NAD Finds Starbucks Can Support Certain Claims for Verismo Single-Serve Coffee System, Recommends Company Discontinue Certain Claims

New York, NY – July 25, 2013 – The National Advertising Division determined that evidence offered by Starbucks Coffee Company supported certain advertising claims made for Starbuck’s Verismo single-serve coffee system. However, NAD recommended that Starbucks discontinue claims that compare the single-serve product to “coffeehouse quality lattes…” or “Lattes … made to cafe standard… .”

NAD is an investigative unit of the advertising industry’s system of self-regulation. It is administered by the Council of Better Business Bureaus.

Advertising claims made by Starbucks were challenged by Kraft Foods, Inc., manufacturer of a competing single-serve home coffee system.

The following claims, appearing in advertising and product packaging, served as the basis for the NAD inquiry:

Express Claims:

•  “Perfectly crafted Starbucks coffeehouse quality lattes…”
•  “Lattes are made to café standard…”
•  “The all-natural milk pods produce lattes just like the original.”
•  “With rich espresso, high-quality Arabica coffee, and the creamy foam of  pure 2% milk, your favorite Starbucks beverages come together at the touch of a button.”

NAD also examined whether the advertising at issue conveyed the following implied messages:

•  The lattes and other beverages made with the Verismo machine taste the same as those sold at Starbucks at cafés.
•  There is no difference between the Verismo lattes and the café lattes available at Starbucks cafés.
•  The Starbucks milk pods contain liquid milk.

The initial issue for NAD was whether the claims, as evaluated in the context in which they appeared in three separate challenged print advertisements, communicated a claim that compared the quality of lattes made with the Verismo machine at home and the lattes prepared at Starbucks cafés.

The challenger contended that the advertising communicates that there is no difference between the two and further implies that the lattes and other beverages made with the Verismo machine taste the same as those available at Starbucks cafes. Further, the challenger maintained that the advertisements convey the message that the beverages taste the same and that both are made with liquid 2% milk.

The advertiser argued that even if a comparative taste claim was being communicated in the advertising and/or NAD finds that the advertising communicates “no material difference” the claim is substantiated by the testing Starbucks conducted prior to releasing the Verismo System.

NAD noted in its decision that, in the absence of reliable consumer perception evidence of implied claims, it routinely steps into the shoes of the consumer to determine the reasonable interpretations of the claims made in an advertisement.

NAD noted in its decision that there is a distinction between a claim that the beverage product meets Starbuck’s standard for quality and taste profile and a claim that the products are the same or that consumers will discern no material difference between beverages made with the Verismo system and those made in the coffeehouse.

NAD determined that the descriptive analysis of the Starbucks taste profile was sufficient to establish the Starbucks’ “quality” of the Verismo beverages. However, the evidence was not sufficient to support claims that there was no material difference to consumers in taste (or other qualities) between lattes made by the Verismo machine and those served in Starbucks cafes.

Further, NAD determined that the advertiser’s consumer testing – an at-home study involving 16 households in two cities – was not sufficient to support a comparative taste claim for purposes of advertising claim substantiation.

Following its review of the first print advertisement, NAD found that the phrase “cafe standard” was potentially confusing and could give rise to an implied claim that beverages made with the Verismo machine are the same as – or not materially different from – those served in cafes. Although the advertiser’s claim that the Verismo lattes are made with “natural 2% milk” the fact that the milk pods contain powdered milk, rather than liquid milk, represented a relevant distinction between Verismo lattes and those sold in cafes.

NAD appreciated the advertiser’s explanation that the actual advertisement challenged was placed by a retailer and was no longer running. To avoid conveying an unsupported comparative message, NAD recommended that the advertiser, in future advertising, instruct retailers to refrain from claiming that the Verismo machine makes Starbucks “coffeehouse quality” lattes or that they are made to “cafe standard.”

The advertiser asserted that the second print advertisement – which featured copy that stated “all-natural milk pods produce lattes just like the original” – had been placed by a retailer and is no longer running. NAD noted that it appreciated the discontinuance of the claim, an action it believed to be appropriate to avoid conveying an unsupported message that beverages made with the Verismo machines are just the same as those made in cafes and coffeehouses.

The third of the challenged advertisements was placed by Starbucks and featured checked boxes like those seen on Starbucks café cups and an additional check box signifying that the beverage can be made at home. The copy reads, “[w]ith rich espresso, high-quality Arabica coffee and the creamy foam of pure 2% milk, your favorite Starbucks beverages come together at the touch of a button.”

NAD found that the claims made were truthful and adequately supported. The third advertisement, NAD noted, did not convey the messages that Verismo lattes are the same in taste or quality as those served in cafes.

Finally, NAD determined that the challenged advertisements do not convey the implied message that the milk pods used with the Verismo machine contain liquid milk.

Starbucks, in its advertiser’s statement, said that while it appreciated NAD’s findings regarding the taste and quality of Verismo lattes, it disagreed “that certain advertising implied that Verismo lattes and those available in Starbucks cafes are the same, or that any such implied claim is unsubstantiated. Nevertheless, Starbucks will take NAD’s recommendations with regard to the claims at issue in this challenge into account in future
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