Starbucks: to drink or not to drink? - Brief Article

Whole Earth, Summer, 2002

So what is it about Starbucks? Megathreat to community diversity, or groundbreaker for specialty coffees? Symbol for everything wrong about globalization, or company with a conscience? King of greenwash, or pioneer in wedding commercial success and good works?

It's clear that the chain--with more than 5,200 outlets in over twenty-five countries, has captured someone's attention. It was a target of vandalism at the 1999 Seattle WTO demonstrations, and has been the subject of campaigns by Global Exchange and the Organic Consumers Association. Deaf Dog Cafe in Sonoma County devised "Friends Don't Let Friends Go to Starbucks" stickers that can be seen on car bumpers all over the coast.

Starbucks is irrefutably the largest specialty coffee company in the world, with reported revenues of 2.6 billion dollars in 2001. In the whole world of coffee, though, Starbucks represents only one percent of the coffee supply, and all coffee shop purchases together account for about 5 percent. By contrast, Phillip Morris (owner of Kraft Foods) and Sara Lee together account for 25 percent of the world market.

In Uncommon Grounds (see review, page 37) Mark Pendergrast quotes Howard Schultz, the mastermind behind the Starbucks empire: "Starbucks is going to be a global brand, in the same genre as Coke and Disney." They play hardball, Pendergrast reports, moving in across the street from small independent cafes, and in some cases buying out the buildings where competitors operate.

But Starbucks claims social responsibility has been a part of its corporate structure since it was founded more than fifteen years ago.

Last year Starbucks pledged to purchase one million pounds of Fair Trade coffee over an eighteeen-month period. It partnered with Conservation International to buy shade grown coffee in Chiapas, Mexico and has contributed to CI's Conservation Coffee Program. It's created purchasing guidelines for labor and environmental standards. It supports national literacy programs and community projects in places where it owns stores. It claims that it does not use any genetically modified materials in its coffees and teas, and that it practices extensive recycling. The company has been widely credited with exemplary employee practices, including higher-than-average pay, and benefits-including stock options--for even part-timers.

What makes Starbucks a target of organizers? In part, people are reacting to those Coke and Disney aspirations, the threat that Starbucks is propagating cafe monoculture throughout a globalized world. In part, it may be the company's desire to be seen as a corporate good citizen. Writing in the Financial Times, Alison Maitland quotes Ronnie Cummings, director of the US Organic Consumers Association: "We target them because they're the only big coffee company that pretends to be socially responsible. It's better to start with them. Kraft is never going to do anything. When you're the grassroots with limited resources, you have to pick your targets carefully."

The primary charge leveled at Starbucks is that its do-good actions are just greenwashing, enough to give an appearance of environmental and social concern, but far less than the company is capable of. In response to the company's pledge to buy a million pounds of Fair Trade coffee, Global Exchange said it was pleased with any increase in Fair Trade purchasing, but argued that a million pounds only represents one percent of Starbucks's business, while almost all of the other hundred companies offering Fair Trade certified coffee meet a minimum standard of five percent. (On the other hand, industry giant Folgers simply said "No" when Global Exchange challenged them to begin offering consumers any Fair Trade options).

Starbucks draws mixed reviews from its fellows in the specialized coffee industry. Paul Katzeff, CEO of Thanksgiving Coffee (a sixth of whose purchases are Fair Trade), agrees with the charge of greenwashing, calling Starbucks's practice "offensive." But is Starbucks an evil empire? "Absolutely not. If all US businesses were modelled after Starbucks, the world would be a better place. They treat their workers exceptionally well."

Mark Inman, co-owner of Taylor Maid Coffee, credits Starbucks with introducing specialty coffee to a new audience, one that he hopes will migrate to companies such as his as it appreciates better coffee. He has worked with Starbucks on questions such as organic and Fair Trade, and believes that the company's concern to do better by farmers is sincere.

As for fears Starbucks will destroy cafe culture, Katzeff isn't worried. Starbucks, he says, offers "a guaranteed mediocre cup of coffee. They buy good coffee, but they don't brew good coffee." He adds, "When you go into a neighborhood coffee shop, you go in to buy a bit of the creator's spirit. Starbucks is all the same, you don't feel it. It's not a community center. It's a good place for a quick fix."

--SGS, EP, MKS