Commodity vs. Luxury vs. Starbucks
Coffee as a whole is neither a demand inelastic good nor a luxury good, though certain individual coffee varietals qualify as such. It is the second-most-traded commodity in the world (behind oil) whose price fluctuates wildly as a result of temporary demand spikes and inadvertent market flooding.
Starbucks has capitalized on the elasticity of the market by accounting for 2% per annum of entire global coffee purchasing. This includes both Coffea arabica and Coffea robusta beans, and is a shockingly high number for a single company that professes to sell specialty coffees. This has a number of unfortunate results, the most prominent of which is the driving-down of coffee prices in America, meaning that Mom-and-Pops have to sell a higher volume of beans in order to keep the same bottom line.
Perhaps the most dire result is to the actual consumers of specialty coffee themselves. Understand this: Starbucks is essentially buying a commodity good and selling it as a luxury good.
As someone with many years in the coffee industry, please allow me to explain the difference. Coffee that is sold as a luxury good is considered "specialty coffee" and must meet specific standards of quality. At the purchaser level, to qualify as an actual "specialty coffee", it must be of a single varietal specific to a given growing region, and must be free of a given minimum number of defects per barrel sampling. Contrary to popular belief, many coffees sold in specialty-coffee stores are not actually specialty grade; many African coffees fall into this category. They are sold in these stores due to popularity or particular taste distinction, but they are not a luxury good, and do not command a higher price.
The reason you only ever see blends sold in Starbucks' retail stores is due to their habit of attending coffee auctions and literally buying the leftovers, bags of coffee with too high a number of defects to qualify as specialty coffee. These already inferior beans are usually mixed with high-yield, low-quality, low-grown Arabicas from Vietnam and Brazil in order to keep prices down. Make no mistake, the word "Arabica" does not qualify a coffee as specialty-grade anymore than a burning BMW impaled on a telephone pole qualifies as a luxury car.
Now as a consumer, you drink this sort of coffee all the time, in diners or in the office, and you pay 60 cents for it, and fair enough I say. But Starbucks sells you this exact same coffee, intentionally mislabels it as a luxury good, and charges you out the ass for it.
Couple that need for higher volume with Starbucks' corporate stratagem of block-busting, a practice that is not technically illegal but is certainly not fair competition, and you have a dire outlook for any poor schmuck who wants to actually buy specialty-grade coffee, since many actual retailers of specialty-grade coffee are put out of business or forced to relocate as a result of these practices.