Musings, Nits, and Praises

Originally published in the January 2008 issue of the Main Street Journal

My love affair with coffee began in college at a cozy coffee shop on the outskirts of campus. And though I still prefer small-scale establishments, I’ve indulged in my fair share of grande americanos with cream and Splenda, white chocolate mochas, java chip Frappucinos and the like. Millions of people have.

By the time you finish reading this review, there’s a chance that another Starbucks will have opened its doors somewhere in the world. What was once a hip little upstart company now boasts over 15,000 stores (over 10,000 in the U.S.) in 43 countries, including places like Oman, Malaysia, and Lebanon—there is even in a Starbucks at the Great Wall of China. The coffee-purveying behemoth opens an average of six stores per day and over two thousand in a year, and if company owner Howard Schultz gets his wish, the number of stores will eventually swell to 40,000. At that point no one short of cave dwellers may be out of the gaze of the green mermaid.

But how did Schultz manage to thrive in a market that barely existed prior to Starbucks? And is the company the greed-driven, deleterious enterprise some of its detractors accuse it of being? Taylor Clark explores these questions in Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture (Little, Brown and Company; 271 pages). Clark, a Portland-based journalist, finds the company’s ubiquity troubling, lamenting that “Starbucks diminishes the world’s diversity every time it builds a new café, and I can’t help but feel troubled by this.” Although Clark is wary of the culture impact of the company’s global proliferation, anti-Starbucks readers hoping for an invective against the chain will be disappointed. Clark blends thorough, objective reporting with a double shot of wit for an enlightening, entertaining read.

Starbuck’s meteoric rise is indeed a marvel. As Clark explains, “The company took a commodity that Americans could get for a quarter at carts and diners, reshaped it into a luxury product, convinced customers to buy it hugely inflated prices, and built stores only a few blocks apart in every major city, yet patrons continue to line up in ever-greater numbers to fork over their money.”

By the time Howard Schultz became Starbuck’s vice president of marketing in 1982, the company had enjoyed over a decade of success in Seattle, but Jerry Baldwin and Gordon Bowker, two of the three original proprietors (Zev Siegl sold his share of the business in 1980) had no desire to expand beyond their six stores. Schultz, though, insisted Starbucks could succeed on a national scale. His visit to an espresso bar in Milan in 1983, which he described as nothing short of an epiphany, only further fueled his desire for the company’s expansion: “It was so immediate and physical that I was shaking . . . If we could re-create in America the authentic Italian coffee bar culture, it might resonate with other Americans the way it did with me.” Schultz convinced Baldwin to serve espresso-based drinks in the newest store, and the drinks, particularly the caffe latte, were wildly popular, but Baldwin still had no desire to build more locations. Frustrated, Schultz broke out on his own in 1985, opening the first of five Il Giornale espresso bars.

In 1987, Baldwin decided to sell Starbucks in order to move to Berkeley in order to manage Peet’s Coffee and Tea full-time—he had bought the company from his mentor Alfred Peet, several years earlier. With his dream within reach, Schultz scraped together nearly $4 million in financial backing and bought the company. Twenty years later, Starbucks is a fixture of the modern world.

Clark attributes the rise of Starbucks in part to the societal needs it filled. With the growing incomes of the 1990s came increasing workloads, and people sought “affordable luxuries” to relieve stress: “For frazzled, affluent worker bees looking to feel spoiled and get a kick of energy, nothing could beat a warm, custom-made espresso drink.” But more importantly, he believes, Starbucks provided a place for social connection, even if it was only to hang out alone in the company of others. Schultz latched onto sociology professor Ray Oldenburg’s concept of the “third place”—in fact, he has begun claiming he coined the concept—with home and work being the other two places. Some of the company’s idealism is laughably far-fetched. A video for new employees explains, “At Starbucks, we are purveyors of coffee, and tea, and hope. And a little bit of sanity.”

Of course, Schultz’s idealism, genuine or not, does not account for the Starbucks’ global dominance. Clark details the company’s meticulously constructed marketing and growth strategies, ranging from its customized drink-ordering lingo, to its store design templates, to its cutthroat expansion tactics. Some of the strategies, such as building outlets near dry cleaners and video rental stores to give customers two chances to buy coffee, are quite clever, while others, like trying to predict what colors will be fashionable for summer apparel in order to create Frappuccino flavors that match, seem downright silly. Still, there’s no arguing Starbucks’ success.

But success at what cost?

In Part II of the book, entitled “Getting Steamed,” Clark examines charges Starbucks’ critics commonly levy against the company, and his findings are sometimes surprising. Many opponents of Starbucks argue that its practice of placing new stores near competitors’ stores in order to leech business has crippled locally owned coffee shops. However, Clark suggests that for independent coffee shops “a Starbucks nearby is actually a cause for celebration.” According to the Specialty Coffee Association of America, independents comprise 57 percent of the coffeehouses in the nation, with the number of independents increasing 40 percent between 2000 and 2005. Clark believes one reason independents have thrived despite Starbucks’ proliferation is due to what they can offer consumers: lower prices, later hours, a more diverse food menu, better coffee. And for first-time coffee drinkers, Starbucks may serve as a gateway drug of sorts into gourmet coffee, inspiring people then to venture into an independent shop.

In assessing the criticism that Starbucks exploits coffee farmers by paying unfair prices for their product, Clark provides a limpid, concise explanation of Fair Trade coffee and questions how fair it really is to the farmers and whether Starbucks, which purchases only 2 percent of the world’s coffee every year, could impact the market through an increase in Fair Trade purchasing. He reveals that in 2006, the company paid an average of $1.46 per pound, $0.16 more than the Fair Trade price. Clark contends that the real culprits of farmer exploitation are the Big Four coffee conglomerates—Nestle, Proctor and Gamble, Philip Morris, and Massimo Zanetti—which buy enormous amounts of dirt cheap, robusta beans, accounting for 60 percent of the U.S. coffee supply. The best way to help struggling farmers is to refuse to drink those companies’ coffee. “It’s simple,” he says, “more demand for good beans leads to better prices for growers.”

Clark goes on to explore contentions of detrimental health effects of coffee (calorie-laden decadences like Strawberries and Crème Frappuccinos prove the only real threats), employee exploitation, and the destruction of cultural diversity. In each instance he retains an objective tone steadied by his research. Though Clark sides with those who claim Starbucks’ ubiquity increases cultural homogeneity, he doesn’t make a censorious attack on the company, conceding that the company has thrived in even the most unlikely of settings because people are drawn to their product—and that with the decades-old derision of “Charbucks” becoming increasingly true.

Clark’s well-informed, insightful commentary alone makes the book worth reading, but the book gets its charm from the Trivial Pursuit: Coffee Edition-worthy tidbits he peppers throughout and his penchant for humorous asides. Writing about the commercials for Columbian coffee which featured the marketing icon Juan Valdez, he declares, “The coffee must have been good, because no one ever seemed slightly apprehensive about drinking something given to them by a grinning, poncho-wearing guy who had been hiding out in their cupboard with a farm animal,” and when reflecting on coffeehouses’ bygone reputation as centers of intellectual and political discourse, he jokes, “It’s tough to imagine Camille Desmoulins hopping up onto a purple velour couch and hoisting a venti iced mocha for liberty.”

You don’t have to be a Starbucks fan or even a coffee drinker to enjoy Clark’s take on the java-peddling giant, but I contend the book is best enjoyed while slouched on a soft, overstuffed sofa, the book in your lap, and a hot cup of your favorite roast in hand.