• by Karlene Lukovitz  @KLmarketdaily, October 20, 2009

  Brand watchers started weighing in on Starbucks's Via Ready Brew long before the product's North American rollout two weeks ago, and the debate continued last week as Starbucks announced its plans to launch a decaffeinated version in company-owned stores starting Nov. 17, in time for the holidays.

Many have expressed the opinion that Starbucks' decision to market an instant coffee, regardless of its quality or closeness in taste to its fresh-brewed, will end up cheapening the brand and ultimately undermine -- rather than strengthen -- the upscale chain's health.

One brand expert who doesn't buy into that scenario is Michael Stone, president of The Beanstalk Group branding and licensing consultancy.

Stone isn't questioning how much Starbucks has riding on Via. Chairman/CEO Howard Schultz has been public about the company's intention to "transform the coffee industry" and grab a sizable chunk of the $21 billion global instant coffee business, which accounts for about 40% of total coffee sales. He has also confirmed that the investment in development and marketing Via is Starbucks's largest to date because of "the size of the prize and how important it is."

Nor does Stone disagree that Via doesn't fit with the brand. "I think there's really no debating that point," he says. "Starbucks is all about fresh-brewed coffee and the smell of fresh-brewed, in an environment that resembles a neighborhood coffee shop. Everything they've ever stated has spoken to that heritage. Over the years, some of their own executives have even made statements to the effect that instant coffee would be a brand detriment, in their opinion."

What Stone questions is the conclusion that the launch will hurt the brand. "The real question is how far off brand you can go without damaging it," he says, adding that Starbucks has made a well-researched bet that the stretch is justified by the opportunity.

"Starbucks is a public company that needs to grow, and this is a product that can take the brand into new retail channels, including mass retailers like Costco and Target" as well as providing more opportunity for international expansion, he adds. "Their challenge is to try to preserve the romance of a local coffee shop as a huge chain, and also tap into Americans' need for speed and hyper-convenience. Obviously, they have to lose some of that romantic aura along the way."

What people tend to forget, Stone says, is that this is not the first time Starbucks has gone off the fresh-brewed coffee brand core for growth's sake. "Drive-throughs certainly aren't consistent -- nor is ice cream, when you think about it," he says. "But they managed through those innovations, and if they believe they can pull off instant coffee because it's such superior instant coffee, there's no reason to assume they're wrong."

The bottom line: "Via is contrary to the brand vision, but it's not going to damage the brand," Stone maintains.

In announcing the decaf extension, Starbucks President Cliff Burrows said that the company is "encouraged by our early results and positive response from both our customers and our partners."