Consumer Reports recently compared coffees and came up with an interesting result. According to its tasters, Starbucks' (Nasdaq: SBUX) coffee was outdone by McDonald's (NYSE: MCD) premium coffee offering. Should Starbucks -- and its shareholders -- be experiencing more than caffeine jitters?
Led by a professional tester and some employees of Consumer Reports' food testing unit, the team sampled medium plain coffees (with no sugar and cream, mind you), from two stores each of Starbucks, Dunkin' Donuts, McDonald's, and Burger King (NYSE: BKC). The team of taste testers deemed McDonald's premium coffee the best-tasting and the best value, at $1.40 a cup. It might surprise some people that the priciest cup of that size regular coffee actually came from Dunkin' Donuts, at $1.65.
I started thinking about this news, simply because, unless this was some cupper's aberration, it signifies a significant shift in the gourmet coffee business.
Not so long ago one could buy what was considered gourmet coffee at Starbucks and other quality coffee shops, or junk coffee anywhere else. You know, diner coffee.
But if McDonald's coffee really is as good as Starbucks coffee, then we have hit a taste plateau.
And if coffee shops can no longer differentiate their brew as being "gourmet", then how can they set themselves apart from McDonalds, Dunkin' Donuts and others?
(Not with wi-fi. McDonalds is getting that too.)
Can they do it by selling fair trade coffee? McDonald's UK is already on top of that one.
But perhaps we'll see more coffee roasters and coffee shops selling not just a generic fair trade coffee, but fair trade coffee beans with a story.
Small companies can tell an honest, human story about their relationship with specific cooperatives in particular regions.
Big companies can't do that. They have to buy too much coffee. And nobody believes a huge corporation when it shows a photo of one of its employees giving a paternalistic hug to a coffee grower.
In other words, large companies and small can both sell fair trade coffee...the "new" gourmet coffee. But only small companies can tell an honest, engaging story. That is, if they choose to become genuinely involved with individual cooperatives, or small groups of cooperatives.
This is one of the great things about fair trade coffee. Doing the right thing benefits everyone, from the bean to the cup.