CHICAGO (AdAge.com) -- High-end-coffee purveyor Starbucks is expanding its local test of Via, an instant-coffee product, from store locations in its hometown of Seattle and Chicago into mass retail. Costco and Target stores in the Seattle/Puget Sound area and the entire state of Illinois are now selling Via. Select Barnes & Noble stores in Illinois are peddling it as well.
As first reported by Ad Age, Starbucks introduced so-called premium, micro-ground instant coffee last month by selling Via in its stores and online. Via could also be found at certain Starbucks stores in London.
As part of the experiment, CEO Howard Schultz has said Starbucks is also testing the impact of marketing. Via isn't getting ad support in Seattle, but the Chicago market is flooded with outdoor work, sampling and animated TV spots from the retailer's ad agency, BBDO, New York.
Starbucks, which is preparing to launch a campaign positioning the brand as cheaper than most people think, plans to market Via as a way to drink Starbucks for about $1 a cup. The company estimates that the international instant-coffee market is worth about $17 billion, and it wants a share. In the U.S., Starbucks plans to use Via as a way to make up more of the 65 billion cups of coffee consumed every year. Mr. Schultz estimated that Starbucks has just 4% of the market.
At the company's annual investor meeting last month, Mr. Schultz said Via is the result of decades of trial and error. Don Valencia, a scientist and coffee enthusiast, approached Starbucks with the concept by walking into a Seattle store in the early 1990s. He had a meeting with Mr. Schultz soon after and was hired to run research and development. Mr. Valencia is credited with formulating Frappuccino in bottled form. He died of cancer in 2007, and the product is named after him.