Can Starbucks convince us that a cup of instant coffee can taste just as good as their regular brew?

This week Starbucks launched Starbucks VIA, a product they describe as a "breakthrough in instant coffee." The company says they worked for 20 years to develop an instant coffee that preserves the taste, quality, and freshness of a brewed cup of Starbucks coffee.

My first reaction when I heard about VIA was "Are they nuts?!" What happened to the "third place" coffee house experience? Do Sanka drinkers dream of coffee made from "the highest-quality ethically sourced 100 per cent Arabica beans?" What happens to their "premium" brand when customers see it in the grocery store next to Folgers? And if this stuff really does taste as good as brewed Starbucks, aren't they just encouraging customers to stay at home drinking $1 cups of VIA instead of shelling out $4 at their nearest Starbucks for a non-fat, extra-hot Mocha Frappuccino?

Positioning: Us vs. Us, not Us vs. Them

Starbucks hasn't gone so far as to claim that VIA isn't instant coffee (a common tactic when re-defining a category) but they are careful not to compare themselves directly to Sanka or Nescafe. The reference point is instead their own brewed coffee. VIA is described in their marketing as instant coffee that "tastes as delicious as our brewed. Almost was not an option." It’s a bold move for the company. Their positioning sets customer expectations sky-high. Decades of experience has taught us that instant coffee tastes nothing like brewed coffee. The challenge for Starbucks is not just to make it taste good, but to make us believe it tastes good.

Starbucks is taking the challenge head-on by staging the Starbucks VIA Taste Challenge. Participants can sample VIA next to the brewed coffee and see if they can taste the difference. This tactic certainly shows that the company is confident in the quality of their product. And allowing consumers to first experience it in the coffee house context drives home the message that this is not instant coffee as you know it. It's important for Starbucks to establish brewed coffee as the reference point for pricing as well. Starbucks VIA sells for around $1 per serving, a significantly higher price than other brands of instant coffee.

Use Cases: Drink Premium Coffee, Not Swill!

Some have said that positioning VIA against Starbucks brewed coffee will cannibalize in-store sales. I believe the bigger risk is that people (Americans in particular who don't drink a lot of instant coffee) won't know when to choose VIA over the regular brew. Here Starbucks takes a page out of the product marketing handbook by informing their customers about what the company calls "usage occasions." These demonstrate that VIA isn't just for folks that drink instant coffee, it's also for people in situations where the only coffee to be had is lousy, if there’s any coffee available at all. Airline coffee stinks. The free coffee in your office is disgusting. The marketing is as focused on educating people about where to drink VIA as it is on the taste. For example, a video documenting the Starbucks VIA Roadtrip stop in Vancouver didn't include a single quote from a Canadian about the taste but did show a host drinking VIA on the Capilano suspension bridge.

Sales Channels: Keep my Starbucks Away from that Sanka

In addition to its own cafes, Starbucks VIA will be sold in REI, Office Depot, United Airlines, Barnes & Noble, and Marriott and Omni Hotels. Distributing the product this way drives home the use cases and keeps VIA away from being directly compared to other instant coffees. You won't see VIA in a grocery store until sometime in 2010. My guess is that this is a deliberate move to ensure Starbucks has had a chance to get customers talking about the taste and "usage occasions" for the product. I won't be surprised if, when VIA does show up in grocery stores, it's sitting closer to the regular Starbucks ground coffee than it is to Sanka.

But isn't the Starbucks brand all about the in-store experience? Not so. Starbucks has been selling Frappuccino drinks, ice cream, and ground coffee in grocery stores for years. According to Starbucks, instant coffee makes up 40 per cent of the $21-billion global market for coffee. Starbucks has been hit hard by the recession and forced to close nearly 1,000 stores. They are under pressure from the McDonald's expansion into the premium coffee market. Expanding the brand outside of the retail outlets makes sense for them in this climate.

Can Starbucks VIA be Successful?

I took a break while writing this and walked over to my local Starbucks and bought a 3-pack of VIA. Honestly, I thought it tasted pretty good, but when a co-worker saw the package, the comment was, "Instant coffee, gross." Can Starbucks convince us that great tasting instant coffee is not only possible but worth paying a premium for? Only time will tell.