Starbucks has a bit of an elitist reputation. The chain has always been true to its Seattle roots and its coffeehouse tradition.
Coffeehouses aren’t bars. They’re places famous for being filled with wannabe writers typing away at their take on the Great American Novel while sipping espresso-based beverages.
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The classic coffeehouse hosts poetry slams and acoustic guitar players. They might offer a book club, backgammon boards, and chess sets along with other semi-elitists airs.
Starbucks (SBUX) comes from that tradition even if it has generally stopped short of offering poetry slams, live readings, or acoustic music. The chain still charges top-tier prices, and offers plenty of fancy drinks that draw on its Italian inspiration.
That’s not to say Starbucks doesn’t court every customer. The chain sells a lot of Frappuccinos. which are essentially milkshakes, as well as lots of other nothing-to-do with coffee beverages, but it’s still largely seen as a higher-end chain that courts upscale customers.
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In theory, that leave Starbucks vulnerable to competitors which use more of a blue collar model. In reality, though, efforts from both McDonald’s and Dunkin’ to bring fancier coffee to the masses may have increase their sales, but not done much to market share from Starbucks.
Similarly, chains like 7 Brew which embraces a wide-range of sweeter and non-coffee drinks, lack the scale to threaten Starbucks’ thrown. A new deal, however, could be the first step toward changing that.
Starbucks certainly has drinks not aimed at coffee snobs.
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Walmart has struggled with fast-food partners
Walmart has always had a few stores-within-its-stores. It used to have hundreds of McDonald’s locations, but that partnership has been scaled back as has a similar deal with Subway.
The chain has experimented with adding sushi in same locations as well as fast-food chains like Taco Bell and Domino’s. Now, however, it may have stumbled upon the perfect partner.
7 Brew takes the coffee model and modifies it. The chain offers drive-through-only locations with its 7 Originals — coffee drinks that are all sweet concoctions — along with a changing array of beverages including everything from energy drinks and Italian sodas to smoothies, teas, and lemonades.
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The company, which now has over 375 locations, grew out of a simple idea.
“7 Brew was born from a desire to change drive-thru coffee into a fun, mind-blowing experience for everyone. We dreamed of serving premium coffee in record time and making new friends while we’re at it. The dream came alive with our first ‘stand’ in Rogers, AR and our 7 original coffees,” the company shared on its website.
Walmart enters the high-end coffee game
7 Brew has grown quickly using a very simple model and very low-tech. It does not offer an app, but does have a loyalty program tied to customers’ phone numbers.
The chain does not even detail that program on its website, but every now and again customers earn a free drink. 7 Brew does not even offer a full menu at its stores.
You can see signs promoting seasonal and specialty drinks, but need to scan a QR code in order to bring the menu up. Lines can get quite long at the dual-drive-thrus, but workers take orders up and down the line via tablets and everything moves quickly.
Now 7 Brew has a new model, a walk-thru model in the Springdale, Arkansas Walmart. That may seem like a small thing, but Walmart and 7 Brew may be the perfect operating partners at just the right time.
The coffee chain offers an affordable indulgence that’s more accessible than the Starbucks menu. It’s “7 Originals” offer choices for people who are not traditional coffee drinkers.
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It’s very easy to see Walmart, customers, embracing the idea of having a drink from the chain to either start or end their shopping journey.
And, while it’s a reach to think that these sales could someday impact Starbucks, Walmart is one of the few brands that could offer that scale. This is a single coffee shop in a single Walmart, for now, but the potential for this to be a disruptive partnership is very clear.
