The Independent Coffee Industry vs. Goliath

 
 

Eoin Duffy investigates the emerging war between independent Irish cafés and the corporate giant Starbucks

Last month, independent coffee shops across Ireland declared war against one of our country’s most profitable multinationals and their greatest current threat: Starbucks. A devastating message was sent out beneath a seemingly charitable gesture when more than 20 locations in Dublin city alone provided free coffee to hundreds of customers. Our favourite independent coffee outlets are in grave danger of going under thanks in-part to the growing prominence of this giant American competitor.

To gain a better understanding of the gravity of the challenges they currently face, one must only look at how they have saturated the market that they occupy. Starbucks operates out of 52 locations in County Dublin alone, with that number set to increase over the coming years. In comparison, most independent coffee shops must get by with only one revenue stream. The availability of Starbucks offerings around every corner is always going to pose a serious threat to small competitors. However, we cannot act as if this is not to be expected.

We are not a protectionist nation by nature. We are but a small isle with less than 5 million residents, therefore, it is understandable that we are highly dependent on Foreign Direct Investment (FDI) and various Multinational Corporations (MNCs) to significantly boost our otherwise unsustainable Gross Domestic Product (GDP). Companies such as Starbucks provide sizeable funds in the form of taxes that contribute to essential government expenditure. That is not to mention the significant amount of employment and, without being biased, the great tasting coffee that they provide daily.

“The independent coffee shops are basically being run out of business. It’s not fair.”

In the wake of the public showing of solidarity against Starbucks, many public figures came out and had their say on the situation. Dublin City Councillor Mannix Flynn was one of the most notable to wade in on the conversation saying,“The independent coffee shops are basically being run out of business. It’s not fair.”

How is this unfair? Business is business, and business is generally unfair. Our country operates as a free market economy, which means the remaining small businesses cannot sit around feeling sorry for themselves. They must face up to the challenge or risk dying out like so many before them.

The online world we live in today offers boundless opportunities to small businesses that are both feasible and obey their resource constraints. Today it is possible to promote a small business on social media at little to no cost. By thinking strategically and creatively, a local independent business in the city can drive a social media campaign to the Facebook, Twitter, and Instagram feeds of thousands within hours. The power of a well-run social media platform cannot be overlooked, for a bit of humour and innovative content creation can work wonders in getting the word out about your small business.

Lessons can be learned from the success stories of various independent coffee shops across the United States of America

Lessons can be learned from the success stories of various independent coffee shops across the United States of America, where competition for business is even greater. Take for example, Elm Coffee Roasters in Seattle, they hire some of the city’s best photographers to generate content for their social media platforms. Seeing professionally crafted aesthetic images imprints a great first impression on the minds of potential customers, and makes their offerings more marketable and appealing.

Similarly, Alfred Coffee & Kitchen also expertly drew on the power of social media to generate a buzz around their products. By adopting the words ‘But First, Coffee’ as their official slogan, they created a catchy phrase that became synonymous with their brand in the Los Angeles area. As of recently, over 136,000 Instagram posts were accompanied by the #butfirstcoffee, with the majority accompanied by the location of Alfred Coffee & Kitchen. These examples show the vast potential opportunities social media can offer, once it is creative and innovative in its implementation.

Closer to home, the success of Beanhive on Dawson Street is another aspect to appreciate for those independent cafés seeking to stay afloat in a barista-eat-barista world. At Beanhive, one can expect a treatment to a flurry of extravagant latté artistry on their favourite roast. Differentiation to this extent is a necessity in the combative response to MNCs such as Starbucks pushing competition out of the market.

The free coffee initiative was a start for independent coffee shops.

The free coffee initiative was a start for independent coffee shops. It publicised the all too real fact that this is a serious problem they are facing, but in the long run, these businesses need to generate a more sustainable means of competing. They cannot expect more business just because customers may pity them. They have the power to fight back against the Goliathan Starbucks with some creativity, guile, and a real will to embrace the challenge. Facing the competition head-on presents their only real chance of survival.

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