Learn, Make, Learn

Starbucks Follow-Up with Zoran Svetlicic

• Ernest Kim & Joachim Groeger • Season 1 • Episode 30

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We're joined by Zoran Svetlicic for this fast follow-up to our previous episode on Starbucks’ struggles. A strategist & builder with deep expertise in brand and food & beverage, Zoran pulls no punches in his diagnosis of Starbucks’ ills. And, along the way, schools us on positioning, brand architecture & natural wine.

INTRO & FOLLOW-UPS – 00:39
Starbucks’ Struggles and Lessons for Product People

MEET ZORAN + CONTEXT SETTING – 04:09
Zoran Svetlicic on LinkedIn
Third-Wave Coffee
NYT Books review of Seeing Like a State

DIAGNOSING STARBUCKS’ STRUGGLES – 11:56
Mark Ritson: Starbucks needs to cut the crap from its brand positioning
Brand Architecture
Nestlé Takes Majority Stake in Blue Bottle (paywall)

STARBUCKS RESERVE STRATEGY – 25:17
What is the Starbucks Reserve brand — and where is it going?
Traditional vs. Occasion-Based Segmentation

HETEROGENEITY AT SCALE: McDONALD’S – 32:45
McD’s passes Starbucks as world’s most valuable restaurant brand
McD’s Just Dropped a Happy Meal Collab Straight Out of the ’90s
Why The French Love American Fast Food
For Some Travelers, McD’s Is a Destination (paywall)

GLOBAL + LOCAL: COCA-COLA – 42:12
Coca-Cola Visual ID: Before & After
We leverage design to create simplicity: David Butler
Share a Coke campaign learnings

LESSONS FROM NATURAL WINE – 55:31

RECOMMENDATIONS – 01:05:16
Raisin
Piquentum Wines & Label
UNSTUCK newsletter
M5Stack Core2
Yowana & Supwell

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Rant, rave or otherwise via email at LearnMakeLearn@gmail.com or on Threads @LearnMakeLearnShow.

CREDITS
Theme: Vendla / Today Is a Good Day / courtesy of www.epidemicsound.com
Drum hit: PREL / Musical Element 85 / courtesy of www.epidemicsound.com

Ernest:

hello and welcome to Learn Make Learn where we share qualitative and quantitative perspectives on products to help you make better. My name is Ernest Kim and I'm joined by my friend and co-host Joachim Groeger. Hey, Joachim, how's it going?

Joachim:

I am very tired. It was a very long week. I'm recovering. We'll see how this week goes. I'm already, I'm already dreading it. But anyway, how about you Ernest?

Ernest:

actually I'm pretty tired as well. I, uh, stayed up way too late prepping for this episode, but, um, I'm charged up because... this is episode 30 and it's probably the closest thing we'll ever have to an emergency pod. Uh, which is something I've always wanted to say: This is Ernest and Joachim coming at you with an emergency pod. You know, I don't think our area of focus is ever gonna warrant an actual emergency podcast, but, um, this, isn't an episode that Joachim and I had planned for. Instead, what sparked it is that, uh, the day after we published the most recent episode titled Starbucks Struggles and Lessons for Product People, good friend and former colleague of mine named Zoran Svetlicic wrote in with some fantastic follow-up commentary. Now, Zoran is a true brand geek with hands-on experience in the food and beverage industry, and it was clear to me straight away that the thoughts and questions he posed in this email could spark a great follow up episode. Uh, now, is actually based in Croatia, which is longitudinally speaking, quite literally the other side of the world from the Pacific Northwest where Joachim and I are both based. Remarkably, the planets have aligned and we were able to schedule a conversation with Zoran, which you'll hear in just a minute. But before we dive into our Starbucks follow up with Zoran, I wanted to emphasize that we want to hear from you. If you, like Zoran, have thoughts, questions, or concerns you'd like to share, please send them our way at Learn make learn@gmail.com or on threads at Learn, make, learn, show, all one word. And you know, who knows, we might end up recording an emergency episode with you as well. Um, now, uh, just one last bit of business before we get to our interview, and that's follow ups specifically. Just two quick corrections, uh, from us. Uh, Joachim and I both suggested in our last episode that Naomi Klein, who authored the book, no Logo amongst many other works, was also responsible for Adbusters Magazine. In fact, Adbusters was founded by Kalle Lasn and Bill Schmalz in 1989, a decade prior to the publication of No Logo. While Klein and the team behind Ad Busters certainly shared a lot of ideological common ground, she didn't start the publication, uh, nor did she have any direct affiliation with it. Second, uh, I incorrectly suggested that Adrian Brody had appeared in an alien predator crossover movie, terrible.

Joachim:

Shame on you Ernest.

Ernest:

In fact, Joachim was correct in his recollection that it was actually a predator specific film, Predators, which debuted in US cinemas in the summer of 2010. in that film, Brody plays a character named Royce, so apologies for, for those two errors.

Joachim:

Also to, to make proper amends, I should say. Predators isn't a bad movie as well see everyone should go out, supported on Hulu or whatever on some streaming platform to make, make up for this terrible error so

Ernest:

I agree. Yeah, yeah. You could see, go watch Predators and then uh, you could see this Badlands movie that's coming up, uh, pretty soon as well.

Joachim:

Actually before Predators: Badlands is Prey. The same director did

Ernest:

Right.

Joachim:

Prey, which is a, a very focused predator movie. Closer to the original Predator movie. It's very good. It's very, very good set in the seventeen hundreds, Native Americans are the primary protagonist in this. I would recommend that. I know we're not in the recommendations phase, but this, this lends itself perfectly to that moment. Sorry.

Ernest:

No, that, that's a good one. I agree. Alright, now let's get to our main topic and welcome in Zoran to Learn, make learn. Zoran, welcome to the show.

Zoran:

Thanks guys. Thanks a lot for having me and, uh, for letting me dial into a show about Starbucks from probably one of the only countries in Europe that actually does not have Starbucks in it. And we've, we've resisted the, uh, invasion here in Croatia.

Joachim:

Wow.

Ernest:

I,

Joachim:

Is

Ernest:

yeah, I had no idea.

Zoran:

It is, it's sort of like one of those World War II maps, you know, like they're at the borders, you know, like they're in Hungary and I think Slovenia and Italy and like we've, we've, we were like holding the front so far in terms of coffee culture. So let's see. Let's see how long it lasts.

Joachim:

not a conscious thing. Right. It's just that they're not capable able to get a foothold. I'm so interested now.

Zoran:

I don't know. I mean, I think, you know, if, if I'm probably honest, it's probably, you know, a, a a tiny market that's not, you know, on the top of their agenda. It's like, you know, 4 million people or so. But on the other hand, I think they've opened up in Slovenia, which is like half the size. So, you know, there's, there's a lot of tourism here too. So I, I don't know. I don't know. There certainly is a very strong coffee culture,

Joachim:

Yeah.

Zoran:

which maybe they, they, they take into account. But look, they're in Italy, uh, you know, across the sea. Uh,

Joachim:

a

Zoran:

they're in Austria. Uh, so, so I don't know. We're, we're still holding strong.

Ernest:

Uh, well, so that's something we'll dive into more as well, that, uh, just kind of coffee culture and Starbucks. But, um, in our intro I mentioned that you, Zoran, uh, are a true brand geek and have hands-on experience in the food and beverage industry. To be specific, you've been working in advertising and brand consulting for almost 30 years and also run a natural wine distribution company in Singapore. Uh, on, on top of all that, you also write an influential newsletter on sustainable food. Could you share a little bit more detail on your work in these areas?

Zoran:

Sure, sure, sure. Yeah, that's right. So, uh, you know. I am sort of a accidental marketer and brand person because I originally studied and trained in computer science, but I, I was sort of led astray by, uh, a, a marketing professor, uh, who I took an elective with in, in, in undergrad, uh, that maybe we can actually come back to later in the discussion. So, you know, it's been a, uh, you know, the, the branding and marketing stuff has been, you know, super interesting, um, you know, over the past few decades. So from, you know, the U.S. uh, to Europe, to Asia, uh, you get to kind of learn a lot about, you know, a lot of different industries, lots of different consumers, lots of different problems. But I think a lot of time it's also, you know, as, as, as I'm sure you know from your experience in consulting it, it can also feel a little bit abstract. So, uh, a few years ago I started dabbling in food and wine together with, uh, my wife. It was of course, actually her idea as most good ideas in our marriage and relationship are. Um, and what has, you know, what sort of started off as a hobby has now become, uh, more serious. And we represent close to 30, uh, natural winemakers, um, in Singapore. Uh, and that's really opened up kinda a whole new world to us. That's a sort of a very grounded, literally very grounded world. Uh, that's, that's a been different from kind of the corporate, the corporate stuff. Um, and, and I, I would also say that probably over the years I've put more than my fair share of, of CO2 into the, into the atmosphere. So I am repenting for those sins, um, with a newsletter that's called Unstuck, uh, that I write with, um, a former client, uh, and super talent, super smart co-author and sort of thinking partner this is Jennifer Woollford. So that's kind of broadly what I'm up to these days.

Ernest:

something we've, I think both hinted at a little bit is that our relationship goes way back.

Zoran:

Yeah, I mean, I think it was probably when we were opening up, uh, Organic Chicago. I think you were recruited from New York and I came in from Fallon in Minneapolis. And um, I think that's, from what I've remember when I, when our paths crossed, it's probably 98, something like this. Yeah. Really dating ourselves here.

Joachim:

What was the

Ernest:

yikes.

Joachim:

Chicago Organic. Is that what you said? Zoran?

Zoran:

Yeah. We were, we were opening an office for a digital, I mean actually probably the first digital agency, uh, in the world. That that was its claim to fame, uh, claim to have invented the banner. Um, so there you go.

Joachim:

it.

Zoran:

The banner ad? Yes. Uh, yeah. I think they, they actually shared an office with Wired, uh, in San Francisco, and that was like one of the first websites, and I think Volvo was the first client and they tried to figure out how to charge them for advertising. So they kind of stuck on this little thing on top of the, on top of the page. And that was, that was the banner. And I think that format, I mean, I don't know if it still exists. It's like, what is it, 468 by 72 pixels or something like, like that's, that maybe is still around right. From like early nineties. So anyway, so they, uh, they recruited a bunch of us from kind of different agencies around the US to start their Chicago office. Uh, and I think that's, was, that was, yeah.

Ernest:

that's right.

Zoran:

that was when we, that's always when we, when we crossed paths. Yeah,

Ernest:

and you just reminded me that Starbucks was a client of Organic.

Zoran:

That's right. The, the third space. Yeah. That was one of the first clients. Yeah. Yeah.

Ernest:

so this history, um, and Zoran's background is why I thought this would be a great conversation, but I also thought Zoran and Joachim would get along really well. I think, uh, you guys share a lot of interests. Uh, one of the things that Zoran remarked on, um, in his follow up email to me was, his shared interest in Prussian forestry practices, uh, Alright, so in our previous episode titled Starbucks Struggles and Lessons for Product People, Joachim and I talked through what we saw as the key whys behind the decline of Starbucks in recent years. And one thing we focused on was the parallel rise of local, independent coffee shops that have embraced the concept called third wave coffee. Now, there are lots of definitions for what exactly third wave coffee is, but I'd say that in an overarching sense it's rooted in viewing coffee less as an industrial commodity and more as an artisanal good akin to wine. And, like wine, third wave coffee places, much greater emphasis on where the coffee comes from, how it's grown, how it's harvested, um, to ensure that the unique character of that coffee is maximized. Part and parcel to this is the recognition that coffee isn't just coffee. It can vary wildly from region to region, farm to farm, year to year. And that's before it even gets to your local cafe where the way the beans are roasted and brewed will, you know, obviously influence the way that the coffee ultimately tastes. Now with more and more people around the world experiencing the joys of third wave of coffee, Joachim and I surmised that the things that had been strengths for Starbucks, its scale and the kind of globalized homogeneity of its coffee and in-store experiences, had become weaknesses. Joachim, does that feel like a fair synopsis of our conversation last episode?

Joachim:

Yeah, I mean, since we alluded to Prussian forests, it, it's the idea of monoculture that, uh, an organization itself should not be a monoculture that

Ernest:

Hmm.

Joachim:

does rinse and repeats the same thing. Invades a country does the same thing and expands, expands. So yeah, this, this notion of homogeneity was kind of the theme that we were picking up on in our, in our conversation.

Ernest:

Right. now I, I thought it was important to share that context because, uh, Zoran actually listened to that episode. Like I said to him, you are the one listening. and then followed up with some really great thoughts via email. So, Zoran, what's your take on Starbucks Struggles?

Zoran:

Well, I think there is homogeneity, there's heterogeneity, and then there is just plain old bullshit. And by the way, I've gotten official permission to swear on the podcast. So, uh,

Joachim:

that.

Zoran:

uh, yeah, so I think, I think if you take a look at Starbucks from a brand lens, you can kind of break it down into a couple of pieces, may, maybe three kind of big pieces, right? Like there's the, the kind of the brand positioning or the kind of the, the idea, the core idea that, uh, that they say is kind of behind the brand. There's the, the brand architecture, so kind of the relationship between the different bits, and then there's some of the, the brand partnerships that they do. And, and maybe we can go into kind of each, each, each one of those quickly. So I think if you just start with the brand positioning, uh, which is we nurture the limitless possibilities of human connection. Let, lemme repeat that word from word, from their press release: We nurture the limitless possibilities of human connection. It's like, no, you don't, you sell buckets of milk with burnt, like over roasted coffee in them. Like, you know, again, like I, I just dare you to find a single real human being who wakes up in the morning and asks themselves, where should I go to nurture the limitless possibilities of human connection today. Like that is just removed from reality. Uh, and kind of what I, you know, what, what, what this brand offers and what the experiences and what the, what, what, what the, you know, what, what the product is. So I think if you want, uh, a more detailed and much more. How should I put it? Colorful analysis of why this positioning is complete nonsense. You should check out a column by this guy called Mark Ritson, who was actually the undergrad professor that got me into marketing all those years ago. Uh, and, and we'll try and stick a, a, a link into the show notes for that. But the, the kind of, the short version of the argument I think is that Howard Schultz, the, the kind of the, the, the CEO and founder or kind of one of the early guys got so rich in the, in the process and expansion of Starbucks, that that, that he just sort of really drifted away from reality. Uh, and I think started thinking about not customers and kind of product and experience and brand, but more about, you know, his legacy. Uh, and I think once you kind of unmoor your brand from that, that kind of connection and that that reality to that sort of just customer reality, I think you are. Your team starts sort of drifting off into the random, contradictory, non-coherent directions that I think you've, you've already described in the, in, in the previous, you know, episode with the, you know, the third space and the, you know, the online ordering and the, you know, the optimization, all, all of that stuff. So I think that's number one. This, this kind of ridiculous positioning. Right. And maybe that's the obvious one. I think the second bit I.

Joachim:

uh, sorry, uh, Zoran, that's quite a, that feels like a, big point that you just made, which is the success of the founder. The CEO creates, you know, we've, people throw these phrases around reality distortion field, or you get untethered and unmoored. It's very difficult at that point when you're the top of this gigantic, multi-billion dollar operation, to have any meaningful signal anymore because everyone's just trying to feed you something that makes you feel good as opposed to anchoring you in the reality of what the business is. And then you start going off into a, the, the nether. It feels like, it feels general, it feels like a lot of people. We could name other CEOs that are kind of heading into those spaces, I feel like, but yeah.

Zoran:

Yeah. Yeah. Or, or, or presidents or prime ministers or, yes. You know, like it's, I think it extends beyond, beyond corporate world. Uh, uh, so yeah, but I, I, I think it's a, you know, it's, it's, it's not a, it's not a unique phenomenon or, or kind of case. And so I think, I think it's, there's a pattern in that. Um,

Joachim:

Yeah.

Zoran:

and it could probably be a whole nother discussion in terms of how you kind of keep that grounding. But, but I think just, again, from a brand perspective, the second thing I, I, I point to on Starbucks is the, uh, is, is, is the brand architecture. And, and this, you know, I guess maybe I'll, I'll sort of start a little bit tangentially and kind of, kind of bring it back to, to the, to, to the Starbucks thing. But about 10 years ago or so, I was working on a, on launching, uh, a brand of instant coffee into China. So it's kind of a market entry project. And, uh, so very much sort of, I would say not even second wave coffee, probably first wave coffee, right? Like, uh, you know, kind of, you know, powdered instant stuff. Uh, but the client also happened to own a cafe in Shanghai. And, you know, we were meeting, chatting about stuff, talking about the project, and you know, we went in and he asked me kind of what I wanna drink, and I was like, oh, you know, I'll have a latte or flat wine, or whatever it was. And, and he said, okay, you can, but let me, let me sort of give you something to try and I bet you once you try it, you will never go back to this kind of, you know, weak, milky stuff. And I was like, okay, yeah, whatever, you know, like, fine, like, you know, try me. Uh, and, and they, and you know, he got the, the, the barista guy to make, you know, for, for me it was the first time I, I, I tried, a V 60, like a pour over coffee, you know, like kind of a well crafted, like perfectly measured whatever, 15 grams of water at 93 degrees to a, you know, gram of like all of that kind of geeky coffee stuff. And I tried that and I was like, oh my God, you're right. Like this is, this is amazing. Like, I think that was the first time I tasted sort of, you know, clarity and the personality and something non-generic in a coffee and, and, and it sort of really, he was right. Never went back and, you know, sort of started getting the gear and kind of all geeking out and all that stuff. So, and I, and I think, you know, this was sort of China Shanghai 10 years ago. I mean, it probably hit, I don't know, London 10 years before that. Right. Or US kind of even before. Right. And, and I think Starbucks had totally missed this third wave of coffee. For a very, very, very long time. And I think they sort of finally woke up to it. I, I don't know exactly when Observe do the research, but, uh, when they started doing the kind of the Reserve,

Ernest:

Right.

Zoran:

um, uh, sort of sub-brand or, or, or outlets, but at that point I think it was just too little, too late. And I, I remember, I remember distinctly going into, uh, a sort of a Starbucks that had a Reserve in, in Seoul, uh, which by the way is the number one city in terms of Starbucks outlets in the world, right? The Starbucks so is bigger than New York and London or anywhere in the US and the Reserve Bar, it sort of looked interesting, but the Reserve Bar was kind of one side of the store and, you know, the regular Starbucks on the other side, and the Reserve side was empty. And I was just kinda like looking around like, what's this? What's this? And then, uh, what ended up happening is that the guy from kind of the re the barista from the regular side of Starbucks eventually walked over and, you know, sort of pulled, pushed a few buttons and kind of made the special Reserve coffee and just the, the kind of, the whole illusion of this being kind of a different, you know, more premium, more thoughtful, more crafted experience was completely shattered, right? Because it was the same guy that pushes the button on the espresso machine, on the regular Starbucks side that's doing the same, you know, that, that, that, that's doing the same, relatively the same ritual, maybe with slightly better coffee on the, on, on, on, on the Reserve side. And I think, I think it was just very, very poorly thought through in terms of just that, that that relationship, like what was it supposed to do? Was it supposed to sort of upgrade and kind of provide a halo and elevate the whole Starbucks experience? Was it supposed to be its own thing? Uh, just that I think that relationship was unclear. And I think maybe the two sort of equities were quite incompatible. Uh, uh, and you can, you can maybe see a different approach. That's, I, I, I don't know these, but maybe it works better in the, in the sort of the Nestle acquisition of Blue Bottle, right? So they bought it pretty much left it alone, right? Like you don't mix Nescafe and blue bottle, right? Those are two different worlds. So different occasions, two different needs, two different mentalities to, so, so that there's that, that brand architecture piece. And I think for me, maybe the third one, which just really ruined Starbucks for me, was, was sort of their, uh, sort of brand partnership strategy, right? And I think, uh, this was, uh, this was sort of a, a decision they made sort of also roughly around the same time where they literally got, got into bed with the devil, and by the devil, I mean Nestle and Pepsi, right? Uh, uh, they signed, uh, a, a deal with Nestle in, in 2018, I think, where they paid them 7 billion plus for the rights to sell Starbucks branded coffee outside of their cafes. Right? So just, just, you know, uh, uh, sort of, you know, think about that, right? Like basically they've allowed the maker of instant, like the most basic, uh, least, least thoughtful, least crafted coffee in the world. Nescafe to take their brand, strip it of any kind of service, any kind of, you know, environment, any kind of third space stuff that they've based their brand on and stick it into a supermarket. Right? And then, you know, you, you, you buy it on, you're left of your own devices, but the mermaid's still there. It still says Starbucks, right? And you have a completely different experience. And I think, and I, and just to kind of add insult to injury, I think a couple years later they, they sort of partnered with Pepsi as far as I understand to make, uh, ready to drink beverages. So again, Starbucks. Yeah, Starbucks brand. Pepsi makes it. You can get a can of Frappuccino or whatever it is in your, in your 7-Eleven, like, how does that make you feel about, you know, this, this kind of third space, you know, special, you know, special crafted brand that, that, you know, that, that, that, that they talk about. So, so, so for me, you know, in addition to all the kind of customer experience kinda product issues that you guys talked about, I think there's these, these kind of three brand decisions. So this kind of very unclear, amorphous positioning, this kind of very confused response to third wave coffee. And then these, these, you know, financially very lucrative, you know, short term partnership decisions. But I think in the longer run, very, very sort of brand dilutive, um, that, that, that, that are maybe part of the, uh, the story and the issues that, that they have now.

Joachim:

Yeah, it's interesting, your last point. Um, so I've been struggling generally when I'm thinking about some of the consulting work that I do on the side or in, in everyday corporate jobs. It's very difficult to get people thinking about the long run. But it certainly feels like brands are intuitively understood to be long lasting, long lived entities. it feels like you, the brand consultant or someone operating in your space has the power to get people thinking about that long run it's something about this, the reputation and the brand reputation and identity that allows people to think about the long run. Because as you said, do I want the mermaid to be in the 7-Eleven, that sounds very unromantic, but if you see only number and number go up, very easy to detach it from the actual customer experience that comes in, which comes back to the earlier point. You're not actually imagining what it'll be like as a customer going into a 7-Eleven, someone who likes Starbucks, and then they just kind of see these cans of Pepsi made Starbucks drinks in the 7-Eleven. It might tarnish your relationship with that brand in a way that is, you know, would take a long time to repair again. Brands feel like the ideal lightning rod for those conversations. Like, do you want this thing to be stripped of what made it special in the first place? Sign on a dotted line. You can do that. You'll get the money up front. Great for the shareholder for that quarter or two, but in a year people will think of you as just trash in some sense.

Zoran:

Yeah, I mean, it's not easy to say no to 7 billion either, right? So, I mean, you know, you can, you can, you, you, you know, you uh, it's difficult to argue with just kind of, you know, fluffy, sort of mermaid stuff against 7 billion, right? So I think, so there's, there, there, there's a, you know, I think, I think there's a, uh, you know, there's sort of a, a business case or, you know, business driven way to kind of think through some of this brand stuff that can, uh, kind of with the right, uh, you know, sort of right analysis and right thoughtfulness, uh, maybe help, help people make, make better, better decisions. But you're, you're, you're absolutely right. I mean, it is, it is about the long term. Just think of something like PanAm that hasn't been in business since probably, I don't know, eighties, nineties, but we probably still have like associate, it probably still lives in people's heads. Right. And you know, some guy bought it to sell t-shirts, right? Like it still has equity. So, so, you know, it it, it does, it does, it does endure.

Ernest:

I was interested in the Reserve point that you made. Um, you know, you talked about Blue Bottle and Nestle, and I think that approach that they've taken where they're very hands off makes a ton of sense, particularly for Nestle, in that they've always been a company that's approached, that's had a more portfolio brands approach Starbucks, which is more of a one brand architecture. And so, you know, I could see the rationale there to say, oh, we, yes, we missed the third wave coffee—we were late to it. So how do we try to, uh, tap into it? Well, we'll create this sort of halo sub-brand within our overarching Starbucks, you know, brand, rather than creating this offshoot. But what's, what I was kind of surprised by in the recent moves was that Starbucks actually closed their two Reserve locations in Seattle as part of the overarching store closures in the US. Uh, I think a lot of people were surprised at by that because those locations were quite popular. They did, they did really well. They were kind of seen as tourist attractions um, I was just curious to hear your thoughts on that. I mean, I, I have some thoughts as well as to why they might have done that, but I was, curious, do you just see that as them maybe recognizing that this is sort of a lost cause at this point for them?

Zoran:

I mean, I, look, look, I, I, I don't know the numbers and kind of the, uh, yeah, the, the business case behind it, but I think, um, you, you, you have to, you have to make these brand architecture decisions in the context of kind of category and customer needs. And I think if you make a kind of this, this kind of Starbucks kind of Starbucks plus Starbucks plus plus type of model, but it has to fit with how people actually consume your product and, and sort of interact with your category. So I think that kind of brand architecture model, I mean, you tend to see it a lot in, in, you know, categories like financial services for example, right? So you have, you have kind of what they call a, a wealth escalator, right? So you start with regular Citi account and you get Citi Plus then, you know, once you have, I don't know, 250 K, you get Citi Gold. Once you make your first million, you get Citi, you know, Citi Gold private client. Then once you, you know, kind of 10 million plus, then you're, then you're a Citi private bank, right? And there's that, that kind of journey over time. And maybe there's something aspirational that kind of pulls you up that escalator, right? With, with coffee or kind of food or fast moving consumer goods. I'm not sure that's. Right. I mean, I, I don't know. There, there might be, there, there might be sort of different occasions where you might want, you know, your pumpkin spice latte for Halloween, and then you might want your, I don't know, whatever, you know, natural geisha, you know, V60 from small, some small lot guy, whatever. But you kind of, you kind of bounce around, right? Like, there's not that kind of natural progression over, over time. And I think maybe, maybe kind of a, a kind of house of brands or multi-brand brand architecture can kind of help target those needs more effectively, which is maybe why you see it, you know, you see it in, you know, Unilever, P&G, Nestle, those guys, right? Like they have 10 different detergents, but they kind of target different occasions. It's not like detergent basic plus, plus plus. Do you know? You know what I mean? So, so I, I, I, I don't know, I, I don't know if they, they've thought through that. I think, I think for me, just the, the whole reserve thing within Starbucks was just a... Just a big fail from that, from that just kind of initial experience, but also maybe it sort of, it never made me feel better about Starbucks. It also made me feel worse about it. I sort of feel like, oh, okay, and then like, there's this temple that you've built, but actually what's, what's accessible to me on a day-to-day basis is kind of Starbucks minus, do you know what I mean? Like, not a, not not a Starbucks plus. So, uh, maybe the, in their drive into, into to kind of simplification, they've realized that they need to, you know, if they're gonna kind of move the needle in the business, maybe they, they, they need to kind of really fix the core brand. And this, this kind of reserve stuff is maybe a, a, a distraction. And they're focused that effort on, on that core, which is, which is maybe the right, the right thing to do.

Ernest:

Yeah, that, that's been my take as well. I kind of feel like they've, um, to the credit of the new CEO, Brian Niccol maybe recognized that as a brand, they, they aren't a third wave coffee provider—that's just not their position. That's not what their customers really are looking for. Um, and I, I, my supposition is that the closing of those Reserve locations is sort of a tacit acknowledgement of that.

Zoran:

Could be. Could very well be. Yeah.

Joachim:

Do, do we think that they could have done something akin to, or if this is still a possibility, and we've talked about this Ernest: Nike's skateboard brand had a similar failure right at the beginning they just kind of took their big sneaker playbook, slapped it onto the skateboard and said, look, this is a skateboard sneaker now, now you buy it. And it was very cynical. It was very clear that they're trying to cash in on, uh, the uptick in interest in skateboarding. And then it took Sandy bodecker to basically reset things and try and approach, I mean, very visibly. That's still Nike. But doing it in a, that's a very cheesy thing to say, very grassroots way, focusing on the independent skate shops and then building from that, the culture around that. Do, do, do we think something like that could be done on a, a skunk works type project for with the Starbucks machinery behind it, but not in an obvious way? Or is that kind of, did the Reserve thing just tarnish any other way of doing stuff?

Ernest:

Yep. Yeah, personally, I, I don't know if it would work. I think, um, to Zoran's point, I, I feel like the, this kind of food and beverage space is a little bit different in that as a consumer, it's a continuum. And you know, like you mentioned Zoran, you kind of jump in and out at different spots and you're not necessarily looking for one brand to deliver on all those different sorts of experiences. yeah, I think it'd be more challenging for Starbucks to, to use that sort of, uh, approach.

Joachim:

Hmm.

Ernest:

least I can't think of a way that that would work for them, that wouldn't end up just being a distraction that, you know,

Joachim:

Yeah.

Ernest:

the Reserve, uh, approach has been.

Joachim:

Yeah. about you? What do you think?

Zoran:

I mean, may, may, maybe not with the Starbucks brand, right? Like, I mean, they could do a, they could do a Toyota Lexus type of situation and you know, maybe just go after it, go after in a different, in a, in a different format. But, but maybe not, maybe not, uh, close to the core.

Joachim:

yeah. The Lexus one's interesting'cause the Hyundai is trying to replicate that model with the Genesis brand, we all know it's Hyundai and we all know that this potentially is an arbitrage opportunity to, to get a high quality car that's at, at the spec of a Lexus, but priced way lower because this brand is trying to bootstrap itself and get itself up there. But it sounds like the core ideas now, there's Starbucks focus on that then if you do want to try something and try and tap into something different, it would be sub sub-brand. Separate it, separate it out, and it's just becomes a, a separate stream of activity, but potential with distraction of. Taking you away from what you need to do day to day.

Ernest:

one thing that, um, I mentioned earlier that Joachim and I really focused on in our conversation last week was monoculture, or really this, um, move away from monoculture, as you know, with, with third wave coffee it's the antithesis of that. It's all about celebrating uniqueness of specific, um, growers and specific beans, and specific ways of brewing. And something you mentioned Zoran kind of, um, I felt like connected with that. You, you, you had mentioned when you, uh, emailed me that you were in Rome, um, on holiday and, uh, that. For one thing you mentioned that uh, the Starbucks you encountered seemed to be relatively empty, the ones in the historic center. Um, but that, uh, what was booming in Rome was McDonald's you kind of highlighted them as an example of, of company that to have managed to deliver on scaled heterogeneity. And I think listeners in the US where McDonald's restaurants are very, very uniform, will probably be surprised to hear that. So I was curious, can you talk more about what you saw McDonald's doing right in Rome, um, in particular and just sort of overseas in general?

Zoran:

Okay, so this is like a very awkward position you're putting me into to basically be like a brand ambassador for McDonald's. Um, but I will, I I, I, I will try and look at it sort of this passionately. So, um, yeah. So it was school holiday last week. Uh, we went to Rome. Rome is a shit show. Uh, the, the old center of Rome has about 200,000 inhabitants. They get 22 million tourists a year.

Joachim:

Oh

Zoran:

Actually, that was last year. I think this year is gonna be up by 10%.'cause the Pope is opening some weird door or something and there's a lot of like pilgrims coming and, but it, it just, it's, it is just mass tourism out of control and it's, you know, tons and tons of tour groups, a lot of them American walking around like zombies with their little headphones in and recording the same sort of Instagram reel or TikTok of a tiramisu, they wait 90 minutes to get, and anyway, it's, it's ridiculous. It's ridiculous. But in that chaos, you can sort of look at McDonald's in some ways as the mirror image of Starbucks because they're, they're, they're roughly about the same size. They both have 40,000 look, I mean, they both call them stores, right? They don't even call them like restaurants. It's 40,000 stores, right. Uh, uh, around the world. But, uh, McDonald's drives about three to four times the sales of Starbucks through the same footprint. And okay. Maybe they have, you know, a few more occasions during the day and they have kind of, you know, a restaurant. But anyway, I, it's, it's, it's, I think it's, it's a big difference. And I think you can maybe kind of zoom in to the same brand issues that we talked about earlier to kind of see some different decisions in a different story, right? So the first one is just coming back to that positioning idea, right? So if you look at, you know, the McDonald's website or annual report or whatever it is, they talk about their, their brand and their mission and their positioning as making delicious feel good moments, easy for everyone, right?

Joachim:

Mm-hmm.

Zoran:

feel good moments, easy for everyone. So the whole fucking connections and humanity and like, you know, all this nonsense, it's like, okay, it has something to do with food and it's easy when you don't want to think about stuff. You go to McDonald's, right? Or you need to pacify your child. You go to McDonald's or you have a hangover, you go to McDonald's. Like, you know, it's like, you know, it's like, I think very just easy kind of solutions for those occasions or, or kind of those, those moments, right? So I think just that, that positioning and that idea is a lot more grounded. And, and maybe for them it's actually more important that it's grounded because they are operating through a mostly franchise model, right? Whereas Starbucks is mostly company owned. Uh, so, so they do need, you know, they have less control over, uh, uh, over, over those, um, those restaurant stores around the world. Yeah. Um, the, the, the second thing is, is, is the brand architecture. And again, I think here they just thought, I think a lot more clearly about kind of what they elevate into those sub-brands, right? So you have, I don't know if you have it in the us I haven't been in a while, but the, you know, the McCafe.

Ernest:

yeah,

Zoran:

You have. Yeah. You know, that's focused on coffee. You have Happy Meal, you have, you know, big Mac. There's just the kind of the iconic products, the iconic occasions that kind of separate'em and, and sort of branded them, giving them a purpose. But it's not, it's not sort of dilutive, right? Of the core, uh, of the core McDonald's kind of offer or experience. It's kind of, it feels much more additive, right? So again, the Happy Meal and the kids targeted stuff doesn't make you feel like you're getting something worse out of, you know, the regular burger or, you know, what, whatever you're getting, right? So same thing with the coffee, right? Like, they're just kinda elevated their, their, their, their coffee. Um, and then I think just in terms of the brand partnerships, uh, very, very different approach, right? They've, they've not kind of, you don't, you don't buy a, you don't buy McNuggets in a 7-Eleven, right? They bring in, they bring in. Hello Kitty and Care Bears into the store, you know, and that gives, that gives kind of novelty and reason to come back and collectibility and kind of drives that repeat. They just, I think, thought about these partnerships in a much, uh, I think smarter, more, more, more, more strategic way that just, that that doesn't dilute the experience but actually adds, add, adds to the experience. So, so, um, uh, and it, so those, I think from a brand perspective, you know, that's kind of what's happening. But I think also just coming back to the business model, I think there's just a lot more, uh, flexibility and adaptation because of the franchise model. Right. So, uh, can you get a beer in McDonald's? In the US

Ernest:

No, I don't think so.

Zoran:

No. Okay. So in Rome, you know, people were just, you know, getting their. Nuggets and burgers and just kind of hammering poni. Uh, I think you can get you, you know, you, you, you, you know, they've obviously adapted the coffee program to the local, the local market. And again, just, you know, as you go country, by country, by country, it's uh, uh, it's a much, much more tailored, heterogeneous thing. Now I look, don't, let's, let's be real and like, let's not kid ourselves, it's nowhere near third wave coffee or natural wine or, you know, authenticity or, you know, real producers or, I mean, we're still talking, you know, a, a mass, a mass, very mass, uh, experience. But it is, it does feel a lot more, um, you know, sort of tailored and, and in a lot of ways thoughtful than

Joachim:

Hmm.

Zoran:

Starbucks. Actually,

Ernest:

I'll share, um, a link in the show notes to, I think it was a CNBC video from not too long ago. That talked about the success of, uh, fast food brands in France of all places. And they specifically highlighted, uh, McDonald's and they interviewed a lot of, customers in France, and many of them mentioned as to why they, uh, were such fans of McDonald's, that they felt like it was French, that they really made an effort. So, um, I think what you're, what you saw in Rome is not specific to Rome. I think it's, uh, that they're, they've been very successful bringing to life globally. I think the funny, ironic thing is that where they've really struggled, really at least just been flat for some years now, is in their home market in the US, uh, speaking of McDonald's. That is the market where they are, I'd say the most homogenous, um, across, uh, a market that is pretty dynamic and diverse. Um, so I would, I, I've always wondered why they don't bring that global approach into the US at least give it a shot as, as something to, bring some energy, uh, to their, to US operations, which have just been kind of moribund a for a little while now.

Joachim:

I mean, they have access to these international menus. Really don't, I mean you, I mean like French, McDonald's will have different items. I mean, I'm not talking about the beer, but food items and then, and then the Japanese, McDonald's will have different stuff. So I mean, it almost feels like you could do like a very patronizing, international rotating menu once in a while.'cause the McRib was one of those things that in the states

Ernest:

Right,

Joachim:

motivated. Right? So you could do these limited edition things.

Ernest:

right.

Joachim:

I think maybe what you're saying more is the local, getting into the local, like getting the local market to be more flexible and different than across the states. Was that your

Ernest:

Yeah, ex. Exactly. Yeah. Allowing for the same sort of flexibility within the us, which, you know, has many different geographic, um,

Joachim:

Yeah.

Ernest:

uh, differences in terms of food preferences, uh, and allowing that to that, heterogeneity to come to life here as well. It just seems like, um, no brainer opportunity, but, uh, I, I don't know. There's people I'm sure smarter than me that have decided why that's not a good thing to do.

Zoran:

O, obviously McDonald's should be hiring us to advise them on this, so.

Joachim:

This is our pitch. If you're listening, the Golden Arches, we we're calling you.

Ernest:

what you mentioned Zoran just brings to mind one other kind of real world, tactical example that I thought might be worth sharing. Um. it's a brand that sort of parallels McDonald's in Coke. Uh, when I was at Wieden and Kennedy back in, uh, like 2010 or so, I worked on the Coke, uh, and Diet Coke North America accounts, and that was just a handful of years after Coke had rolled out a, a hugely significant and hugely successful redesign of their, um, visual identity. Really soup to nuts: the design of their packaging, their promo materials, delivery trucks, the whole shebang. uh, we'll include a link, um, in the show notes to some before and after Images. It was pretty significant, and this visual identity overhaul was led by Turner Duckworth, which is one of the most highly regarded brand and packaging design agencies in the world. And I loved how founding partner Bruce Duckworth explained the why behind the work that his agency had done for Coke. Um, this is from an interview that was conducted many years after, but uh, I'm quoting Duckworth here, he said. time a new brand manager came in at Coke, they added something new to the design, added bubbles to to the note freshness. The next added some icicles on top of that, another put on an extra white swoosh. Eventually you cover up the bits that are the unique and staple parts of the brand. So you have to strip that back. It was stripping away all the unnecessary bits of design that had accumulated over the years on the packaging. stripped them away. So you were just left with the elements that were truly, unmistakably Coca-Cola, unquote. And I remember that at the time this guy named David Butler was Coke's VP of Global Design, and he had echoed that sentiment to our team in a way that always stuck with me. He said, you have to focus on the things you can own. And then just get rid of everything else. Uh, another reason I really love this is that I think it echoes the original brief way back in 1915 that led to the now iconic contoured Coca-Cola bottle. And I think it was a brief that was remarkable, both in its audacity and its simplicity. That brief was simply to create a bottle so distinct that it could be recognized by touch the dark or when lying broken on the ground. Um, and I think that, uh, the, the Turner Duckworth team really kind of came back to that in this, um, uh, redesign work that they did. I think, you know, for one, that all speaks to that point you made Zoran about simplifying and the power of, of simplifying and focus, uh, on a clear positioning. But, I wanted to really highlight something that was a build on that, which is, um, as David Butler explained in interviews, I'm quoting him here now, the whole business model at Coca-Cola is about leverage and driving scale around the world. But in order to maximize effectiveness, we also recognized we had to approach design with consistency, adaptability, and cultural relevance, unquote. So using this new visual identity as a baseline Butler's team designed, uh, or created a web-based tool that they called the Design Machine, that enabled Coke employees and partners around the world to create customized designs for packaging posters, and, you know, what have you. uh, as Butler explained actually in an interview with The Economic Times of India and an interview in 2010, uh, I'm quoting him here, Design Machine takes assets and allows local markets to customize them. 80% of what you do is pre-designed, and you can customize that by up to 20%. It gives us that kind of flexibility and productivity across our company. Imagine writing a brief, briefing an agency, getting the work back, sending it to corporate for approval. What used to take a minimum of two weeks now takes 10 minutes, unquote. So, you know, just by way of recap here, Coke's centralized global team developed this phenomenal new visual identity, but they recognized that as iconic as the Coca-Cola brand is around the world, it couldn't come to life in a way that was just universally homogenous. So, uh, like McDonald's, they realized they had to allow for a degree of heterogeneity in local markets. And they had, I think, what was really surprising degree of foresight back in the late aughts to actually create a tool, to create a platform that very efficiently enabled their local teams to, um, deliver on this sort of managed heterogeneity. And you know, I think this might seem a little dry, but I thought it was worth sharing because it shows that there are ways that you can deliver on localized heterogeneity for, you know, it's a terribly un elegant term, but, uh, you know, that's what we're talking about. And, and do that while still retaining global consistency around the fundamental aspects of your brand. Um, I

Zoran:

AB absolutely a classic. Yeah, absolutely. A classic I case study and the, and the kind of power of design and, and and, and sort of what they, what they did with that and sort of invented Canva 10 years before Canva, right? Like with the kind of the automation and the, uh, and, and the online stuff and tools, I think. Yeah. Uh, super, super great case study and an example, uh, maybe they need to bring them back in though.'cause I think they've, they've drifted

Ernest:

yeah.

Zoran:

It's, it's sort of, it's sort of like a decade, you know, like every decade you kind of need a need to clean house. Uh, I don't know how you guys feel, like, I think it was Ogilvy that convinced Coke to kind of replace the logo with people's names on the packaging. How, how do you guys feel about that?

Ernest:

that was a, I think, an interesting, another interesting example of allowing for heterogeneity in that, as I recall, that work came out of Coke, Australia, and I'm not sure, you know, I think there's, you're probably right that it was Ogilvy, out of Australia that came up with the idea, and it was apparently very successful, it actually did drive an increase in sales, so Coke globally then highlighted that and sort of encouraged local teams in other markets to adopt that concept as well. So I thought that was another example of something that came bottom up. It wasn't something that the global Coca-Cola team came up with as an idea and forced down. it was instead something that came from a local market that, and went up. Personally, I think it's kind of cheesy, but apparently it was effective. I don't know. Joachim, if you have a take on it.

Joachim:

I was just very confused because you walk into a shop and you just see names, you, you kind of, I, I know it's Coke and I know all that stuff. You know, that's, it's, surprising that I would still be confused and just be like, what? Why does it say Pedro on the can? And what is the significance of this? This should be legible to me as a customer walking in what this is and what the joke is, or what am I missing out on. So found it very confusing. I'm surprised hearing Ernest that you said that it was, it actually did something. Um, but

Ernest:

I, I, I mean, I think to their credit, uh, you know, maybe I'm totally rationalizing here, but it was rooted in the fundamental brand positioning for Coke, which was kind of around this idea that Coke is better when you share it with someone else. And so the intention was that you'd be buying it for someone else, for Pedro, and you'd be giving it to Pedro and be creating this moment of joy, shared joy.

Joachim:

I see. Okay.

Zoran:

Yeah. I don't know.

Joachim:

crossed his arms.

Ernest:

Yeah.

Zoran:

I don't know. To me, to me it always came across as like, like telemarketing, you know? Like when they don't know like, what's your first name? What's your last name? And it's like, dear Kim, or you know, dear Smith judge. It's just, it feels so fake personal that it, I don't know. To me it's sort of diluted. It always felt diluted, but I'm, I'm probably not the, not the, not the segment. Not the target.

Joachim:

target.

Zoran:

good, good, good, good activation. But

Joachim:

Yeah.

Zoran:

they've taken it too far.

Joachim:

Hmm. Yeah.

Ernest:

Yeah.

Joachim:

yeah. Yeah. I, I find the, the point that you're making Ernest about kind of the subtractive element and then Zoran, and you're saying every 10 years you need to get in

Ernest:

Hmm.

Joachim:

and you need to clean everything out. Um, I think that is, it's a sad state, but it is that you'll see the images in the show notes of the Coke can, but it is like, literally it gets so overloaded that it is so easy to understand, like it is now time to stop. Like we've added everything to this damn can and this logo, clean this thing up. But it's so sad that it has to take that long and that there's some drift. There's always this drift away from being tethered to like, this is the core thing. Just do this and we'll be okay. But yeah.

Zoran:

It is just really hard if you, I mean, I don't, it's probably similar in the product world that you guys can can talk more about, but like at least in the brand world, like if you're a brand manager and you're looking at your brand Yeah. 8, 10, 12 hours a day, you get bored of it very quickly and you wanna change things and move, you know, move things around, but your, your customer maybe spends, you know, split second looking at it on a, on a shelf when they're buying it and, you know, however long it is when they're consuming. It's just, it's, it's, it is, it is very hard to kind of reconcile those two realities and keep the discipline, um, uh, you know, to, to, to kind of keep things clear.

Ernest:

one last, um, little case study I'll mention again related to Coke is, um. that point, Zoran, uh, the CEO who enabled this redesign that Turner Duckworth, um, executed uh, a guy named Neville Isdell. he had come in, it was actually a similar situation to Starbucks where Coke had this sort of carousel CEOs, none of whom were particularly successful. The company had just been stagnating for several years. And then Neville Isdell came in. He was actually a longtime Coke employee who had retired. They brought him back to be CEO and he noted that one of the things he had done when he was leading Coca-Cola in the Philippines to get his team to try to think, I hate to term outside the box, but you know, outside of their own BS was he, um, had a meeting where he, as the head of Coke in the Philippines, came in dressed in a Pepsi T-shirt, he had Pepsis out on the table and Pepsi, tchotchkes. he said, Hey, you guys we're, we're gonna be Pepsi and we need to, come up with a plan for how we're gonna attack Coke. And, uh, you know, it's silly little thing, but it was a, a tool that he found to be effective for kind of, uh, getting people to think outside of that, uh, standard framework that we, it's so easy to get stuck in.

Zoran:

Great, great idea. I'll steal that for, for some workshops coming up.

Ernest:

now, you know, just to kind of maybe bring this back, I was curious. Zoran and, and Joachim. We've talked about some examples here, some, some specific things like from McDonald's, from Coke. Are there any things that you think Starbucks could apply, to help them address these issues that they're having?

Zoran:

I mean, look, I mean, I, I, I think we've given them a lot of free advice on this call, right? Like, I mean, I think, I think, you know, uh, you can, you know, that, that, that I'm sure they're, they're aware of as well. Right. So, I mean, I, yes, I mean, I think we've, we've covered a lot of it, you know, from the, from the brand side, from the product side, um, just kind of, you know, figure out where they really wanna play and, and I think commit to it and simplify it.

Ernest:

Joachim, as someone who lives in Seattle. What, what's your take?

Joachim:

Oh, act. Yeah. I hadn't made that connection until he mentioned it. The, the one thing that I come back to, and that's mainly my bias from, you know, my background as a protocol designer I look at that wallet app quite carefully. It's just a payment card right now. So I don't know exactly what it is, but there's something in that, and I feel like the magic is that people are willing to load it up with money. So you've already crossed a threshold there. So there's some magic somewhere in that, that I feel like hasn't been fully explored, but I don't know exactly what it is. Is it loyalty? Is it some sort of other way of creating attachment? Is there another way of creating sense of belonging to your shop? Is there a way to, you know, replicate something that creates a weird pseudo community that we can make money off of? You know, that doesn't sound right, but you know what I mean? Would you allow the wallet to be, again, more heterogeneous. It's a digital thing. does it have to be the same damn thing wherever I go? If I walk into the shop. It modulates the experience somewhat in a very restricted, sandboxy way that that is responsive to what is happening in the shop. So you actually feel like virtually as well as physically that you're coming into the store, it would also induce you to go into the store to create that experience, as opposed to ordering remotely and then popping in. So there's these things that you could do to create some sort of connection and cohesion. But that's just where my mind goes right now because I, I think about that as, I think they kind of, it's easy money, you know, it's comes in after a year, you can book it as revenue. You know what, why would you mess with it? So just get people to load it up as much as possible. And that's basically it. But it feels like there might be something there.

Ernest:

Uh, you know, this might seem like a little bit of a tangent, but I mentioned earlier that, um, Zoran and Joachim both have a shared interest in natural wine. Um, actually when Joachim, when you mention natural wine during our previous episode, I, my ears pricked up and I thought of, um, for those who haven't heard that episode yet, Joachim had noted that natural wine is an example of an industry that's embraced the idea that's certainty and homogeneity are not necessarily always good things. in fact, that variability within the same label and potentially within, uh, the same vintage. be a feature rather than a bug. So, you know, a great example of anti monoculture, anti homogeneity. Joachim, please jump in. Am I characterizing your, your sentiments about natural wine correctly?

Joachim:

Yeah, that was, that was my vibe. And also I think, and, and Zoran might correct me for saying this, but there's a certain, Risk and reward to natural wines as well. I feel like more of a choose your own adventure and because you've kind of created the conditions that everyone understands that this is the, the nature of the interaction, you, you can have a bit more fun with it. So I, I, I, yeah, it's a non monoculture variability surprise. you coming back. Right. It's, it's always modulating based on what's happening in the world and I feel like it lends itself to storytelling very quickly. So yeah, that, that was kind of where I was coming from.

Ernest:

I was just curious, Zoran, just for the benefit of anyone who's unfamiliar with natural wine, could you just sort of explain what natural wine is?

Zoran:

Sure I, I'll give it a shot and I'm looking forward to the recommendation section. I hope you have some, some, some bottle recommendations later. Joachim.

Joachim:

Oh,

Zoran:

Um,

Joachim:

no, no. I have nothing. You should.

Zoran:

you can think of sort of natural, of natural wine kind of as a beverage and kind of on the beverage level. It's, it's basically grapes that are organically farmed with, you know, no roundup and pesticides and herbicides and kind of poison that you put into the ground. You don't, you, you, you, you sort of, you use native yeasts, which is a big deal, right? So, because that actually, like, that drives the fermentation, has a big effect on the, on, on the taste. And then you just don't do funny stuff in the cellar, like, you know, uh, adding color and tannin and, you know, yeah, basically you don't, you don't mess with it in the, in, in, in, in the cellar. Uh, so it's, it's sort of like, you know, wine without a lot of makeup right on, on the beverage, on the, on the beverage side. But I think, but I think also it's very, I don't know, just having spent kind of couple of years in this, in this world. Tangentially as a distributor. I think a lot of it is about the personalities that, that kind of make this stuff right, because you, you, you, you're genuinely dealing with farmers, right? Like people that you know, like actually like plant stuff and are dependent on, you know, the whims of nature and actually take much, much, much higher risks than conventional winemakers.'cause they don't treat and they don't spray the shit out of their vineyards, right? And it, it's much, it's much easier to lose a harvest, uh, when you farm this way than it is if you are, you know, if, if you're just relying on, on, on, on chemicals and, and all that stuff. At least the more of these, you know, people that I've met. It's sort of like, you know, that old cliche about like how a, how a, how a dog owner looks like their dog. And the other way around you kind of, you, you, you kind of, you, you really see that, that the wines that, that, you know, that that, that, you know, these people make, are really reflection of themselves. You know, so you have like the really precise, you know, half German guy, economist trained, uh, seriously. One, one here in, in in Eastern. It makes like serious, yeah. Uh, like really precise. Uh. Uh, you know, methodical ones and you have, you know, the kind of, you know, crazy, you know, crazy kind of, uh, uh, bonvivant scientist guy who, you know, spends a bunch of time in France and then comes back here to, to kinda just leaves the vineyard kind of to grow wild, then comes back and kind of makes some stuff, uh, that's just kind of in insane and every bottle's different. So it, it, it, it really is a reflection of, of the personalities. And I think I, I think finally it's sort of a, it's a culture and kind of a scene as well, right? Like, and I think you can sort of understand it. It's, it's almost like music, you know, like, like, I don't know, hip hop or punk or, or, or whatever, right? Like you, it's not about kind of definitions and it's not corporate. It's very kind of self-policing. And, and you kind of know who's in and who's out, right? Like, who's invited to these certain fairs or tastings and who's not. And you know, and it's, and it's kind of an informal enforcement. But it's a very clear enforcement. It doesn't, it doesn't mean if you have that like green organic sign on the thing that means nothing. And actually in some cases it's a warning sign because they're probably treating organic as as marketing. And they do funny stuff, you know, after, after, after they get that, that certification. So it has its own subculture, has its own visual codes, it has its own, you know, sort of bars, environments and so on. So, so it's kind of, you know, it's a beverage and it's a set of personalities and it's a culture, uh, but it's also super tiny. It's like maybe one from generous, 2% of global wine production.

Joachim:

Yeah.

Zoran:

And the rest is, the rest is Starbucks, right? Like the rest is Yeah. The, the, the rest is, yeah. Yeah. So I dunno, that's kind of a long-winded way of, of it.

Joachim:

but it's so interesting because, I mean, I'm super biased about this stuff. I like a good punk rock ethos to it, Like you said, there's the norms that create the scene are also only experienced. They're not written down in a code book.. So I find that really, um, that's very energizing because so much is mediated through machines now. And for that, for the machine seal to be in the process, like computers, you have to turn yourself into a legible thing. You have to bucketize. Yourself into a vector of classifications and things. And then all of this just to like quantize yourself into a thing that is legible. And when I hear about scenes like this that are just, I eligible you, I have no sense. I have to go there and experience. You would have to be my guide and we could experience it together. It's fascinating to me. And I feel like that's the stuff that creates resilience in your economy, resilience in the activities of people, because. We should have more of this across the board and, and more industries. You know, it should feel more like this than hyper corporatized nonsense.'cause it, that stuff is not resilient and is generally a monoculture and it's your Prussian forests, right? It's not the rich undergrowth and nutrients that spark new things. We're trying things, we're doing things. Experimentation is part of the, the, the core fabric of what that community is trying to do. And at being adventurous. Like that's super anti-corporate, right?

Zoran:

Totally. Totally. And, and I think, you know, it's, it's probably kind of intentionally opaque and it kind of takes time to penetrate. So you kind of feel like you've actually, like, once you put in the work, you feel like you've discovered something, right? It's not so easily, you know, just, it, it's not on the shelf and says Pedro, right. And you kind of pick it up, right? Like, you need to, you, you, right? Like you need, you need to do a little bit of homework. And I think, you know, the other thing that's maybe interesting about wine is that it's maybe one of the few food products that I can think of that doesn't have an ingredients label. Right. So,

Joachim:

Hmm.

Zoran:

you know, The, the, the kind of conventional stuff doesn't have to disclose that they've put in, you know, all of these chemicals and done reverse osmosis and, and, you know, put in, you know, uh, mega purple to kind of color it and, you know, and then boil off some, a alcohol. You know what, like they don't, right. So, uh, you really have to, you, you have to, you have to dig, dig deeper for yourself. And I think just that, that process is, is, is kind of rewarding. And, uh, you know, sometimes you end up with, that's undrinkable, uh, but sometimes you find something that's amazing. And, uh, that's, that's, that's part of the, that's part of the joy. the, the end.

Ernest:

you know, when we worked together, I didn't recall you being a huge wine person, so I was wondering what led you to be, you know, become a distributor of natural wine?

Zoran:

again, it was, it was really, I think just this, this, um, connection to something real that was very appealing. You know, especially sort of living in, you know, places like Hong Kong and Singapore and. You know, population density of, you know, 10,000 people per square kilometer and no, you know, no, no farming, no, no land, no, no connection to nature. I think it was a connection to nature, connection to home, connection to something real. Um, that's, that, that's really, that's really, um, been, been super appealing. Um, and uh, yeah, we really enjoyed it. And I think just, just again, the, the community of people that, that we've met, that we've met around it, that, that sort of care about growing things other than their bank accounts.

Joachim:

Hmm.

Ernest:

that's awesome. Uh, this has been a, um. learning conversation for me, a great experience. Um, and huge thank you to Zoran for, for joining us on short notice for this sort of kind of emergency episode. Um, but don't leave just yet because Zoran is actually staying with us for our actual recommendation segment. All these things we've already talked about notwithstanding. now just for background on this, Zoran, in every episode, Joachim and I end with a recommendation, uh, I may be misremembering this, but I think initially we had imagined this as an opportunity to highlight a product that we were particularly excited about or particularly disappointed by. um, in practice we've ended up using this as an opportunity to highlight pretty much anything that's kind of gotten us excited, including books, films, music, and, uh, occasionally products. So with

Zoran:

it's great. That's why, that's why I have these headphones. Like that's one of my favorite, that's one of my favorite parts of the show. Yeah.

Ernest:

Oh, that's great. Uh, Zoran, just for anyone, uh, who's listening held up a pair of headphones that, uh, he bought based on our, one of our previous recommendations. so with that context, Zoran, is there anything you'd like to recommend to our listeners? I,

Zoran:

Yeah, a couple of things. So I think if you are interested in kind of heterogeneity and this kind of anti-corporate world, maybe check out, uh, an app called Raisin. Uh, I think the URL is Raisin dot digital, but it's a, it's, it's really the, the, the sort of guide for natural wine, uh, in, in cities around the world. And you don't even have to drink wine actually to find it useful, because I think it, it, it sort of, it has a list of bars and has a list of, uh, wine shops, also a list of restaurants. And I think if you're a restaurant that cares about your wine program and kind of, you know, not serving people poison, they, they will care about the food. And I think, you know, the, when we travel, to be honest, that's one of the

Ernest:

Ah,

Zoran:

useful. Guides to a city that is infinitely more filtered and interesting and real than Michelin or, you know, any of TripAdvisor type nonsense. So, so, uh, checkout raisin, uh, I think they just passed a million users, so maybe, maybe, maybe it will go downhill, but it's still good. It's still good. Uh, uh, so that, that, that, that's number one. I think, uh, if you wanna drink something interesting, check out this, uh, uh, wine, uh, producer called Piquentum, P-I-Q-U-E-N-T-U-M. Uh, super interesting guy. Half French, half Croatian, uh, has maybe the best designed wine label of all time. So if you're into design, check out the label. It's, it's, it's awesome. You can, you can see, you can see the story, uh. Last, but not least, uh, if you wanna just hear some stream of consciousness, some thoughts around sort of food and where it's going and uh, uh, kind the future of that category. Uh, check out the newsletter that I do with my colleague Jennifer. Uh, it's called Unstuck and we are on, um, ghost. So we're on unstuck Ghost io.

Ernest:

And that last recommendation, um, is really funny to me because when I knew Zoran Whatever, how many decades ago you were, a carnivore, I guess.

Zoran:

I still am. I still am. I don't eat vegetables. I don't eat vegetables, but, you know, uh, anyway, that's a whole nother rabbit hole. Um, but you know, they food industry needs to come up with something that's gonna, you know, make me stop eating animal grown meat that takes a hundred calories to produce one calorie of nutrition. So anyway, that's, that's what it's about.

Ernest:

Yeah. Which is great. I think it's a fantastic irony. Um, how about you Joachim? Do you have a recommendation this week?

Joachim:

I have a product to recommend.

Ernest:

Hey.

Joachim:

like a half recommendation. I'm not sure about it. I'm still working on it. I, I think I've mentioned this idea in previous episodes about peer-to-peer networking. So

Ernest:

Yeah.

Joachim:

in that whole rabbit hole of, instead of using cloud, actually a good thing to talk about this week in that there was a massive AWS outage at the beginning of

Ernest:

Right.

Joachim:

affected many companies, including the one I work at. But, um, there was something about peer-to-peer data sharing and networking that felt very straightforward and clean. It was like, that's what the internet was about was we connect computers up and we can bounce messages around these computers until they recently instead of a central node. So I then started thinking about would it be possible to make a small hardware device that's like a social network that runs on a Bluetooth mesh Um, and so it turns out Chinese have. Produced so many of these small devices that run a specific chip, the ESP 32 chip, and it's this tiny, um, computer. And so it's from a company called M five Stack. device I have is a core two. It's a tiny square that has a touchscreen, USBC accelerometer, a speaker, and a little SD card slot so you can load it up with stuff and it can be coded in Arduino, which is a very hobbyist favorite programming language, or micro python, which is a lightweight version of Python. I've been trying to build something with this thing together with my LLM, uh, services to try and get something off the ground. It's been. It's in many ways very straightforward and in many ways it's really painful. So that's why my recommendations kind of half, but the thing that's crazy is it costs$30 and the technology packed into that thing is, I don't know, it is still mind blowing to me. I think we've gotten so used to the corporatized technology sector that we believe a device has to cost a thousand dollars for it to be useful and it needs to have, you know, gigahertz of computational power. This thing has got about a few hundred megahertz, which is incredible. and it can do a lot of amazing stuff. Enough of the stuff that I was trying to experiment with. So I have two of these devices. I'm trying to get them to speak to each other, but,

Ernest:

Hmm.

Joachim:

um. As a, like an experimentation platform to make a very simple project. It's very, very cool. It's, uh, there's a, there's a lot of reasonable documentation. It's still not working a hundred percent, but I feel like it's a good start, like as a platform, if you ever want to just fool around with hardware and coding and use a visual coding language, which they have, which is their thing called UI Flow.

Ernest:

Huh.

Joachim:

It's a pretty cool product. And, um.$30.$20, so I would recommend that M five stacks Core two.

Ernest:

Oh, that's a, that's a great one. on my end. Uh. Uh, I talked LA I think it was last episode, about, um, having gotten into, back into running in a pretty big way. And I think I've mentioned in the past affection for a YouTuber named Yowana, uh, who, uh, is focused on running, primarily does running shoe reviews, but just generalized running content. And I wanted to highlight not only his channel, we'll provide a link to that, but also his app. Uh, he's created this brand called Supwell uh, that's kind of the, uh, brand for his, for him and this community he's created in this app. uh, it's a a for-fee app. You pay$5 a month to get access to this community. um. I've gotten tons of value out of it. Uh, if you're a sneakerhead and a runner, one of the big benefits is that you get access to this like-minded community. Um, and you get access to people who tend to want to sell lightly worn running shoes, uh, at a discount. So it can be a really, I mean, it's already on my end at least paid for itself many times over, uh, in terms of my ability to get access to, um, you know, shoes that tend to be pretty expensive these days at a pretty significant discount. But the reason I really wanted to highlight him, not only because I really like what he's doing, is I thought it was a, a great example of kind of, uh, anti monoculture that we've been talking about and anti heterogeneity. if you look at his content, almost as though he, uh. Created a checklist of all the things that your standard typical YouTube running shoe reviewer does and is, is doing the exact opposite. his videos are typically like an hour plus long, and they're really meandering. So it's not for everyone. But, um, his perspective is really unique and it comes from a real place. He's a very serious runner. He calls himself a hobby jogger, though, you know, he's not. Um. He, he, he's not coming from a super elite perspective and trying to create, um, distinction in that way. So a very unique perspective, a very personal perspective, um, that has led to this very vibrant community of people who, um, you know, want to, who, you know, who have, uh, shared set of values. Kind of like, I think the way Zoran described, uh, the community of natural wine

Joachim:

Hmm.

Ernest:

I feel very similar sort of thing when I kind of, um, log into the Supwell app. also wanted to highlight, highlight it, because I thought it was a really cool example of this sort of generation of professional content creators. think, um, you know, we've seen a few generations over the, decades now. Uh, and most recently, you know, you've had people who. um, beholden to the platforms. You know, this, I'd say what maybe first generation of professional content creators um, on platform driven advertising, Google AdWords or Google's, um, uh, YouTube advertising. Kind of more recently, you've seen an evolution to creator driven monetization via like brand tie-ups, the ubiquitous Squarespace ads or VPN ads that you hear, uh, creators reading in their, um, YouTube videos or direct monetization via platforms like Patreon. still they're beholden to the platform be out, uh, providers because you needed to kind of do what the algorithm wanted you to do to get the views you needed to be able to monetize your content. But now what, what we're starting to see, and I think uh, Yoanna and Supwell is a great example of this is. maybe you could call it like a third generation, a gen three of professional content creators who are shifting the power dynamic. So in the case of, um, Yowanna, he's created this app, the Supwell app, um, and he still uses his YouTube videos and his Instagram content and, and, uh, TikTok content to, um, kind of build and cultivate his audience. But then he generates the bulk of his revenue through this complimentary product, uh, and service offering via his app. And he owns that relationship now, like he owns that relationship with me now. Uh, so he, you know, while um, he still gets some revenue from YouTube and these other platforms he's on, he's has just much more control over his own business. Um, and it, it's really exciting to see. Where people like Yowana are taking it. Like his current app is really just a wrapper on an existing platform called Circle circle.io. Uh, but he's right about to launch essentially like a Strava competitor to see a, you know, independent creator creating this really ambitious, uh, platform and launching it into a built-in audience, it's just super exciting to see, these, this kind of next generation of content creators creating for themselves their own viable, um, business platforms. So, uh, for a lot of reasons, I, I wanted to highlight that. I think, uh, you know, his content's, super fun, but also just as, uh, an example of the evolution of, uh, content creation online.

Zoran:

Seems, seems a lot deeper than who was the other guy you had that was selling the wallpapers? That seemed like the, the opposite.

Ernest:

Yeah.

Joachim:

Oh my goodness. Yeah.

Zoran:

See, I listened to your, I listened to your stuff.

Joachim:

you do. That was a,

Zoran:

Yeah,

Joachim:

episodes ago. Wow. you,

Ernest:

I know. I'm really impressed. Well, uh, that does it for us, uh, today. And, you know, aside from being a listener, thank you once again Zoran for joining us for this impromptu episode. Uh, where can listeners follow you or find more of your work?

Zoran:

Uh, yeah, thanks a lot for having me on. This was, this was super fun. Uh, yeah, so just check out either Unstuck or find me on LinkedIn, uh, with my very difficult to spell last name. So, uh, Svetlicic, but it's maybe in the show notes.

Ernest:

Yeah, we'll include the

Zoran:

but yeah, but thanks for, thanks for, uh, thanks for having me on. This was a lot of fun.

Ernest:

Oh no. We really appreciate it. Um, and to our listeners, thank you for joining us here at Learn, Make, Learn. And as I noted earlier, we'd love to hear from you. have thoughts on anything we've discussed or recommended today, or maybe there's a product or service you think we should talk about, it's a request, a question, or an observation, please share your thoughts with us at Learn make learn@gmail.com or on threads at Learn Make, learn Show, all one word. Thanks for listening, and we hope you'll join us for the next Learn. Make, Learn.

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Ernest Kim

Co-host
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Joachim Groeger

Co-host