Starbucks begins dipping toes into market for instant coffee

NEW YORK - Starbucks Corp. began selling its new instant coffee online Tuesday, ahead of a nationwide launch to coincide with the company's first major ad campaign.

Customers will be able to buy packets of the new coffee in Starbucks' Seattle and Chicago stores March 3 and the rest of the company's U.S. stores in the fall when the advertising begins. Online orders will start shipping in March.

Chief Executive Howard Schultz said the gourmet coffee chain wants to change perceptions of both its own affordability and the quality of instant coffee.

"This is not your mother's instant coffee," Schultz said at an "unveiling" event for analysts and reporters in New York.

Called Via, the water-soluble product sells in packets of three for $2.95 or 12 for $9.95 -- $1 or less per cup. Just Colombia and Italian Roast varieties will be available at first, but the company will add others.

In addition to customers in Starbucks stores, Target Corp. and Costco Wholesale Corp. shoppers in Seattle and Chicago will be able to buy the packets in March.

Schultz told the Associated Press that the new product will help boost traffic in the afternoon and evening hours when customers are more mobile and possibly looking for just one cup of coffee rather than a full pot.

First, the company will have to replace the perception that instant coffee is more Maxwell House than coffee house.

"We realize [that] the connotation of instant in America and around the world is an uphill battle," he said.

The instant coffee's existence and launch was confirmed Thursday, It has already created a stir. Critics say the move smells of desperation as the chain closes locations in the U.S. and overseas and cuts up to nearly 1,700 jobs.

Andrew Hetzel, the founder of coffee consulting group Cafemakers, said the new product could denigrate the premium positioning that helped create the gourmet coffee industry and made Starbucks the industry leader.