Everything but the Coffee

by Simon, Bryant

  Starbucks customers, of course, demanded their bottles of water, too. In 2005, Starbucks decided to cut out the middleman and boost its profits by buying its own supplier. That year it purchased Ethos Water. With the acquisition, Starbucks got its own water source and a product that came in a slick, slender bottle. But what it really got—and really wanted—was the global narrative of Ethos selling water, in the words of one journalist, to “the rich to help the poor.”17

  With each purchase of Ethos Water, Starbucks donates five cents to provide “clean water to some of the world’s poorest countries.” “Helping children get clean water,” announced an in-store sign over a wicker basket full of Ethos bottles. Under it, there was a picture of nine-year-old Anita. “Access to sanitation at her school,” it explained, “has helped improve health conditions in her community and dramatically changed her own education.” After visiting Ethiopia, Starbucks’ vice president for social responsibility, Sandra Taylor, told her boss Jim Donald another Ethos success story. For as little as twenty-five hundred dollars, she recounted, Starbucks built a well that “revolutionize[d] the lives of women aged 6 to 16 because they’re the ones who do the carrying of this water now.” With easy access to water, these women would, Starbucks promised, “be able to learn to read and go to school and do things we take for granted.”18 By 2010, the company pledged to contribute ten million dollars to fund water projects around the world.

  Just as it does with CAFE Practices, Starbucks promised that consumer action—that is, buying (“what we do, you do”)—can make the world a better place and make the beneficiaries of this largesse like us. It makes customers part of the solution and, even more, not part of the problem. But absolution doesn’t come cheap at Starbucks—it never did.

  Typically a bottle of water at a coffee shop costs between $1.20 and $1.50. At Starbucks, you pay $1.80 for Ethos Water—water that is no different in terms of taste or purity than other waters. That means that after making its five-cent donation to the world’s water deprived, the company still gets an extra twenty to fifty cents per bottle of profit. In a sense, then, they charge you to help the least fortunate. So while you get to feel good about yourself for doing your part, Starbucks gets added profits.

  The Ethos Water program isn’t the only time Starbucks charged its customers a premium for its blend of esteem and innocence. In the spring of 2007, New England–based reporter Bill Kirk noted that Starbucks charged $3.55 for a large latte, while Dunkin’ Donuts charged $3.05. “However,” he calculated, “the latte at Dunkin’s is bigger—20 ounces compared to 18 at Starbucks.” Kirk asked Starbucks spokesperson Jennifer Guebert why her company charged more for less. She led the journalist to believe that the price the company paid for its beans accounted for the 16 percent cost differential. “The key guiding principle is the relationship we have with farmers and the communities they live in,” Guebert said. “We pay premium prices for that coffee, and we want to make sure it makes a profit for the farmer.”19 What she didn’t say—and what Kirk didn’t seem to know—was that Dunkin’ Donuts used 100 percent fair-trade-certified beans for its espresso-based drinks. Even if Starbucks paid 10 or 20 or even 30 percent more for its coffee than its competitor—and it is doubtful that it did—that would add up to about forty cents a pound, a dime less than the price difference of a single drink. But that’s just one latte. A shot of espresso, the coffee in a latte, uses about fifty beans. Breaking this down, a pound of coffee contains enough beans for roughly fifty shots of espresso.20 That’s quite a multiplier for Starbucks, and to a lesser extent for Dunkin’ Donuts. When you do the math, then, it is clear that Starbucks, not the farmers, is the one raking in the profits on its lattes. But that isn’t the story that Guebert told; she talked about Starbucks serving the needs of the global community.

  Charging more while casting itself as a virtuous international actor isn’t new at Starbucks. In 1993, the company offered a “CARE sampler” in its mail-order catalog. “When you purchase this sampler of four distinctive coffees,” the company pledged, “we’ll donate $2 of your purchase price over and above our annual grant”—then a hundred thousand dollars per year—to CARE programs to improve children’s health and battle illiteracy around the world. Consumer Reports noticed that the CARE sampler cost exactly two dollars more than the other samplers in the catalog. A Starbucks spokesperson admitted that the extra money was exactly the money going to charity. In other words, the company didn’t really donate anything out of its own pockets, but people who didn’t read the fine print could easily have mistaken Starbucks for a selfless and different sort of corporation.21

  RWANDA

  Even in a place like Rwanda, Starbucks claims it can help, but again consumers have to pay a premium. In the mid-1990s, genocidal rage turned the former Belgian and German colony into a killing field. The Western democracies decried the bloodshed and sent some food, but they didn’t do much else. Hundreds of thousands died, in part, as a result of this inaction. Today the violence in Rwanda and the larger region has subsided somewhat, but severe economic, social, and infrastructure problems remain. The country does not have nearly enough roads or bridges or banks or credit. Because of this, it is one of the world’s poorest places. Annual per capita income barely reached a thousand dollars in 2000. The rate of infant mortality is even more startling: a fifth of all babies born alive in Rwanda each year end up dead. Most men cannot expect to live past forty.22

  What Rwanda does possess are excellent conditions to grow high-quality, complex-tasting coffee beans. Through much of the 1990s, NGOs and government agencies in the United States and Europe worked with the government there to develop the country’s coffee business and give small farmers a chance to climb out of poverty. They had to start at the very beginning. Rwandans generally don’t drink coffee, so aid workers taught them how to cup and taste beans to check for quality. Agronomists provided information on soil and fertilizers, and others delivered lessons on the export economy. In 2005, Starbucks stepped in to do its part to assist the battered nation when it introduced its Rwanda Blue Bourbon blend as one of its “Black Apron Exclusives.” “Taste a special coffee,” an in-store sign said, “that’s helping transform farmers’ lives.” “A Promising Future in Every Pound,” a company press release heralded.23 “Following the devastating events of 1994,” a store sign explained rather vaguely, alluding to Rwanda’s troubled past, “this new cash crop has given Rwandan farmers hope for a better future and helped them afford better education, medicine, and housing.”

  Better lives for farmers, even in Rwanda—that’s what Starbucks’ version of globalization promised. But again, the company asked its customers to foot the bill. Starbucks charged twenty-six dollars a pound for its Rwandan Black Apron coffee. But it didn’t, as Michigan State professor Dan Clay, one of the key government players in the postgenocide redevelopment of the country’s coffee business, told me, “pass this on to the farmers.”24 Dub Hay, Starbucks’ head of coffee procurement, essentially confirmed this point when I met him in his office at the company headquarters. “No, we didn’t pay any more,” he admitted.

  Turns out, Starbucks didn’t buy its Rwandan coffee from cooperatives or organized groups of small farmers, even though several existed in the country at the time. Some of the beans, one source told me (who insisted that I don’t use his name because he occasionally does business with Starbucks), came from “plantations.” When I asked him what he meant by this term, he fired back, “Exactly what you think I meant.” Starbucks purchased most of its Rwandan green beans, it seems, from large estate holders and from middlemen who bought coffee from individual small farmers. Many of the beans, then, were nameless and faceless. They couldn’t be tracked back to the exact place they came from—providing information, for instance, about labor conditions and sustainability. What’s more, while the Starbucks’ intermediaries may have paid a decent price for Rwandan beans, they surely didn’t pay as much as several politically progressive smaller U.S.-based roasters
, with higher overheads, did.25

  • • •

  “I was perhaps God’s gift to coffee,” Paul Katzeff proclaimed to author and coffee authority Mark Pendergrast. In Katzeff’s eyes, God looked more like Che Guevara or Daniel Ortega than Jerry Falwell or Ronald Reagan. Frustrated when he couldn’t make an impact fast enough in his job as a social worker, the New Yorker moved to Aspen, Colorado, in 1969 to open a coffee shop. A few years after that, he settled in Northern California and started roasting his own beans and selling them through a mail-order catalog. Launching Thanksgiving Coffee didn’t blunt Katzeff’s left-leaning politics. When the Sandinistas challenged the pro–United States, pro–big business, anticommunist Somoza regime, Katzeff headed to Nicaragua. He imported coffee from the country’s small farmers and donated a portion of the proceeds to the revolutionaries. Several years later, he poured “blood”—red paint—over the dais at a meeting of the specialty coffee association, protesting against the group’s reluctance to sell only “just” coffee.26

  By the 1990s, Katzeff took his social activist streak to Rwanda. These days he pays former Hutu and Tutsi farmers, deadly foes a decade ago who are now working together in cooperatives, as much as $1.90 per pound—or more than 60 cents above the fair trade price—for green beans. He charges his customers $11.50 for twelve ounces of this coffee. In other words, he spends 25 percent more than Starbucks on the beans (and knows exactly what farmers are getting the money) and charges almost 50 percent less than Starbucks for the product. On top of that, he gives money to schools in coffee-growing areas where he buys from and donates “a portion of the profits from each package sold to the Dian Fossey Gorilla Fund to preserve and protect mountain gorillas in Rwanda.”27

  In contrast, Starbucks is “buying from the already rich,” an angry Katzeff told me. In a much calmer voice, Dan Clay told the same story. “Starbucks bought almost exclusively from privately owned enterprises, from fairly wealthy investors . . . at the washing stations.” Again, Starbucks officials essentially confirmed Clay’s version of the story. “Coffee is grown by small holders,” Audrey Lincoff, a Starbucks public relations person wrote to me when I asked for clarification, “and delivered to washing stations.” In other words, Starbucks buys the coffee for less than Katzeff and gets it through some big players, but mostly from middlemen who certainly take a percentage off the top before paying farmers. But again, that wasn’t the message delivered to U.S. customers. I was led to believe from the in-store signs and press releases that the company’s Rwandan Black Apron coffee would help the little guy— small-scale farmers and the survivors of the 1990s killing sprees in this distressed corner of the world.

  At a Starbucks outlet near Penn Station in Manhattan, I found a brochure explaining that Starbucks awarded fifteen thousand dollars to local communities whose coffee got selected as a Black Apron Exclusive. Grants funded projects in environmental protection, education, transportation, and improving coffee-processing facilities. After it developed its Rwanda Blue Bourbon coffee, Starbucks awarded fifteen thousand dollars to the towns of Karengera and Gatare where the washing stations it got its beans from were located. “The money,” a company press release said, “will be used to make immediate improvements to these station communities, improving efficiency and coffee quality, ultimately ensuring that farmers who use these stations will realize higher quality coffee and obtain higher prices for their crops.”28 While the company hinted that this money would help Rwandan farmers—who on their own purchased cows to supplement their diets and provide natural fertilizer from the money they earned from selling to Western coffee companies—the direct grants helped Starbucks and its private sector supporters the most. Money to “improve efficiency” was not exactly a gift. There was no guarantee that these funds would trickle down to farmers or lead to better health care for their families or save endangered wildlife. Surely this kind of giving—just like buying from the already well-heeled—doesn’t change the balance of power on the ground in the poorer corners of the world. Actually, it translated into an investment— paid for by consumers of the pricey Black Apron coffee—in Rwanda’s coffee infrastructure. If the country could produce more coffee, farmers would probably be better off, but also Starbucks would have another source of beans, something the company was constantly on the lookout for as it opened a new store every six hours in the middle of the first decade of the twenty-first century. All the better if the beans came with a compelling narrative.29

  NEWBORN UNIVERSALISM

  “A Better Living for Farmers,” announced the sign at the Starbucks by Penn Station, equals “Better Coffee for You.” Hammering home the point, Starbucks in another sign reminded customers, “You can feel good about your choice of Starbucks because we work together with farmers to improve their livelihood . . . it’s how we do business every day.” Again the message is, we can have it all: better coffee and better foreign relations. It says, moreover, that buying right can get you esteem and the very best products at the same time. In Starbucks’ version of globalization, everyone—the company, the customer, and the small grower (in that order)—wins. Starbucks gets more coffee and higher profits (without, by the way, having to deal with government regulations); customers get high-quality, better-tasting drinks made from clean, safe beans; and growers get the money that trickles down to their farms. But, most important, consumers get to feel better about them-selves and the state of the world. For this, Starbucks reasons, it can charge a premium. The evidence suggests customers will pay this fee as long as the company’s image holds up.

  Many of us, it seems, will pay extra for global peace of mind, a desire that has gained added value in recent years. In 2006, University of Munich and London School of Economics sociology professor Ulrich Beck talked about how 9/11 and other events influenced American ideas about globalization. “A strange kind of discourse has developed in the United States,” he observed. “The idea appears to be that it is necessary to turn everyone into Americans, so that Americans are able to live in safety in a world without borders.”30

  Starbucks is doing its part to calm anxieties in the United States about conflicting global values systems. With stores from Canberra to Chicago, the company appears to be everywhere. And of course, every Starbucks is predictably the same—the stores look alike and the drinks taste the same. Latte drinkers in Bali and Baltimore all can imagine themselves, if they want, doing the exact same thing as others like them around the world. For some, this suggests a kind of reassuring cultural common ground. Starbucks’ presence everywhere middle-class men and women gather means that we, the collective middle, are all the same, that we all want the exact same things.

  The Starbucks farmers’ stories—the corpumentaries—echo this reassuring message by creating another imaginary cultural bridge bringing people together. All of the tales follow a similar narrative path. At the start, we aren’t, the stories suggest, the same. Highlighting this theme, each opens with a scene in a colorful, crowded colonial plaza or in a rustic, remote mountainside village. Traditional music swells in the back-ground. Locals sing and dance, reenacting some older, foreign ritual. The subjects aren’t quite modern—and that is the point.

  By the end of the films, however, the local communities have changed. By paying higher prices, dispensing expert advice, and contributing to washing stations and schools, Starbucks has helped transform these places. Locals pay tribute and bear witness to the power of the caring corporation. They talk in their native tongues about sending their kids to college or taking care of the planet or sanitizing their villages; in other words, they talk just like any middle-class person sitting in a Starbucks somewhere would talk.

  Take the case of Mario Sanchez. The owner of an eleven-acre coffee farm in southern Costa Rica—hardly “small” by Latin American standards, where many families work plots a third of this size—talks in one film about his relationship with Starbucks. (His farm, by the way, is part of an even larger family operation with more than one hundred acres of c
offee fields.) “The principal benefit,” he insists, “isn’t money; it is family harmony, the good relations in each of our homes, the fact that our children are studying in primary schools, high schools, and the university—this is worth more than money.” With the farm’s success, the narrator continues, “the first Sanchez ever went off to college last year, a rare event. Two more cousins followed this year.” One of those college students appears on screen and says in perfect English that she wants to give back to her community. Then, the narrator jumps in and explains, “The cooperative [seemingly the larger family farm, not a collective of small farmers] is now setting aside money so that others can go to college as well.” In yet another corpumentary, the wife of a Starbucks coffee farmer “proudly” displays the family’s gleaming new bathroom with running water and an overhead shower. In Spanish, she says, “It’s great, like rich people have.”

  A Starbucks in-store sign tells the same story of post-9/11 reassuring universality in another way. “Here’s wishing you ‘wholehearted happiness,’ ” says a well-dressed, healthy-looking woman standing next to a field of coffee plants. Below the picture, the poster reads, “That’s what ‘muan jai’ means in North Thailand. The hill tribe farmers there speak in a unique dialect, but the terrific coffee they produce is universal. Try a cup and you will understand.”