Brand Watch: Starbucks

Access Confidential
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Lattes are alledgedly being underfilled at America’s favorite coffeehouse. A federal judge said this month that two Starbucks customers may pursue a lawsuit against the company for these particular underfilled beverages. In 2009, the coffee chain adopted a new latte recipe to help save on the cost of milk. The recipe purposely makes the latte 25% smaller than what is advertised on the menu.

The lawsuit states Starbucks knowingly engaged in false advertising and has committed fraud. The lawyers are demanding a trial by jury and seeking compensatory and punitive damages as well as restitution for all those affected.

Will Starbucks alleviate consumer concerns with some quick thinking damage control? We took a look to see how Starbucks filled its 2015 media plan.

  1. In 2015, the Seattle-based coffee retailer spent just under $100MM in national measured media.
  1. Over 30% of Starbucks’ media spend in 2015 was allocated towards magazine. 
  1. Starbucks decreased its total digital spend minimally from 2014 to 2015.

Will this lawsuit impact consumers’ brand loyalty? Will there be a decline in latte sales in the coming months? Will unfulfilled coffee enthusiasts head elsewhere?

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