Oprah and Starbucks, a Good Brand Marriage?
Since the published interview only contained a snippet from me, I thought I’d convey here the other thoughts I shared with her:
- The genesis of the partnership was Starbucks’ acquisition of Teavana, the 300-unit retailer of tea and tea products, in November 2012. It was an approximately $620 million all-cash deal and at the time, Howard Schultz said he wanted to “do for tea what Starbucks did for coffee” — i.e., make it a mainstream, popular beverage. The tie with Oprah seems to advance that vision.
- Starbucks is probably looking for a way to make tea seem more accessible and relevant to the mainstream consumer, who may view tea as a more upscale, exclusive beverage. Oprah appeals to a lot of different people, but her base is very mainstream, and so her endorsement of tea definitely helps.
- Regardless, this is a significant development for Starbucks, which as far as I can recall, has not used a celebrity (or any person’s name for that matter) on any of its products. Usually a company uses a celebrity endorsement to build its awareness and appeal, but the Starbucks brand is so well-known and so well-liked, it doesn’t need to rely on that kind of basic marketing tactic. In some regards, the pairing between Starbucks and Oprah may reflect the new direction that is emerging in celebrity/brand relationships. My recent Harvard Business Review post, Why Are So Many Celebrities “Creative Directors?”, discusses this.
- For Oprah, partnering with Starbucks enables her to get her brand back in the spotlight and ultimately people’s radar screens on a more regular basis. Now that she doesn’t have her daily TV show, this kind of high-profile and sustained exposure is important.
- But her involvement with Starbucks is more than a marketing play. Oprah has always made a priority to support communities and people causes, and for every Oprah Chai product sold, Starbucks will donate to the Oprah Winfrey Leadership Academy Foundation, which is dedicated to helping young women in Africa attend colleges and universities. So the brand partnership generates funding and awareness for Oprah’s priorities and casts a positive halo on the Starbucks brand, which itself is associated with using business to make a positive social impact.
So, bottom line, this new development does indeed seem like a good brand marriage.
Is it likely to generate huge sales results for Starbucks? Probably not. The demand for tea is unlikely to ever reach the level of coffee, regardless of how it’s promoted, And with everything else that Starbucks has going on (La Boulange Bakery food product roll-out, Evolution Fresh juice and smoothie development, soft drinks, etc.), it’s unlikely that the chain will sustain heavy marketing for Oprah tea long-term. But it seems a brilliant move to increase the appeal of tea, draw attention to Oprah and her cause, and keep Starbucks at the forefront of innovation.
P.S. Here are some handy links to learn more about Oprah Chai Tea:
- #OprahChai on Twitter