More companies are moving to two-class business models — catering to a growing divide in income brackets. Essentially, it’s the difference between the dollar-menu and the deluxe package. Look no further than your local Starbucks, where they created an elite status for coffee drinkers. It’s called, “Starbucks Reserve.” Like our broader economy, it’s not made for everyone — intentionally.
Reserve drinks come in a black Starbucks drink sleeves which say, “Exotic, rare and exquisite coffee.” Today, I got to order one because I’m using a free drink reward from a 12oz bag of coffee. In a way, I’m circumventing the traditional class system of drinks.
Before choosing a Reserve coffee, the employee tells me she recommends the fancy-something-sundried-special-faraway-coffee. I’m out of my element, and gladly accept the suggestion. All I know is that I’m drinking something from Hawaii and it’ll be brewed on an $11,000 machine. It’s supposed to be good.
When I look up at the menu board above the employee, I gasp at the price: $3.95 for a tall (12oz) cup. At more than $4 per cup after taxes, the Kona Perry coffee is the most expensive coffee choice by far. A normal cup of coffee at Starbucks is half the price — about $2.
I’m was reeling at the exorbitant price. I thought, “How can someone spend $4 for a cup of coffee?” It’s then that I realize something stupidly simple. The economy is more divided than ever. Perhaps this an oversimplification, but the middle class is quickly disappearing. The popular buzzword is income inequality. Starbucks’s response is a new, atmospheric price structure that caters to the wealthy.
After a couple minutes, the barista says, “Sam, your tall Kona Perry coffee, brewed on the Clover machine, is ready.” I gingerly pick up the coffee and realize they’ve purposely advertised my status/drink to everyone in the building. While smart marketing, I’m frankly embarrassed by the complexity of my order. I feel like apologizing to those around me. “Sorry, it was free, I assure you I didn’t just pay more than $4 for black coffee!”
I take my first sip, and immediately notice how smooth it is. It tastes wonderful. For a moment, I imagine $4 being totally worth the expense (despite being more than my lunch on most days). I take another sip, and smile. I take another sip and realize how nice it is to pretend I’m wealthy for a day. This is the good life — for a moment.
As the drink disappears, it occurs to me that I don’t know how this compares to the lower priced Starbucks coffee. I’m not sure if I’m tasting class or actual quality. Is my mind playing a trick on me? Is the quality all psychological? Whatever the reality, I can’t afford this regularly. It’s a nice treat/aside from the everyday option. I see this as a growing business model for most industries (from airlines to restaurants to hotels). Unfortunately, as the economy becomes more polar and divided, so do consumables. Starbucks Reserve coffees are just a consequence of this income inequality.