This Just In: Coffee Addicts Drink More Coffee. Film At 11.

Great article in Slate today about the Starbucks reverse-jinx, wherein having a Starbucks move into your neighborhood actually improves the business of the local mom-and-pop coffeehouse.

When Starbucks opens a store next to a mom and pop, it creates a sort of coffee nexus where people can go whenever they think "coffee." Local consumers might have a formative experience with a Java Chip Frappuccino, but chances are they'll branch out to the cheaper, less crowded, and often higher-quality independent cafe later on.

Quite right. Another point which is hinted at in the article, but never quite explicated is the way that Starbucks creates demand which did not exist before. When Wal-Mart moves into the neighborhood, they don't really create demand. One doesn't go around, see a Wal-Mart, and suddenly think 'oh yeah - I really want a new pair of sunglasses!' Whereas, people who start really enjoying coffee as a result of the local Starbucks are a new customer, created entirely out of whole cloth, who might visit the local coffeehouse sometimes that they never would have done before.

It's sort of a 'rising tide lifts all boats' phenomenon. Starbucks continues to grow faster than the mom-and-pop outlets, but they don't care, so long as they're doing more business overall.

Another point, which is well-raised in the article, but really has been bugging me lately, is how exactly Starbucks fits into the 'mass production' market. When I go to Taco Bell, I know why I'm only paying $1.39 for a burrito - economies of scale (many outlets bargaining ingredient prices down), lower quality ingredients, and the use of poorly-trained laborers on an assembly line. You don't have to be a fine chef to grab the guacamole-dispensing caulking gun and make a 7-layer burrito.

Mmmm....7 layer burrito...

Anyhow, he says, wiping drool from his chin, Starbucks has the same idea: mediocre (albeit consistently so) quality coffee, prepared by a fairly untrained, poorly-compensated employee who is taught that all you have to do to make a shot of espresso is press the 'shot of espresso' button. Not to mention the 'opening 6 new stores a day' level economies of scale. Yet, somehow, with all these supposed competetive advantages, they still charge more money for an inferior product!

I'm sure an economist can tell me all about how Starbucks, having created brand recognition that would make Mickey-fucking-Mouse jealous, can get away with these sorts of shenanigans. I'm left deciding that this is yet another example of how the market theory of economics fails, mostly due to the fact that people are very poor approximations to the ideal consumer.

As an inveterate, unrepentant coffee snob, I love all of this. More coffeeshops, the better, as far as I am concerned. And if I can go to a bar now and order a halfway-decent cup of espresso, while Joe Six-pack mooingly waits in line for a nonfat-half-caff-venti mocha latte with sugar-free vanilla syrup, then more power to both of us.