In Café Business, Small & Nimble Competitors Find Success
The Seattle Times reports that as Starbucks encounters the financial and creative pains sometimes associated with meteoric growth, the independent coffee shops that long have feared the giant marketer no longer do so.

“These small, nimble competitors don’t struggle with the high overhead costs and glaring global scrutiny that besets Starbucks,” the Times writes. “Unlike independents up against a big retailer like Wal-Mart, they often thrive when Starbucks is nearby.

“Collectively, independent and small-chain coffeehouses have the largest share of coffee and doughnut sales in the U.S., with 34 percent of the market in 2006, according to a new report from the Chicago research firm Mintel. Starbucks has the next largest share at 29 percent.”

While the independents have benefited by the fact that Starbucks helped to create a national market for upscale cafés, they also have worked hard to develop their own differential advantages, being more connected to local communities and tastes than a national chain could be. And they “roll their eyes at Starbucks’ marketing, from price discounts to the way its stores post signs loudly hawking new drinks like Vivanno smoothies.”

But it is a kind of creative marginalization.

I don’t know how Starbucks could have done things differently. Once you get to be a certain size, there are realities that have to be factored into the business. Maybe, at a certain size, a “hand crafted” product that creates a level of intimacy with the consumer just isn’t as possible anymore.

Every once in a while, I’ll get an email questioning the time and space I devote to Starbucks. But this is an evolving story that continues to fascinate me, and I’m surprised when people don’t see the relevancy. Maybe it is because I’m running a little independent, hand-crafted business here that is designed to create a level of intimacy with the reader…and I like to think of my nominal competition as the McDonald’s of the news business.