Starbucked

by Taylor Clark

  Which is precisely why Starbucks recruited the Crouching Tiger, Hidden Dragon actress Zhang Ziyi, one of Asia’s biggest celebrities, to talk about the company’s generosity at a press conference announcing the gift — to avoid any kind of media coverage. As we saw in Europe and Japan, there’s really not much tailoring going on for each new country, just the same marketing finesse. Schultz implicitly admits as much. For every time he talks about being “locally sensitive” or coming into a new country “hat in hand,” he also points out with apparent relish how all the overseas Starbucks stores are “mirror images” of those in the United States. “I was in China when we opened in Shanghai,” he told London’s Guardian in 2000, “and you would have thought we were in New York.”

  In regions of the world where the American flag elicits scowls and creatively worded profanities instead of admiration, this resemblance has posed a significant problem. Starbucks routinely ranks high on lists of American companies that foreign consumers want to avoid, along with old stalwarts like McDonald’s and Marlboro; one 2004 survey of people in the industrialized G8 nations revealed that consumers characterize Schultz’s company as “arrogant, intrusive, and self-centered.” Many countries that particularly opposed the post-9/11 foreign policies of the Bush administration have also opposed the Starbucks invasion. Germany, for one, has frustrated the chain since its debut there in 2002. Starbucks planned to have two hundred German stores by 2006, yet it had just sixty at the end of that year. (A complicating factor: in the early 1970s, a Left Wing guerilla named Holger Meins terrorized Germany with bombings, eventually dying in prison after a long hunger strike; his code name was “Starbuck.”)

  As one might expect, Starbucks has suffered most from anti-American sentiment in the Middle East, but the animosity there was partially Schultz’s own doing. In 2002, Schultz (who is Jewish) delivered a series of speeches at various pro-Israel events, issuing dire warnings about what he perceived as growing anti-Semitism. “There are people in this world who want to eliminate [us] from the face of this earth,” he proclaimed at the Temple De Hirsch in Seattle. “Ladies and gentlemen, the 1930s are back, and we can’t ignore it any longer.” Schultz’s comments also implied that the Palestinians had done little to curb terrorism, and thus the whole ensemble — duly publicized via Internet and the media — infuriated several Arab groups. Boycotts ensued across the Muslim world. Schultz offered a halfhearted apology over his comments being “misinterpreted as anti-Palestinian,” yet the furor refused to die. Rumors emerged that Schultz financially supported the Israeli army. Because of the persistent uproar over his remarks, Starbucks decided in 2003 to close its six stores in Israel out of fear that they would become terrorist targets. Schultz, who had traveled frequently to the country, took the retreat hard and vowed to return. Israel remains the only country in which Starbucks has failed.

  But do these anti-Starbucks outbursts abroad actually mean anything? Not necessarily. Europeans might declare their intent to avoid U.S. companies like McDonald’s and Starbucks, but as the Slate writer Daniel Gross (no relation to the unionizer) has pointed out, so do Americans — and then they go buy Big Macs and Frappuccinos anyway. It’s a perplexing fact of modern consumerist life: our claims of loathing for companies and products often don’t line up with our actual behavior. Lynn Kahle, a marketing professor at the University of Oregon and past president of the Society for Consumer Psychology, offers a fitting illustration of this idea. “If you just read the paper here in Eugene, you’d think everybody in the world hates Wal-Mart,” he told me. “The letters to the editor are probably fifty to one against it. But drive by it, and the parking lot is always full of cars.” It’s the same with television; we bemoan its awfulness and its destructive effect on our minds more loudly each year, yet viewership continues to ascend nonetheless. And so it goes with Starbucks. The average consumer likely shudders at the thought of Starbucks peddling vanilla lattes amid the ancient splendor of the Forbidden City, but if she’s stuck in an airport, worn-out, and needing to kill time, is she really going to forgo that comforting double cappuccino just to make a point?

  The Forbidden City Starbucks managed to survive for seven years before a star Chinese news anchor roused enough popular indignation to force its closure, in July 2007. Yet at the rate the company expands, even the most vigilant cultural guardians could never keep up; while they’re busy rallying public support, Starbucks just opens fifty more outlets. So it is not surprising that when the company built a new store in 2005 at a Great Wall of China site in Badaling — reportedly the ten thousandth Starbucks in the world — Chinese consumers barely made a peep. And why would they? Zhang Ziyi, the actress, was at the grand opening.

  To Infinity and Beyond

  Jim Donald, the current Starbucks CEO, likes to sum up his company’s current growth philosophy in six words: “Lines mean we need more stores.” That is, if a Starbucks becomes too popular and people are forced to suffer the anguish of standing in line for more than three minutes, this means Starbucks is “not convenient enough,” so it must open another outlet as nearby as possible, ideally on the same block. This is what makes Starbucks remarkable and unique: it’s the only company on the planet that can pull this off. Humankind has never seen a business capable of saturating a city — or a country, or the world — with so many stores.

  But what happens when we take this mindset to its logical extreme, as Starbucks, left unfettered, surely will? Schultz says he plans to push his company to forty thousand stores (half of them in the United States, half of them abroad), yet he’s not going to pull the emergency brake once the scoreboard at company headquarters hits that magic number. At Starbucks, there are no brakes; slowing down has never been part of the business plan. The chain will ride this wave as far as it can. And consider this: if McDonald’s was able to pass the thirty-thousand-outlet mark with a few dozen restaurants in any given city, what might the limit be for a company that can plant them across the street from each other? Sixty thousand? Even more? “I think Starbucks’s prediction about how many stores they can have is actually very conservative,” said Coles, the Caribou Coffee CEO. “Who knows how many we’ll accept? I mean, who’d have ever thought that Starbucks could open two hundred coffee-houses in London?”

  America is a country that prizes entrepreneurialism, yet most of us find the idea of Starbucks popping up anywhere it can make a buck at least slightly distasteful. “My son was in China a few years back and saw that Starbucks in the Forbidden City,” said Jean Mach, the early Starbucks employee. “I mean, why even bother to send your child to China? You can just take him to a Starbucks here.” Some, like the antiglobalization advocate Bill Talen — who conducts choreographed in-store “retail interventions” as the “Reverend Billy” — have made the company a prime target in their crusade against the “Shopocalypse.” (These performances tend toward the esoteric. For instance, in one Starbucks-specific set piece, a man masquerading as a stockbroker and a woman playing a flower child enter a store separately and begin arguing loudly about what the Starbucks logo means to them; the act culminates with the woman pretending to be birthed as a way of reclaiming the mermaid symbol, yelling “What am I? I am becoming! I am the mermaid frozen in the logo! And I want my nipples back!” She then pretends to swim away.) The overarching idea is that Starbucks has gone too far. As J’Amy Owens, a Seattle consultant who has worked with Starbucks, put it, “The brand has grown beyond what is appropriate, past whatever it should have been. It’s like disco.” If there is indeed an ethical boundary on how much a chain should grow, globalization opponents say, Starbucks stepped over it long ago — it’s now just another contributor to the strip-malling of the planet.

  On the rare occasion when an interviewer levels the charge that Starbucks causes cultural homogeneity, Schultz adopts a harmless, somewhat goofy smile and laughs it off. Take this exchange with the 60 Minutes reporter Scott Pelley, broadcast in 2006:

  Pelley: There is a criticism, and you’ve heard it —


  Schultz: Yeah.

  Pelley: — that Starbucks is homogenizing the world [Schultz chuckles], that you’re taking the culture out of places, in China, in Japan, and Americanizing them.

  Schultz: I’ve heard that.

  Pelley: And it irritates you.

  Schultz: It’s not that it irritates me. It’s just, you know, off base.

  Pelley: And when people say you’re an evil empire bent on world domination, you say?

  Schultz: I hate that. I hate that. But I realize you’re always going to have critics.

  End of debate. Proceed to footage of Schultz having a sentimental moment in the halls of the Brooklyn housing project where he grew up. Obviously, Schultz wouldn’t gain much from addressing the question at length, but if he were so inclined, he might ask us this: Is Starbucks homogenizing the world, or is an already-homogenized world just clamoring for our product? After all, the company isn’t forcing anyone to visit its stores; if it weren’t giving consumers something they wanted, no one would stop in. So are critics simply scapegoating Starbucks for the habits and desires of its customers?

  Of course, Starbucks didn’t blaze this path of culinary cultural conformity. That honor belongs to McDonald’s, and, perhaps fittingly, the two companies come to resemble each other a little more every day. Recognizing that its only real competition is other quick-serve megachains, Starbucks has not only introduced hot breakfast sandwiches (à la the Egg McMuffin); it has committed itself to doing what was once unthinkable: building a fleet of drive-through stores. Donald — who came to Starbucks from Wal-Mart, where he was the last executive Sam Walton ever hired — has said that half of Starbucks’s future U.S. stores will be drive-throughs, another “convenience-based” policy that threatens to undermine the very tenets that first sparked the company’s success. As Schultz well knows, waiting in a cramped driver’s seat behind eight other exhaust-spewing cars is no pleasant “third place” experience. “When we first started opening drive-throughs, Howard was going out of his mind,” said Engle Saez, the former Starbucks marketing executive. “For him, a drive-through was too much like fast food. How can you give someone a full coffee experience in their car?” You can’t. But the extra cash is too good to pass up — the drive-through stores bring in $300,000 more per year than their automotive-inaccessible counterparts — so Donald and Schultz just try to dismiss the unsavory comparisons. “We are not the McDonald’s of anything,” Donald told the Associated Press in 2005.

  These days, Starbucks seems almost constitutionally incapable of passing up opportunities to increase revenue. Whereas Schultz once bristled at the very suggestion of adding syrup or nonfat milk to the chain’s handmade drinks, his company will soon unveil a new branded vending machine, which the development executive Gerry Lopez has cutely called “the smallest Starbucks store you ever saw.” Again, these hardly provide a gourmet experience; the machines just heat up and dispense nine-ounce steel cans that contain a chemically stabilized latte, mocha, coffee, or hot chocolate. And while newspaper articles used to trumpet the quality of the company’s coffee, readers today only see stories about its various entertainment ventures. Starbucks stores now sell a selection of books and CDs, and Schultz has even converted his cafés into billboards for a movie, Akeelah and the Bee. (With his company’s marketing power behind it, Schultz expected Akeelah to be a hit, but the film fizzled at the box office; still, the company is considering making feature films of its own.) Meanwhile, in its March 2007 issue, Consumer Reports declared Starbucks’s drip coffee “burnt and bitter enough to make your eyes water instead of open” — and in a twist that must have given company executives chills, the magazine claimed that McDonald’s brewed a far superior cup.

  Even an amateur business analyst would call this development an unambiguous sign that Starbucks should slow down and refocus on the things it excelled at for so long: making good coffee and providing a haven for its customers. Generally, Schultz ignores this sort of outside guidance; in the past, any suggestion that Starbucks’s course needed correcting would have only increased Schultz’s conviction that he was headed in the right direction. This inclination has steered him well before. Few would have predicted in 1987 that a house-wares salesman from Brooklyn could hook America on four-dollar Italian espresso drinks and build a handful of oddball coffee-houses into a global empire, yet he did.

  But while Schultz has publicly stated nothing but certainty about his company’s current direction, an internal memo leaked to Jim Romenesko’s Starbucks Gossip Web site in February 2007 tells a different story. In the message, titled “The Commoditization of the Starbucks Experience” and addressed to a dozen high-ranking company executives, Schultz bluntly assesses his chain’s fading cachet. “Over the past ten years,” he writes, “in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead [sic] to the watering down of the Starbucks experience.” Among his many criticisms, Schultz laments the loss of “romance and theater” with the new superautomatic espresso machines and complains that Starbucks stores “no longer have the soul of the past,” admitting that they seem “sterile” and “cookie cutter.”

  The antidote for these ailments, Schultz says in the memo, is a return to “the true Starbucks experience” — something he still believes in with the same passion of twenty years ago. “What people fail to understand is that we do not sell just a cup of coffee,” he told me in his Seattle office, eyes smiling. “As technology has evolved, and it has become both a tool and a burden on our individual and collective lives, I believe that we as people have lost a level of closeness and sensitivity around human connection and human contact. And we all long for that. I’m not trying to say in any way that we are the cure for all that ails humanity, but every single day, Starbucks brings people together.”

  And if this vision ever falters, Schultz can take solace in the prognostications of his onetime real estate czar, Arthur Rubinfeld. “Look,” Rubinfeld said. “Starbucks does have two of the four legal vices left in this country, if there’s liquor, sugar, tobacco, and caffeine.” So if all else fails — if droves of customers decide their local café makes better coffee, or if they finally get tired of seeing the chain’s outlets everywhere they look — Starbucks can always hit all four by introducing the Tequila Nicotine Chip Frappuccino.

  With or without Starbucks, the coffee-house phenomenon will continue to plow forward, at least until something better comes along to replace it. But the coffee-house is a hard act to top. “This is more than just a caffeine thing,” said Tom O’Keefe, the Tully’s chief. “If it was a caffeine thing, you could just pull into 7-Eleven and get a jolt. You could drink robusta, with three times the caffeine. But you don’t.” No other place but the coffee-house provides a safe urban harbor where one can spend hours reading, refueling, conversing, studying, or doing nothing whatsoever, all for the price of a mug of coffee. No other place allows one to connect with the community without having to, you know, actually interact with anyone. And pending the legalization of cocaine, no other place is going to supply the energy lift we need in order to confront the day. Regardless of what our personal opinions about the company might be, Starbucks saw that these things were lacking in people’s lives, and its rise paved the way for an entire industry dedicated, in a sense, to making daily life better. “Starbucks, I think, was the first to recognize that coffee really is the fuel of human life,” said Robert Thompson, the popular-culture professor at Syracuse University. “If the world runs on a thick, dark substance called petroleum, we run on a dark liquid called coffee.

  “I’ve actually never developed a taste for it,” he added. “Sure, I’ve had a couple of sips of it, but I didn’t like either of them. The interesting thing is, as a pop-culture person, you really have to be up on coffee and Starbucks. Coffee is really important to people, I’ve found.”

  EPILOGUE

 
The Last Drop

  I grew up in a small Oregon town called Ashland, which sits a few miles north of the California border, on a grassy valley floor in the Siskiyou Mountains. It’s the kind of open-minded, outdoorsy community where people don fleece vests whenever possible, and where clerks at the co-op market talk earnestly about the healing power of crystals as they scan your groceries. Subaru station wagons roam the city streets in packs, their bumpers broadcasting an assortment of faded liberal slogans dating back to the Reagan administration. To the extent that Ashland is known at all outside Oregon, it is as a summer destination for theater-loving tourists; the town is home to the popular Oregon Shakespeare Festival, which puts on about a dozen different plays a year. Recently, Ashland has become a trendy locale for wealthy Californians, who have built scores of McMansions out in the foothills. Still, it’s a nice place.

  For years, the local government protected Ashland’s appeal by keeping chain stores out of the town’s core, forcing them to open on the outskirts. This nonconformist ethic was part of the city’s collective identity. When the McDonald’s outlet down by the highway on-ramp went out of business, the entire town seemed to rejoice, as though this was proof of the community’s inherent goodness.