Central to the coffee industry’s marketing success has been the ability of major roasters and retailers to tie coffee brands to deeply held loyalties and identities around gender, class, and nationalism. For example, throughout the twentieth century, gendered messages centered on a “good wife’s” ability to serve up a “good cup” of coffee played an important role in coffee marketing campaigns. Journalist Mark Pendergrast describes one particularly revealing cartoon strip advertisement for Chase & Sanborn coffee in 1934. Rooted in gendered norms, and the acceptable terrain of domestic violence at the time, the ad makes clear the expectations of a good housewife, and the punishment or praise she might face depending on her success or failure in delivering a good cup of coffee to her husband:
“Here’s your coffee, dear,” a wife says to her scowling businessman husband over the breakfast table. “I thought we were too old to play mud pies,” he growls. Flinging the hot coffee at her, he yells, “What did you put in it this time? Bricks or gunpowder? See how you like it!” She cries, “Oh, you brute! I’m all black and blue.” In the final two frames she wears a catcher’s mask and holds a shield while offering him a cup of Chase & Sanborn. … Of course the husband loves it. “Take off the mask, darling. … This is too fresh and good to waste a drop.”5
Class identities have also long played a central role in coffee marketing campaigns, with large-scale fast food chains often targeting blue-collar workers and suburbanites, while specialty coffee roasters, like Starbucks, have emphasized white-collar, urban identities in their advertising and branding. For blue-collar workers, chain stores like McDonalds, Dunkin’ Donuts, and Tim Hortons have carefully crafted their images as places where people from all social classes can meet and take part in small luxuries, like drinking a good cup of coffee, offering an affordable form of social leveling. For suburbanites, who frequently come from wealthy or middle-class backgrounds, the appeal of chain stores does not stem from social leveling. Instead, suburbanites – as well as blue-collar workers – have often been drawn to chain stores on the basis of what historian Steve Penfold describes as “a sense of ironic pride in the lack of cultural alternatives” in comparison to the perceived snobby, artsy, or hippie culture of big urban cen-ters.6 The most successful coffee and food chains have astutely recognized and incorporated these class expressions into their marketing campaigns, often interwoven with gendered symbols and, in some cases, intensely held shared values and myths of community associated with nationalism.
Perhaps one of the most telling examples of the power of nationalism in advertising is the coffee and donut chain Tim Hortons, the largest retail chain in Canada, owning over 3,300 restaurants in the country and accounting for 8 out of every 10 cups of coffee sold there. Named after its founder, Tim Horton – a deceased professional hockey player, frequently depicted as a physical player, but a “gentleman” – the giant chain has emerged as one of the country’s most widely recognized symbols of Canadian nationalism. Through multimillion-dollar marketing campaigns first launched in the late 1990s, Tim Hortons has successfully rolled together manly, folksy, nostalgic notions around hockey in Canada and geared them toward consumption and corporate profits, appealing to Canadian nationalism and “tradition” in a country that generally has been overwhelmed by US culture industries and has historically experienced a weak popular nationalism.7 Tim Hortons’ marketing campaigns have been enormously successful, ensuring it steady profits and store expansion, and in many ways obscuring the fairly conventional, giant chain store nature of its everyday operations.
Beyond branding and advertising, it is important to keep in mind that most of the lead companies in the coffee industry have enhanced corporate profitability through the use of relatively low-paid, non-unionized workers to process, roast, package, distribute, and sell coffee. This has been the case in both the North and the South. In the North, coffee companies have drawn on low-paid, seasonal, or piecework employment to keep costs down in the roasting, processing, distribution, and marketing stages. In the South, Northern-based transnational companies have frequently owned and operated processing facilities for final cleaning, de-shelling, and classifying of green beans before export, also drawing on low-paid, highly exploited laborers. In both instances, women have often been subjected to the worst labor conditions. Due to highly gendered norms around male and female work, women’s wages have often been deemed as “subsidiary” to male “breadwinner” wages, allowing women to be paid less and receive fewer benefits, making them desirable workers for the coffee industry. At the beginning of the twentieth century, women coffee workers employed at a Hills Brothers factory in the United States were paid less than half of their male counterparts’ rates, worked 10 hours a day for six days a week, and were given only one week of vacation per year.8
While a great deal more can be said about workers in coffee processing and retailing industries, historically and today, two things are particularly important to keep in mind. First, although general labor conditions have improved over the past century, especially for Northern workers, millions of workers continue to confront poor working conditions, job uncertainty, and poverty. This is especially the case in the retail industry, which draws most of its workforce from “flexible” labor markets, characterized by low-paying, precarious jobs, limited health and pension benefits, a high annual turnover rate, and a comparatively high risk of unemployment. These jobs tend to be disproportionately concentrated in youth and “high-risk” groups (single mothers, new immigrants, racial and ethnic minorities, persons with disabilities, and adults with limited education), whose labor forms the backbone of the coffee industry in the North.9
Second, it is always important when assessing labor market trends to keep politics and power in mind. Coffee companies have not merely responded to labor market conditions, taking advantage of cheap labor when they can, but have often worked actively and aggressively to attain these conditions, lobbying governments, funding politicians and political parties, controlling the message on labor rights through their influence over advertising and the corporate media. Corporate interests are deeply interwoven with those of the capitalist state and giant coffee companies play important roles in pressing governments to develop policies that lower real minimum wages, employment and welfare benefits, corporate taxes, and labor and environmental protections, while aggressively fighting against unionization and workers’ rights to collective bargaining within their firms. This is the case even for those coffee companies with the best record of “corporate social responsibility (CSR).” Chief among them is Starbucks Coffee Company, the world’s largest specialty coffee roaster, as well as one of the world’s largest fast food chains, operating over 19,000 stores in 62 countries, employing over 200,000 people, and making $14.9 billion in revenue in 2013.10
Since its creation and rapid growth beginning in the 1970s, Starbucks has emerged not only as a major global coffee roasting chain, but also as a leader in CSR, winning countless awards and praise, predominantly from the business sector and corporate magazines. As neoliberal reforms have gradually eroded the commitment by states to socially regulate the actions of TNCs at home and abroad, the TNCs have stepped up their efforts around CSR, seeking to demonstrate that a more self-regulatory approach to corporate governance can address social and environmental concerns, as well as to counter specific accusations against them by global justice groups and protect their brand images. For Starbucks, this includes an array of international “sustainability” projects (including fair trade certification) as well as a payments and benefits plan for full- and part-time retail employees (whom Starbucks calls “partners”). Benefits to retail workers include higher wages than among most fast food competitors; basic medical, dental, and vision coverage; basic mental health and dependency treatment; and a variety of small additions, such as free beverages at work or a free pound of coffee per week. Consequently, Starbucks employees are better off than workers in competing retail or coffee chains, which generally have much higher
employee turnover rates; Starbucks’ annual employee turnover rate has been estimated at around 60 percent, compared to the industry average of an extraordinarily high 150–200 percent.11
And yet, while most workers would understandably prefer a job at Starbucks to poorer “McJobs” in other fast food chains, Starbucks jobs still remain relatively low-paying and precarious compared to most other sectors of the economy (its employee turnover rate still means that less than half of Starbucks workers last one year in employment), and Starbucks’ actions outside its CSR program have often been directed against broader and more substantive labor rights and social welfare provision at the state level. Despite offering top-down concessions to its workforce, Starbucks is fiercely anti-union. In one particularly telling example, Starbucks aggressively fought off unionization efforts at 10 Starbucks stores in Vancouver, Canada, from 2000 to 2005. Originally, workers at the store successfully unionized under one collective agreement as members of the Canadian Auto Workers, Local 3000 (CAW 3000). Workers negotiated two collective agreements with Starbucks, both of which provided minor concessions to workers regarding issues of seniority, wage improvements, and scheduling. Fearing the precedent this was setting, Starbucks refused to negotiate a third agreement. CAW 3000 was placed in a legal strike position and organized an “UnStrike” campaign, encouraging consumers to shop only at unionized Starbucks stores in British Columbia. Given the vulnerability of the workforce and the high employee turnover rate, Starbucks merely refused to negotiate and waited the campaign out until its main organizers left and the union collapsed.
Beyond its anti-union approach to labor relations, Starbucks has also participated in an array of corporate activities that call into question its broader commitment to social responsibility. In 2012, Starbucks UK came under fire for being a major player of corporate “tax avoidance” – a process whereby corporations use a variety of complex loopholes in the tax system to pay little or no tax. Despite making over £3 billion in sales in the UK in 14 years from 1998 to 2012, it was revealed that Starbucks paid only £8.6 million in corporate taxes – less than 1 percent of its sales figures. Public protest in the UK eventually compelled Starbucks to voluntarily agree to pay an additional £20 million in taxes. Such tax avoidance measures have the effect of denying the state significant public revenue, increasing the tax burden on middle-class income earners while starving public services of much-needed funds. An interesting and telling comparison to these tax avoidance measures are the political activities of Starbucks’ billionaire CEO, Howard Schultz, who has spent considerable money and effort over the past several years publicly promoting government austerity and national debt reduction in the US – Starbucks management thus avoids paying corporate taxes on the one hand, while scolding government for spending beyond its means with the other.12
The necessity of putting shareholder value and corporate profits first means that Starbucks’ CSR can only entail modest, top-down initiatives entirely within the corporation’s control and oversight, while Starbucks continues to oppose wider “socially responsible” activities such as worker unionization and collective bargaining, and corporate taxation. Starbucks is certainly not unique in the coffee industry and, in fact, compared to other coffee giants is indeed deserving of the title of “ethical” leader. The problem is not Starbucks, but CSR itself. Regardless of what ethical intentions individuals managing the giant coffee transnationals may or may not have, in the end they run immense, hierarchical institutions designed with one primary objective: to enhance corporate profitability in order to survive, thrive, beat out competitors, and enrich private shareholders.
While the development and popularity of CSR are something specific to the current era of neoliberalism, its fundamental objectives remain rooted in the long history of corporate activity in the coffee industry. First, CSR initiatives are designed in a top-down manner to offer a minimal form of social protection to stave off criticism and counter bottom-up demands for worker unionization, collective bargaining, and more universal and extensive state-managed social, labor, and environmental regulations – all things that major coffee companies have long fought against while profiting from a relatively precarious workforce. Second, one of the primary objectives of CSR is to protect or enhance corporate brand images, which the major coffee companies have constructed over decades through persistent multimillion-dollar marketing campaigns. In the case of Starbucks, one of the keys to its marketing success has been to provide a comfortable, trendy café environment and a sense of local community in its stores. This requires attention not just to interior design and customer service, but also to public relations aimed at making consumers feel good about drinking Starbucks’ coffee – as if they have connected with, rather than exploited, workers and farmers. Starbucks has been particularly adept at using CSR in this regard, actively promoting its “ethical” image in store displays, pamphlets, products, and online. CSR thus represents a new twist on two long-standing themes of the coffee industry: minimalist labor standards, and maximalist marketing campaigns. It is in these areas, by design, where CSR has its greatest impact.
The fair trade alternative
While CSR offers a top-down, shareholder-driven approach to ethical trade, it is not the only approach, and others have emerged and developed over the past decades that are more bottom-up and “stakeholder” driven, involving direct participation from the poorest and most vulnerable in the coffee chain. Beginning in the 1970s, an ever widening array of issue-based products have hit supermarket shelves, part of what sociologist Marie-Christine Renard refers to as “interstices in the midst of prevailing tendencies” in a global agro-food system characterized by industrialization, corporate monopoly, mass distribution, and the homogenous consumption of international brands. Against these tendencies, “niches and micro markets” have emerged in the North to appease a minority of consumers who distrust TNCs and desire products that express cultural diversity and “old-fashioned” nostalgia, while making a variety of health, “natural,” organic, ecological, and ethical claims – with wide-ranging degrees of precision and accuracy.13
Among this growing ethical consumerist movement, fair trade certification has been a world leader, having among the greatest transparency and most rigorous standards. The fair trade network is a formal system of nongovernmental organizations that connects peasants, workers, and craftspeople in the South with partners in the North through a system of “fair trade” rules and principles. The network was first developed in the 1940s and 1950s on the initiative of alternative trade organizations that sought to provide assistance to poor Southern producers by creating a trading system in which prices would be determined on the basis of social justice, as opposed to unpredictable international markets. By many of the founding fair trade organizations, such as Oxfam International, the network was considered part of a broader movement that promoted a new international economic order based on strong state intervention at the national and international level to support development efforts in the South.
In the 1980s, the orientation of the network changed as fair traders moved away from the vision of an alternative trading system and instead sought to gain access to conventional markets. This shift was led by the emergence of fair trade labeling initiatives, coordinated under the umbrella organization Fairtrade International (FLO), which have sought to certify conventional businesses willing to meet FLO’s fair trade criteria. According to FLO standards, fair trade goods are produced in the South under the principles of “democratic organization” (cooperatives for some commodities, like coffee, and freedom of association and collective bargaining for workers for other commodities where substantial numbers of small farmers do not exist, such as tea), no exploitation of child labor, and environmental sustainability. Goods are exchanged under the terms of a minimum guaranteed price, with social premiums paid to producer communities to build social and economic infrastructure.
The reorientation of the network initiated by fair trade labeling was, i
n part, driven by the desire to expand fair trade markets beyond their relatively small size. Equally important, however, were the changing political and ideological conditions signaled by the rise of neoliberal reforms and the decline of social regulation at the national and international level, including the collapse of the ICA in 1989. Seeing the writing on the wall, fair traders adopted a new, market-driven vision of fair trade based on non-binding, voluntarist commitments from private corporations. The result has been a significant success for the fair trade network, in terms of sales growth, which has increased substantially since the 1990s. This growth has been driven by the increasing participation of national and international bodies, such as the World Bank, as well as major TNCs, which view the fair trade network as a voluntarist alternative to more robust state regulation.
Although the fair trade network was traditionally based on handicraft sales, since the 1970s and 1980s coffee has been one of its most popular “flagship” products, riding a tide of growing popularity in Europe and North America for higher-quality, whole Arabica beans roasted by specialty coffee companies. Fair trade coffee’s growing success has had a generally positive impact on hundreds of thousands of coffee farmer families who have been able to participate in fair trade certification. Overall, and to significantly varying degrees, the existing and growing body of research on fair trade suggests that Southern partners have often been able to attain better access to social services through cooperative projects in health care, education, and training, as well as enhanced access to credit, technology, and economic infrastructure (such as processing and transportation facilities) as a result of fair trade.
At the same time, one must be careful not to exaggerate the benefits of fair trade, whose Southern participants are generally better off, but remain relatively poor. Widely cited research on fair trade coffee in Southern Mexico by Daniel Jaffee, for example, demonstrates that while fair trade certified farmers have attained higher household incomes, the majority of additional income has been spent hiring extra labor to meet fair trade and organic standards. The additional income, argues Jaffee, has been diverted from the participating fair trade family, even while it still benefits the community overall in the form of additional rural wages. Similarly, extensive research conducted by Christopher Bacon in Nicaragua, involving interviews with 228 coffee farmers, has determined that fair trade farmers have experienced higher incomes and reduced “livelihood vulnerabilities.” At the same time, prices paid to farmers are often still below the cost of production, over 70 percent of fair trade farmers reported a decline in their quality of life over the past few years, and cooperatives regularly have to sell up to 60 percent of their coffee on conventional markets due to the limited size of fair trade and organic niche markets. These sorts of outcomes are common throughout the fair trade network.14
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