Coffee Culture: Why Starbucks is Failing in Australia

It’s another Thursday morning at a Starbucks in Melbourne’s Central Business District. A relaxing time to gulp my morning caffeine before embarking on another busy day of wearing uncomfortable shoes and carrying expensive heavy equipment. As I answer my phone, I notice that the coffee shop is looking decidedly slower in pace. A couple of people are sitting on oversized chairs with oversized cups, but there’s no lines or baristas juggling trays of freshly brewed coffee. Because I’m running late and the espresso bar around the corner is packed, I decided to finally try this American chain of coffee shops.

A barista knows why Aussies don’t like their almond milk macchiato. The biggest roadblock for Starbucks to attempt domination is because Australia’s cafe culture is much better. It doesn’t take a genius to see where Starbucks went wrong in the Australian coffee market. Rather than building an organic demand for their coffee-flavoured slushies, Starbucks bombarded customers with premium prices for questionable cups of coffee. It also didn’t help much to offer confusing orders and samples. The international coffee chain launched its first cafe in Sydney in 2000 before opening outlets across Australia’s eastern coast. Eight years later, it had stacked up a total of $143 million in recorded financial losses and was forced to close 60 stores nationwide. Unlike every other country in the developed world, Australia just does not do Starbucks.

Thanks to the Italian and Greek immigrants in the early 1950’s, Aussies adopted the art of espresso drinking much earlier than the Americans. While Starbucks introduced Americans to a version of coffee shop culture, Australia was already well ahead in advance. There are as many as 10,000 cafes in Australia. There is no square of urban real estate without a decked out coffee shop, an espresso machine, and iconic seating areas. Starbucks was revolutionary in America because the market is more accustomed to faster services. Since Australia already had a well established cafe culture when Starbucks arrived, it had to compete with cafes that provided a similar experience of equal or better quality. Aussies love to socialise around food and coffee, so it suits our relaxed lifestyle if we kept our own cafes over Starbucks.

I think we have really embraced coffee as part of our social fibre. For Aussies, cafes act as community hubs, so an independent cafe is more able to match the needs and culture of its community than a chain store like Starbucks which imposes itself onto its communities. Many of the cafes in Australia are independently owned, so many Aussies took a moral stance against the Starbucks invasion. No one I know would like to see a new Starbucks open in their neighbourhood.

When it comes to coffee, many Australian cafe owners believe that the drink does not have to be massively produced or inferior to the social experience.  We might not have a rigid food culture, but we are open minded about trying new things that will enhance our experience with our coffee.

As a result, it doesn’t help Starbucks that most of us can taste the difference between their sugary excuse for coffee and the real thing. Knowledge of “good coffee” has grown in recent years, with the average Joe telling you a lot more about their cup of coffee than you’d expect. Many independent roasters run cupping events, which is like wine-tasting but with coffee, as well as coffee appreciation courses.

When it comes to all-round coffee snobbery, it would probably be more representative to have the blokes from Starbucks discussing vocabulary of new concepts for sizes rather than coffee. A good blend can be subjective, but for me it needs to have good body and boldness. It must have presence when served and it also has to have a certain complexity and structure, so it engages me from start to finish. For many of my friends, they want it to have a combination of sweetness and acidity which makes a good coffee’s character.

While that Starbucks that I went to looks less than certain, there is one area the super chain can win. I don’t usually go to Starbucks, but  if I go again, it would probably be at an international airport, and I didn’t have any other choices available. Even a carefully executed business plan won’t bypass the biggest roadblock in Starbucks’ attempt for domination – Australia’s cafe culture is WAY too good!

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