Why Starbucks might be a force for good

Food politics
Why Starbucks might be a force for good

I think that Starbucks gets a lot of unfair flack, and I’ll admit that I’ve dished some out myself in the past.

The ‘is Starbucks evil?’ question is one that’s regularly tossed around.  I don’t think there’s a definitive answer.

Any corporation the size of Starbucks will attract some form of criticism, and Starbucks has rightly or wrongly received more than its fair share, but could it be possible that the coffee juggernaut might actually be doing some good?

Their coffee isn’t as good as it could be, and it pales into bland mediocrity stood alongside some of the smaller independent shops in and around Leeds, but there’s something about the place that demands respect, commands it, even.

There are several reasons for this, and some of these reasons might seem counter-intuitive. 

The first reason is to do with Starbucks’ power to break new ground.

Starbucks open up markets.  They’re responsible for getting people interested in drinking coffee, and once they’re interested, they tend to  seek out new outlets and better products.  It’s easy to suggest that Starbucks’ tactic of opening many stores in a city is an attempt to choke the competition, but I’d look at this in precisely the reverse – Starbucks stimulates the market and actually creates more space for other smaller operators to move in.  Slate explains in more detail.

Leeds is a great example of this.  There are ten Starbucks in Leeds city centre, the furthest out being in Headingley.  There’s also a good number of Cafe Nero and Costa Coffee stores as well.  Does this saturation of the market stop new entrants?  No, it doesn’t.  Opposite and La Bottega Milanese are proof of that, along with several other smaller outlets selling good drinks.

Starbucks has got people interested in coffee, and they’re drinking more of it.  They’ve created a market, and others are benefiting from it.  This is a good thing.

The second reason I respect Starbucks is more controversial.  I think they’re good for coffee producers.

As Taylor Clark points out in his book Starbucked, “nobody has done more to generate an insatiable thirst for high-quality coffee than Starbucks”.  The demand for the highest quality beans has risen exponentially as Starbucks has grown, with the converse effect that speciality producers have paid more and more to secure regular and robust supplies of the best quality beans possible.  This puts the finest Arabica beans at a premium, which in turn helps the farmers.

I’m not suggesting for a second that Starbucks have knowingly done this, but their entire business is predicated on the quality of the drink in their customer’s cups, and they’ve created a nation of coffee connoisseurs out of us, so they have to deliver.

As far back as 2005, Starbucks were paying 23% above the New York Board of Trade’s benchmark ‘C’ price.  Even five years ago, this is indicative of a company that needed to secure supplies of the very best beans and were prepared to pay farmers a premium to do so.

As time moved on and the reach and influence of the Fairtrade movement grew, Starbucks have gradually started to buy Fairtrade beans, and have emerged as the world’s biggest purchaser of Fairtrade coffee, switching its entire supply of coffee for UK espresso-based drinks over to Fairtrade in September last year.  The benefits of a stable price for the grower are clear, and the Fairtrade movement goes some way towards delivering some sense of market stability.

This isn’t to say that Fairtrade is entirely beneficial – I still hold some reservations about fixing prices in a system that leaves the margin between production cost and sale price in the hands of the producer, which would, on the face of it seem to have a detrimental affect on quality.  If a grower is paid x, they can make more money by pushing production costs down and selling inferior beans to widen the market.

I’ve had some absolutely rank cups of Fairtrade coffee in my time, but on the whole, this doomsday scenario of bad quality and high prices doesn’t seem to have occurred yet, largely thanks to the schemes’ quality control standards, and probably more importantly, because of Starbucks’ fussiness over the beans they take.

Starbucks’ actions could be seen as either a marketing stunt or a simple endorsement of a worthwhile scheme.  It hardly matters.  The end result is that the world’s biggest chain of coffee shops is again taking a lead.  Their purchasing strategy may have been relatively altruistic anyway, but now they’ve got the badge to prove it.

This leaves an interesting question.

Is the best way to be socially conscientious and to help coffee growers simply to stimulate demand for high-quality, premium beans by buying coffee from Starbucks, which also encourages the local market and helps independent domestic coffee shops to flourish?

Feels a bit odd, doesn’t it?

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