local politicians.

How does Starbucks' pricing compare to local Italian coffee prices?

Starbucks' coffee is significantly more expensive than local Italian cafés. While a typical cappuccino costs about €1.30 in Milan, Starbucks charges around €4.50, which has been a point of contention, particularly with local consumer groups.

What role does tourism play in Starbucks' strategy in Italy?

Tourism plays a crucial role in Starbucks' strategy in Italy, particularly in high-traffic cities like Milan. Tourists, who are often more familiar with international brands like Starbucks, contribute to the brand's sales, making it a key demographic for the company.

How does the coffee culture in Italy differ from Starbucks' model?

In Italy, coffee is consumed quickly at the counter in social settings, often in intimate exchanges with baristas. Italians typically order a strong espresso or cappuccino, but do not sit for extended periods or work on laptops in cafés, contrasting with Starbucks' more casual, leisurely environment designed for extended stays.

What is the significance of Starbucks' 2018 store opening in Milan?

The 2018 store in Milan marked Starbucks' long-awaited entry into the birthplace of espresso. This opening was seen as a symbolic moment, as Starbucks had modeled its business on Italian coffeehouse culture, yet took nearly 47 years to establish itself in Italy.

How has Starbucks been received by Italian customers?

While many Italians are skeptical of Starbucks, some appreciate the unique experience it offers. Many visit Starbucks for its exotic appeal, especially in cosmopolitan cities like Milan, where the brand is seen as a status symbol. However, Starbucks faces challenges in attracting local regulars who prefer traditional coffee bars.

What was the significance of the partnership with Percassi for Starbucks in Italy?

The partnership with Percassi, an Italian brand manager, was essential for Starbucks' successful entry into Italy. Percassi helped Starbucks adapt its approach to the Italian market, managing store operations and ensuring that local cultural preferences were respected while maintaining the Starbucks brand identity.