Time reports that the U.S. specialty coffee market is a $13.7 billion-dollar business. So what happened when McDonald’s decided to give Starbucks a run for its money via the new McCafe products? More products and a range of pricing options. In other words, competition works again for the consumer.
Last week the Starbucks announced that it would sell one of the premium brands it owns — Seattle’s Best Coffee — in Burger King restaurants, as well as Subway restaurants, AMC movie theaters, and other supermarkets and coffee houses around the country, 30,000 locations in all. The company won’t admit that McCafe played a part in its decision to expand Seattle’s Best, a former rival that Starbucks purchased in 2003, and which has sat quietly in 500 Borders book store locations over the last few years.
Starbucks doesn’t have to “admit” anything. It’s obvious.
Meanwhile, in the health care/health insurance market, the president and Congress have done the opposite, rejecting competition and market economics. Don’t be surprised when their action achieves the opposite of their grandiose claims.
