Java King: Starbucks Versus High Point Coffee

Seattle-based Starbucks recently announced another price increase for all milk-based beverages at the largest coffeehouse/coffee bar chain in the world. With its trendy appeal and shop on every block personality, Starbucks built itself into one of the premiere brands in the world alongside Google, McDonalds, and Coke. With growth comes competition from all directions. Along with longtime Starbucks enemy Dunkin Doughnuts, a new contender for the java king title has emerged as new java joint, High Point Coffee pushes its way into the fray.

Based in Mississippi, the newbie java spot has only been in business for less than five years. However, with its surge in revenues and customer retention, executives recently decided to push the brand nationally, going into direct competition with what they call the 100-lb gorilla, Starbucks. With its 12,000 stores, it would seem far fetched to compete in a head-to-head battle; however, the founder of High Point Coffee, Thomas Blanche is confident that the High Point Coffee brand will be equal with that of Starbucks.

As noble as that goal is, very little is known about High Point nationally. When Starbucks went national fifteen years ago, it was in a similar place as High Point. With mass appeal in Seattle and the surrounding areas, Starbucks' brand had little immediate buy-in for consumers. What Starbucks had that High Point will not is first to market ability. When Starbucks began its growth spurt, if a person wanted a cup of coffee, they went to McDonalds. And they certainly did not pay five dollars for it. When a Starbucks opened in a community, it did so without competition. High Point Coffee will be entering saturated territories with Dunkin Doughnuts and other independent coffeehouses and coffee bars in addition to Starbucks.

With that fact it would seem impractical to create a war with such a dominant force. But in Memphis, High Point Coffee placed a newly opened location one block away from an entrenched Starbucks locale. Let the war begin!

The deciding factors

In any battle between products and services, a company has to choose a focus of which to perform superior to the entrenched business in order to make a legitimate war occur. Beyond just opening up 12,000 stores, revenues and numbers rarely if ever give a real indication to the appeal and loyalty factors involved. Some wars are fought based solely on bottom line numbers like revenues and profits. Based on what can be learned from talking to staff, the drive for building the High Point Coffee brand has a much more tangible feel than dollars and cents.

With its free WI-FI service, High Point Coffee is a magnet for laptop users who are looking for a hi-speed internet connection while enjoying their coffee. Starbucks has a partnership with one of the wireless carriers with a per minute usage charge attached. For coffee drinkers who value using their laptops while getting a java fill-up, free WI-FI is priceless. Another immediate difference between the two is the artsy nature of High Point. Local artists' works fill the walls of the High Point coffee bars. Along with the closed circuit television, art displayed, and store design, the feel of High Point separates itself from any coffee bar around.

It is obvious that this battle has not really started yet. With High Point Coffee choosing to franchise its growth as opposed to corporate development driven growth, the question will become can High Point maintain the quality of its product with franchisees running the coffee bars independently as opposed to the established Starbucks style of growth. When you walk in a Starbucks, you will get the same offerings nationally. A High Point location in one part of Memphis will have some offerings the High Point in another area does not. This is the independent nature of High Point where such items as juices, bagels, and pies are at the discretion of the owner/operator of that particular location.

If you were to bring a Seattle resident into a High Point Coffee bar they might just tell you that High Point Coffee reminds them a lot of what Starbucks used to be, before its commercialization and push to go global. There have been complains from Starbucks' most loyal customers that it has lost a bit of its personality and ambiance for the sake of processes and efficiencies in making and selling coffee. There was an experience that was to be had in the early Starbucks coffee shops. When you walk into a High Point Coffee locale you are greeted by a staff whose job is to know you and your favorite drinks. The personal feel and touch of the High Point Coffee bars is opposite what you feel when you walk in Starbucks today. Where they want to get you in and out as quickly and efficiently as possible.

One can only imagine that with growth, such a problem will always erupt. But when customers place value on a coffee bar, touch and feel are critical elements. With issues like price and coffee products being similar, other variables must be assessed. I mean, how many ways can you make an espresso or mocha? Can you put a value on High Point looking and feeling local and personal? If so, then you have your winner.