Onward (49 page)

The reason most instant coffee is so vastly inferior to high-quality brewed coffee is because its manufacturers subject poor-quality beans to intense water extraction and drying processes that strip the beans of their natural aromatic compounds and flavors. By the time the resulting powder, or “crystals,” are mixed with water, any quality in the raw bean is long gone. Yet instant coffee consumers accepted this mediocrity. Their palates had adapted. And without customers demanding a better product, consumer goods companies focused on making water-soluble coffee as cost-effectively as possible. As a result,
the instant coffee market had not seen any real innovation since just after World War II.

Why, most people would ask, should a small coffee company even bother to try?

It would have been easy, and understandable, for me to thank Don for sharing his experiment with us, wish him well, and return to my work. But Don Valencia and his invention intrigued me. His scientific prowess, his innate curiosity, and his deep-rooted values further impressed me. I also genuinely liked visiting with Don. He, too, was an entrepreneur motivated by impossibilities; “it can't be done” was perhaps the one statement that most motivated him. I knew he could be an asset to Starbucks.

We stayed in touch, and by 1993 Don had accepted my offer to run Starbucks’ research and development operations. Of course, we did not have an R&D facility, but it didn't matter. Don had introduced me to an exciting new possibility, and because Starbucks was young and hungry and nimble enough to adopt the unexpected, I would have been shortsighted, as an entrepreneur and as Starbucks’ chief executive officer, not to turn his enthusiasm and innovative work into potential value for the company. So instead of asking “Why?” I asked, in true entrepreneurial fashion, “Why not?” and asked Don—a man who had never worked in the retail or coffee industry—to build a world-class R&D team and create a water-soluble coffee that was as bold and rich as a cup of fresh-brewed Starbucks and could be mass-produced and commercialized.

To be clear, the goal was
not
to make a better cup of instant coffee. No. Our aspiration was much higher. And while I might not have specifically articulated this back then, I sensed that Starbucks had the potential to once again create a new product category so that, one day, coffee lovers who once would not have dreamed of drinking instant coffee would drink ours.

Don labeled the secret assignment JAWS, an acronym for “just add water and stir.” Neither of us imagined that something sounding so simple would prove to be so very, very complex.

Don approached his research intellectually, studying the chemical properties of coffee and trying to understand why aromatic compounds got lost during the process of extraction and drying, destroying
the coffee's flavor. Yet scaling the process that Don had conjured up in his lab so the powder could be produced in large batches proved incredibly difficult. Every time he experimented with a new process, the resulting powder, once in the cup and mixed with water, did not taste or smell fresh-brewed—or anything like Starbucks. But Don did not give up. Instead, he brought a handful of other talented people into the fold.

Among them was a tenacious Panamanian engineer named Urano “Uri” Robinson. Like Don, Uri did not have a coffee background—he came from the pharmaceutical world—but as Don confidently described JAWS's proposition, the daunting David-versus-Goliath challenge piqued Uri's interest. Uri was a dogged engineer and, like many others who worked for Starbucks, also desired to do work that he found meaningful. In 1997 Uri moved his family to Seattle to join Starbucks’ tiny R&D department.

Over the years—and it would be years—Don and Uri and a rotating team that included product developer Hannah Su secretly toiled away on a project that no one else at Starbucks knew or cared much about. Don routinely equated the JAWS journey to hiking Mount Kilimanjaro. It demanded well-honed skills, resilience, self-confidence, and, most importantly, a passionate belief in the project's goal and purpose: Reshape the coffee industry by improving the perception and quality of instant. Once again, Starbucks could change the way people drink coffee. If we could crack the code.

In 1998, on a shoestring budget, Don, Uri, and their small cadre of engineers developed something they had not originally been after: a coffee powder that, while not of high enough quality to fulfill Don's original vision, had another useful and lucrative purpose. Known internally as BBCB, the extract became the new coffee base for Starbucks’ blended Frappuccino beverages and, eventually, bottled Frappuccino, a popular product Starbucks and PepsiCo jointly produced.

Discovering this powder was no small achievement. Up until that time, our baristas had prepared every Frappuccino by blending extra-strong brewed coffee, milk, sugar, and other ingredients. The preparation was complicated and time-consuming, and as Starbucks’ Frappuccino business skyrocketed, simplifying the process to keep up with demand became a priority. The new powder reduced
Frappuccino's prep time and preserved its authentic coffee taste, as well as boosted the product's profitability. In fact, BBCB's benefit to the company was so significant that, by 2000, with Starbucks stores rapidly expanding outside North America, JAWS was put on hold and the R&D team's attention turned to scaling up BBCB's production for our Frappuccino platform of products around the world. This intense, five-year focus would take Uri and others to Europe, Asia, and South America. Eventually, working with manufacturers on two continents, Starbucks produced two proprietary soluble powders that are used for a variety of our ready-to-drink beverages and brand extensions, from flavored ice creams to coffee liqueur.

When Don retired in 1999 to spend more time with Heather and his two children and engage in charitable work, I felt as if a close friend was leaving the company. While he did not achieve the original goal he had set out to, Don's innovations were nonetheless invaluable to Starbucks. And even once he left, Uri and his colleagues did not let Don's original vision die.

By 2005 Starbucks’ ability to produce enough soluble powders for our global ready-to-drink and brand-extension businesses was at capacity. Not only were we seeking out additional sources of production, but also, in our quest for quality and efficiency, the R&D team was perpetually working to develop even higher-quality yet less-expensive soluble coffee powders. That year, the R&D team began a formal initiative to expand our pantry of soluble coffees.

In 2006 the team developed a three-year plan, and built into their schedule was an initiative to refine one of the soluble powder forms to such a degree that it could stand on its own when mixed and stirred with hot water. In other words, JAWS was back on our R&D radar. The work, which still needed to be conducted in secret, was renamed Stardust.

Later that year, I was preparing for my first trip to Africa. Not knowing where or if I would be able to find high-quality coffee as I traveled the continent, I asked the R&D department for a small sample of one of its soluble powders to carry with me. While it was not meant to be consumed raw, I assumed it would taste better than any instant
coffee on the market and certainly better than nothing. On the trip, I was delighted to discover that it tasted much better than I expected. Hardly perfect, but the team had definitely come a long way.

“How close do you think we are?” I asked when I returned to Seattle, wondering if Don's vision might finally be attainable.

“About 60 percent,” I was told. “Maybe 75.”

We had the technology to get us that far but needed to work with the right manufacturing partner to take us further. Intrigued, I set up a meeting to discuss what it would take for Starbucks to finally bring its version of instant coffee to market.

The seventh-floor Bella Vista conference room was crowded. Next to me, members of Starbucks’ leadership team sat across from experts from our R&D and coffee departments, including Andrew Linnemann, Uri, and Tom Jones, the current director of R&D. Tom was walking us through a timeline, explaining why a Starbucks instant coffee product would take approximately 32 more months to launch.

“Why must it take so long?” I interjected, sounding impatient. “If Apple could develop the iPod in less than a year, we can do this!”

I was frustrated by what I perceived as a lack of urgency, but at that point in time, January 2007, I was also frustrated by a variety of shortcomings at the company, many of which I would soon outline for the leadership team in the Valentine's Day memo.

Tom calmly articulated the reasons. Not only did the existing soluble powder need to be improved upon to be worthy of Starbucks’ high standards—the very code Don had been trying to crack—but there also were a host of complicated activities that had to unfold in parallel, activities the company had little or no experience doing at such scale and speed. If Starbucks was going to shock the market by introducing its premium coffee in an instant form, the company had to come together as never before, across business functions, to overcome logistical as well as perceptual hurdles. Planning. Packaging. Trademarks and patents. Manufacturing. Global production and distribution. Customer research. Testing. Integrated marketing, digital and promotional campaigns. Winning partners’ support. The product did not even have a name!

The elephant in the room, which no one spoke of, was that very
few people inside Starbucks wanted anything to do with instant coffee. The bias against such a down-market category was considerable; even our then head of US operations (a predecessor to Cliff Burrows) wanted nothing like it in our stores. Some partners even worried that being assigned to the Stardust project might hurt their careers at the company.