SEATTLE (TheStreet) -- You'd think that I would be biased against Starbucks (SBUX) CEO Howard Schultz, former owner of the Seattle SuperSonics. I'm a sports fan living in the Northwest, still angry that Schultz shipped our team away to Oklahoma City. Now we get to watch our Sonics compete for a NBA championship from somewhere in the Midwest.
As for his coffee, Schultz has me for life. It's a rare day that I don't have my Venti-Vanilla Mocha. (Please, don't judge me.) I love how you can count on the taste of that particular drink to be the same in Seattle as it is in Phoenix, or Oklahoma City. Like clockwork, I can always depend on sitting in a loungy earth-toned chair with just a hint of pretentious ambiance, drinking my gallon of caffeine while catching up on all the Facebook/Twitter posts I've missed during the previous few hours.
It's my moment of Zen. Also, how can you not respect a guy who has built an empire out of a commodity that is largely water?
Starbucks recently opened its 20,100th store. That's quite a footprint, as the marketing executives like to say. There are few markets on the globe that haven't been sucked into Starbucks' caffeinated vortex of awesomeness. Just think, right now there are people in Europe, Asia and Africa all ordering the very same drink I did at a Starbucks store nearly identical to my own. It's nothing short of global peace through caffeine.
But while Starbucks' net profit rose a handsome 11% during its recently completed fiscal second-quarter, I have to question the company's move into selling tea. Irish Coffee is one thing -- I do like the proposal to start serving alcohol -- but I can't get my head around the mainstreaming of tea. Sure, Oprah Winfrey has been touting the benefits of tea from her many public platforms, but I can't image that there are really aren't enough tea drinkers out there to make it sensible for a global retailer like Starbucks to get into that business.
When Schultz spun coffee into a way of life, it was something people that already had wide appeal; it was simply hard to find a good cup of coffee once anyone left an urban center, or the college neighborhood of any urban center. Schultz made it better for the mainstream and most importantly, created a culture around it. When it comes to tea, though, Schultz appears to be assuming that Americans will change their drinking tastes or that tea drinkers will come out of the woods for a daily cup.
Starbucks shares have lost 9.5% in 2014, trailing the S&P 500 Index
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV