Starbucks’ First Store In Italy: Why It Signals The Brand’s Biggest Challenge Yet

Just hours ago, Starbucks announced that it will soon open its first Italian location in the city of Milan come early 2017.

Starbucks, a 45-year old company, has historically had a difficult time in Europe compared to the rest of the world, reports ABC. This is likely in part because the European cultures in which Starbucks has opened stores, including France and the U.K., already have very strong tea cultures and their citizens are hesitant to patronize a chain known primarily for its coffee – especially when the company is American, a fact that tends to rub European consumers the wrong way, points out The New York Times.

Starbucks did overcome the tea culture bias in China. In fact, China is Starbucks’ largest market outside the U.S., with 3,400 stores planned by 2019 and 500 more being built every year, but it did not have much substantial competition there, notes Forbes.

That point leads directly to the other reason Italy will be, as FOX News puts it, Starbucks’ “most intimidating market yet” — the Italian coffee brewing competition is extremely stiff. In even the smaller towns in Italy, one can wander from cafe to cafe, sampling the delicious cappuccinos, macchiatos, and espressos — all of which are Italian words — that have in most cases, been improved on over many years by the locally owned stores.

The deeply ingrained Italian coffee culture also places a heavy emphasis on “take-away” service, whereas Starbucks stores are designed for customers to sit and work while sipping their coffees.

Starbucks has managed to change its stores and business practices in some countries in order to cater to their markets, and sometimes it has worked. This could be the case, once again, in Italy. For example, Schultz has seen that Italy’s coffee shops generally have bars in them for customers to stand at while waiting for their espresso shots, and he has confirmed that the Starbucks stores in Italy will have bars as well. But whether or not Starbucks stores will be able to break into a coffee culture as fierce as Italy’s is yet to be seen, writes Seattle Times.

Some Italians, like Orlando Chiari, the 82-year old owner of a reputable coffee shop in Milan, and a true coffee traditionalist, doubt whether the first Starbucks in Italy – let alone the locations that are sure to follow – can be successful.

“We worship coffee in Italy, while Americans drink coffee on the go in large cups,” he asserts.

“It’s two extremely different cultures. I think young people will try it out, for curiosity, but I doubt it will become a major player in Italy.”

But the president of Percassi, an Italian coffee company with which Starbucks is partnering for its Italian crusade, voiced the organization’s confidence about its upcoming challenge in a prepared statement.

“We know that we are going to face a unique challenge with the opening of the first Starbucks store in Italy, the country of coffee, and we’re confident that Italian people are ready to live the Starbucks experience,” he said.

He went on to say that Starbucks was to enter Italy with “humility and respect,” which is not surprising for a coffee company entering the country that basically serves as the Mecca of Western coffee.

Breaking News: With Humility and Respect, @Starbucks to Open in Italy in 2017 https://t.co/JfVVW51qV3 #Italy pic.twitter.com/SIvlEdKUCl

— Starbucks News (@StarbucksNews) February 28, 2016

Starbucks CEO Howard Schultz says that although he knows opening Italy’s first Starbucks will be difficult and expansion within the country even more so, he is determined because, as ABC points out, the move is both meaningful and symbolic.

The reason is that Schultz was first inspired to get into the coffee business by all the great espresso he saw when he went to Milan and Verona during a business trip in 1970. He wasted no time once he got back to America opening the first Starbucks store in Seattle. Now, just over 35 years later, Schultz is leading his Italian-inspired business back into the country in which it first began, the CEO recalled in a news release yesterday.

“Starbucks history is directly linked to the way the Italians created and executed the perfect shot of espresso. Now we’re going to try, with great humility and respect, to share what we’ve been doing and what we’ve learned through our first retail presence in Italy.”

90 million people a week frequent Starbucks stores, said Schultz during his announcement that he gave in Milan yesterday. Can Starbucks add enough Italians to that figure to make its expansion into Italy worthwhile?

[Photo by Lisa Poole/AP Images]