And he didn't even land a plane in the Hudson

I’m studying the news photos of Howard Schultz to see if all that limelight has singed the hair around his ears. In a mere week, the Starbucks CEO has sparked an international incident, figured into an ad for private jets, been hailed as a Braveheart by a god of business journalism, fostered more internet flaming than a virtual Zippo, and been outted for pulling a Folgers Crystals switch on friends. I half-expect to see him looming Zelig-like behind the podium at a Yankees press conference, whispering in A-Rod’s ear.

The one-time resident of subsidized housing was set on the path to hosting “Saturday Night Live” by his chain’s introduction of a new product. Whoa. How often does a restaurant brand make a move like that?

But Via, Starbucks’ controversial new instant coffee, is no ordinary addition, and its introduction didn’t exactly follow the industry operations manual.

News of the rollout (supposedly) leaked out beforehand via the internet and the current Jonas Brothers of that medium, social media. Once the word was out, Starbucks clearly harried it along. An internal memo purportedly sent to alert employees of the introduction was easier to find than the creepy picture of the octuplets mom while she was pregnant.

I got my confirmation of the instant coffee rumors from Starbucks’ Twitter poster, who added that he/she had tried and liked Via. Later, twitter.com/starbucks offered me and 54,200 other tweeters a link we could use to request a free sample (“Just did some math and figured out that we gave away almost 4 sticks of VIA per sec,” a later post noted). Non-stop tweets also spotlighted favorable reviews of the product, from the staff of Ad Age to store managers to individual consumers.

Meanhile, Schultz was making news on a global scale, straining international relations in the process. In an interview with CNBC, he remarked that business conditions for the chain were particularly trying in the United Kingdom because the economy there is in a spiral of decline.

That was enough to set off Britain’s equivalent of our Secretary of Commerce, the stiff-lipped Lord Peter Mandelson. Later, at a diplomatic function in the United States, he reportedly used an unprintable expletive to characterize Schultz and his comment. "Why should I have that guy running down the country?" he was widely quoted as remarking.

A Starbucks spokesman later issued a retraction and reportedly apologized to Mandelson, even though a poll on CNBC.com shows 83% of respondents believe Schultz did nothing wrong.

But controversy has been working in Starbucks’ favor, even when it’s stirred up by someone else. The CEOs of the Big Three auto makers sparked a furor when they flew in private jets to ask Congress for billions in aid. Schultz’s team subsequently announced that Starbucks, which is in the process of cutting 6,700 jobs, would sell its private craft.

Hawker Beechcraft, a private jet manufacturer, is publicizing that fit of frugality in the print ad it just got aloft. “Dear Starbucks,” the copy begins, “You still need to fly. We’re here to help.” The take-away is that Starbucks is being too strident in cutting expenses, an assertion that will likely be sweet music to investors’ ears.

Then again, with the way things have been going, they may have some additional tunes to mix into their iPod playlists. It’s only a matter of time until Schultz is asked to cut an album of duets with Tony Bennett. Maybe after he escorts Jennifer Anniston to the Oscars, and right before his appearance on The Tonight Show.

Smudging the line between restaurants, retailers

Once upon a time, restaurateurs and their investors questioned the wisdom of dabbling in retail. If consumers can eat your specialties at home, they reasoned, why bother visiting the restaurant?

But today, with supermarkets sporting all sorts of products emblazoned with restaurant logos, investors are asking a decidedly different question: Why aren’t you jumping on that (Bob Evans-brand) gravy train?

David Overton, CEO of The Cheesecake Factory, was grilled on that point by a financial analyst last week. “Well, we haven't decided to sell any of our actual dinner items or restaurant items yet,” danced Overton. “It's something that we could look at. We have been asked to do so…[but] the 70-something million people that came in the restaurant last year is where we're concentrating. I still think that's our greatest game at this point.”

Cheesecake, which just recently made concessions to such profound trends as discounting and offering mini-portions, may find the ranks of retail holdouts to be a lonely place. Panera Bread Co. ran through enough menu initiatives during an investment conference call on Thursday to suggest steroids testing for its R&D staff. One of the bigger ones, literally, mentioned by CEO Ron Shaich was a possible move into the retail sale of bulk baked goods.

He explained that units of the bakery-café chain have started retailing multipacks of muffins, scones and bagels. “You will see us focus on selling more seasonal breads at retail,” added Shaich. “We will regularly celebrate our gift worthy breads, things like Panettone, holiday bread, Irish soda bread, hot cross buns and a variety of sweet breakfast breads. We will also merchandise our breads to our guests for everyday use.”

Panera will be selling the baked goods through its own retail outlets rather than supermarkets, a twist that’s also being embraced by Starbucks. Its new retail push, the sale of Via instant coffees for home mixing, will be undertaken through the coffee giant’s own cafes, not a Piggly Wiggly or a King Kullen.

Other restaurants chains recently conferring with investors about retail initiatives include Bob Evans and California Pizza Kitchens, neither of which is a stranger to that alternative sales channel.

Indeed, Bob Evans is as much of a grocery-product supplier as it is a restaurant operator, a role it continues to expand by adding heat-and-eat products bearing the brand of its namesake restaurant chain. In its most recent quarter, for instance, the company added nine new retail choices, including “family-sized” portions of such comfort foods as mac and cheese and mashed potatoes.

But it also raised what should be a yellow light for restaurateurs branching into retail: During the most recent quarter, supermarket sales of Bob Evans-brand products decreased on a volume basis for the first time in more than seven years, executives noted.

Instant coffee, long-term implications for Starbucks

Starbucks’ introduction next week of instant coffee will certainly mark a turning point for the lifestyle brand. The question is, in what direction is it veering?

The chain’s leadership has chanted with near religious zeal that the concept has to recapture the special-ness of visiting a Starbucks—the aroma of coffee, the showmanship of the barista, the indulgence of a perfectly crafted artisan brew. It’s critical, they’ve stressed, to the brand’s turnaround.

Now they’re going to make it possible for some schlub in his underwear to snort down a cup by tossing some water and concentrate into a stolen Denny’s mug. It’s the equivalent of selling toaster-oven pizza to consumers you’re simultaneous coaxing to buy a duck-sausage-and-truffles pie at the little café on the corner.

The home office is insisting the instant, reportedly to be called Via, will be every bit as good as what patrons could get from a Starbucks storefront. “We have been working on this project for over 20 years, and have a patent pending on the technology that enables us to absolutely replicate the taste of Starbucks coffee in an instant form,” Vivek Varma, senior vice president of public affairs, said in a memo sent to employees yesterday.

And how did that news go over with the Starbucks aficionados who frequent StarbucksGossip.com, a gathering point of sorts for their ranks?

“I want to cry now,” wrote Keith Maxwell.

“Jesus Christ. Are they serious? This is sad. Very sad. Ugh,” lamented someone who identified his or her self as Scribelus.

Varma noted that the instant coffee market is a $17-billion business. The Wall Street Journal reported that Starbucks will sell its entrant for $2.95 for a package of three servings and $9.95 for a 12-pack.

The official announcement is expected to come at “exclusive events” next week in New York and other cities, and samples will start arriving at Starbucks units on Wednesday, Varma said in the memo.