Everything but the Coffee

by Simon, Bryant

  In March 2003, Ambese Tewelde opened a coffee shop in Mekele, Ethiopia. Customers purchased four hundred cups of coffee a day from him. Tewelde called his café, with a green-and-white, rounded logo, Starbucks Coffee. This was no secret; Reuters ran a story about his business with a picture.35 Typically, Starbucks mobilized against even the slightest copyright infringement. One time it sued a woman named Sam Buck for opening a store with her name above the door.36 Another time it took legal action against a handful of Haidas, Canadian aboriginals, after they had started a business in their town of less than two thousand people called “Haidabucks.”37 But the Seattle version of Starbucks did not call in its high-priced lawyers in the Ethiopia case. It already had enough PR problems on its hands about control over words in the African nation.38

  Ethiopia is generally considered the birthplace of coffee. More than a thousand years ago, the story goes, a goat farmer named Kaldi noticed his herd dancing one day after gnawing on the red berries hanging from the bushes ringing the pastures. Tired himself one day, he decided to try the stuff. He perked up and started skipping along with his goats. Soon Kaldi made the berries part of his daily diet. One day, a monk from a nearby monastery spotted the farmer dancing with his goats. He, too, wanted some of that energy, not to shimmy but to stay up and study. Soon a fellow monk came up with the idea of boiling the beans and drinking the hot brew before lengthy religious services. News of coffee’s kick spread, and more and more monks throughout the African kingdom started drinking it to extend their devotion time.39

  Ethiopians continue to grow wonderful coffees celebrated by experts for their floral aroma and soft lemony finish. These same qualities drew Starbucks—ever eager during its explosive growth period for new supply channels and products—to Ethiopia. But it came for the story as well as the beans, for what one observer called, the “clearly . . . intangible value in the specialty coffee of Ethiopia.”40

  Starbucks knew that stories, like the ones about Santiago Rivera and corporate-led changes in farmers’ lives, sold goods, especially ordinary goods, in the postneed economic order. When it came to Ethiopia, Starbucks couldn’t resist the narrative of selling “exotic” and “cherished” beans from the birthplace of coffee. When Starbucks first introduced its Black Apron coffees, the company’s “premium line” of “rare and intriguing coffees available in limited quantities” from around the world, it went straight to Ethiopia. In 2004, the company featured “frequently requested, but seldom encountered” Ethiopian Harrar. A year or so later, Starbucks started selling naturally dried beans from Ethiopia’s Sidamo region as another Black Apron coffee. “Inspired by fine wine-making” (by whom and from where, we don’t know), the company said about these beans, “this naturally processed coffee from Ethiopia’s Sidamo region resulted from a collaboration between Starbucks and coffee farmers.” (What kind of coffee farmers—big, medium, or small— again, the company doesn’t say. Nor does it say anything about how this collaboration worked.) “To achieve its lush black cherry notes and exotic layers of coca and spice,” the story continues, underlining the familiar promise of discovery and the buyers’ expertise, “the coffee was sundried on raised beds before pulping.” Making the coffee taste even better, the beans came, according to the company, from “the small backyard farms of Ethiopian growers.” To convey the essence of the story, Starbucks provided illustrations. Standing in front of abstract-looking plants on the coffee label is a woman with jet-black skin and an angular face in profile balancing a tall headpiece. She looks like she came off a National Geographic cover from a decade or so ago. Below the image ran the words “Exotic Spice and Black Cherry Notes.” Starbucks, in fact, liked the coffee story and the hint of the foreign that went with it so much that it did what brands do these days: it applied for and then gained a trademark for “Shirkina Sun-Dried Sidamo” coffee.41

  Coffee remains Ethiopia’s most important industry. As many as fifteen million men, women, and children—or roughly a quarter of the entire population—depend on the crop for their livelihoods. Very few of these families, however, have running water or electricity. Even fewer have access to decent schools and adequate hospitals. Only a fifth of all Ethiopians have clean drinking water. Nationwide, the average life expectancy is forty-six years, a full thirty years less than in the United States.42 Most Ethiopian coffee farmers, moreover, tend to small plots often less than an acre in size, making it even harder to earn a living wage. Very few, in fact, earn enough in a day or even two days to buy a tall cup of Starbucks coffee. According to estimates, most make some-where between 1 and 3 cents for each pound of high-end coffee that they sell to Starbucks and other specialty roasters in the United States and Europe.43

  To combat the country’s crushing poverty and weak position in the global export economy, Ethiopian government officials ripped a page out of Starbucks’ new economy playbook. They tried to turn words and stories into money and profits. Ron Layton, a New Zealand–bred, Washington-based lawyer advising the Addis Ababa government, talked about the nexus of power in the global economy. “Intellectual property ownership,” he argued, “now makes up a huge portion of the total value of world trade, but rich countries and businesses capture most of this.”44 The powerful, he certainly knew, are always reluctant to give up their advantage. Still, Ethiopian leaders and their advisers wanted in. They proposed trademarking—just like Starbucks did—the names of the country’s most famous (and valuable) coffees—Harrar, Yirgacheffe, and Sidamo. Though not every development and coffee expert agreed with these moves, the pro-trademarkers argued that by controlling the names—that is, owning the right to use the words—Ethiopia could control markets, raise export prices, and help small backyard farmers.45

  Obviously, these changes would benefit the Ethiopian government, giving it a more powerful role in national and global economies. But state leaders and some NGOs predicted that farmers would feel the impact of trademarking most directly. Westerners sympathetic with the plan estimated that “control of the name brands could increase Ethiopia’s coffee export income by more than 25 percent—or $88 million annually.”46 With this money, families could send their children to school and gain access to better health care.

  Canada and the European Union immediately recognized Ethiopia’s trademark petitions. In the United States, the African country was able to trademark the name Yirgacheffe. But control over the other two names hit a wall. Using its pull at the United States Patent and Trademark office, the National Coffee Association of U.S.A. (NCA) blocked Ethiopia’s move to trademark Harrar and Sidamo. As several sources pointed out, Starbucks belonged to the trade association and marketed coffees using these same two names. The NCA said that if Ethiopia succeeded in obtaining trademark control, its coffee would become “too expensive.”47

  Oxfam, the Ethiopian government’s most visible and ardent international ally in this fight, charged Starbucks with throwing its weight behind the NCA blocking move. The British-based international advocacy group didn’t just pick Starbucks to focus on by chance. The group, which had actually received support from Starbucks in the past, knew that brands in the postneed order generated two-way conversations. When a company promised things, like Starbucks did, customers and others had the chance to hold it accountable. That’s what Oxfam tried to do. It tried to make Starbucks live up to its own brand mythology and foreign policy pledges. In an advertisement that ran in the Seattle Times in March 2007, Oxfam accused the hometown company of refusing to “sign an agreement recognizing Ethiopia’s ownership of the country’s coffee—the same coffees that millions of poor farmers depend on to make a living.” Like Starbucks, it illustrated its narrative. The Seattle Times’ print protest featured a picture of an older man, presumably a small farmer, wearing worn clothes, standing alone in a field of coffee plants. That presumably was where he would remain if Starbucks didn’t let go of the words.48

  “We have not been involved in trying to block Ethiopia’s attempts,” Dub Hay, the head of coffee procuremen
t for Starbucks, told BBC radio. “We did not get the NCA involved—in fact, it was the other way around. They were the ones who contacted us on this.”49 Nevertheless, Starbucks made it clear that it felt the Ethiopian government was heading down the wrong path—a path of controlling words that the coffee company itself had headed down many times before. Reading between the lines, what Hay seemed to say was, what’s good for us—trademarking and monopolizing the story—might not be good for you.

  Looking to regain the upper hand in what quickly became a PR showdown between Starbucks and Oxfam and the Ethiopian government, the company put Hay on the news and on YouTube. Ethiopian coffees, Hay argued, should not be trademarked because they are generic terms for coffee rather than “distinctive and valued marks.” At one point, he maintained that the Ethiopian government’s actions might be “against the law.” Later he backed away from this comment. But he continued to maintain that what really concerned him was “what trickles down to the farmers.” Certification, he contended, represented a better model of global economics for small coffee growers. Used by the producers and marketers of Washington apples, Idaho potatoes, Florida oranges, and Roquefort cheese, these kinds of programs guarantee that products come from a specific place or region, adding value to the item, but at the same time they don’t stop—a key for Starbucks—other companies from using the names in their own branding campaigns. It also didn’t involve any kind of government regulation, always a plus, it seems, for large companies—except, of course, when they find themselves in real financial trouble and need a bailout.50

  Hay’s video and pressroom performances didn’t ease the pressure on Starbucks. Unmoved, Oxfam again stepped up its campaign. Ninety thousand people around the world signed petitions circulated by the organization urging Starbucks to recognize Ethiopia’s right to trademark its coffees. Trying to diffuse the situation (read: make it go away), Dub Hay went to meet with Ethiopian government officials. Neither side at this point wanted to concede the control of language to the other. Without a deal on trademarks, Starbucks unilaterally announced it would lend technical assistance and make microloans available to small farmers in Eastern Africa as well as double its coffee purchases in the region.51

  Still, Ethiopia and its allies wanted the words. Hay and Jim Donald, then the CEO of Starbucks (Schultz was a doing a stint as chairman), returned to the airwaves saying—without actually saying it—that they knew what was best for African growers. “I know that we are doing what is right,” Donald stated, “and in the best interests of coffee farmers and of the country by making sure that we showcase African coffee names across the world.”52 Hay told a journalist from U.S. News & World Report, “It’s all about the farmer. Our goal is to get wealth down to the farmer.” Speaking to the Wall Street Journal, he elaborated, “The gift that Starbucks can bring to the [Ethiopian] coffee farmer is the guarantee of more business next year.”53

  “The gift.” Some listeners detected a hint of “coffee colonialism” in Starbucks’ self-defense.54 Was Hay saying that Ethiopians should be grateful to sell their coffee to Starbucks? Was he acting as a spokesperson for neoliberalism, saying that Ethiopian farmers should listen to him and not their own government officials? Was he saying that Starbucks alone knew what was best for African farmers? What made him qualified to say this? What he wasn’t saying (at least not yet) was that he would cede control of the words—the trademarks—to Ethiopia. Eventually, however, he did back down somewhat—again because of words.

  Through the first half of 2007, the Oxfam campaign went on with-out interruption. At the same time, and by coincidence, the documentary Black Gold played to packed audiences on college campuses and at downtown theaters. The film juxtaposed the grinding poverty of Ethiopian coffee growers with the over-the-top language and excessive cheeriness of Starbucks’ hired pleasers. Increasingly, as a result of the political and movie house challenges, Starbucks had a hard time portraying itself as an ethical global actor. Throughout the Starbucks moment, consumers paid Starbucks a little extra to absolve themselves of the sins of twenty-first-century globalization and alleviate their guilt over world-wide inequities. Would they still be willing to do this if the company looked like it wasn’t doing right by Ethiopia and its noble farmers pictured in the Oxfam ads (and in Black Gold and Starbucks posters)?

  On May 1, 2007, Starbucks and the Ethiopian government agreed in principle to a licensing and marketing deal. When the pact was announced, neither side said anything about trademarking. Both, in fact, were pretty quiet about the details in the agreement. But Starbucks did make a concession. It gave up control of a few words and agreed to help market Ethiopian coffees in its store. It also promised to increase its purchases and open a permanent farmer education station in the country. It made these concessions to keep intact its self-made narrative of being a good company.55

  But the damage was done in consumer niches where global good works mattered the most. In these buying circles, people paid extra because they thought Starbucks paid extra and that the company’s actions dissociated them from the problems of the developing world. When it came to Ethiopia, though, Starbucks seemed like every other multinational corporation—determined to keep the government out of things; worried about profits; eager for a steady supply of cheap raw materials; and convinced that it knew better than the people, the poor people of color, on the ground.

  • • •

  The same typicality, the same disconnect between professed values and practice, characterized some of Starbucks’ dealing with its U.S. workers. Around the time that stories ran about Starbucks and Ethiopia, the media picked up on reports of a union-organizing campaign of the coffee giant centered first in New York City. A group of media-savvy employees, affiliated with the legendary radical union, the Industrial Workers of the World, charged the company with unfair labor practices, including trying to keep employees from organizing by buying them pizza, baseball tickets, and gym memberships. A New York court agreed.56 Then Starbucks got caught with its hand in the tip jar—literally—using the quarters and dollars from customers to subsidize the pay of its managers. A California judge ruled the company’s actions illegal.57

  The real costs of the Ethiopia incident and the labor headlines, though, were to the company’s reputation. Douglas Holt, the L’Oréal Professor of Marketing at Oxford University’s Saïd Business School and an Oxfam ally, warned that Starbucks was playing “Russian roulette” with its brand, putting the company in “significant peril.”58

  As Howard Schultz returned as the company’s CEO and tried to revive the brand in 2007, he again and again talked about the company’s connection to farmers and its strong support for ethical consumption. More signs than ever before went up in stores telling stories about where Starbucks bought its beans and how much it paid. As the economic crisis of 2008 deepened, the coffee firm promised to buy more fair-trade and CAFE Practices beans. But increasingly, Schultz’s insistence was met with skepticism. Too many stories backed by too much evidence painted Starbucks as just another big company looking to capitalize on poverty and inequality. The stories contradicted the company’s professed beneficence and uniqueness, and they didn’t match customers’ desires for innocence and absolution. Maybe some would have stayed with Starbucks even if the coffee tasted stale and the stores looked a little too predictable, if the company seemed less like other big companies. But the news from Africa and the labor judges just made Starbucks appear like another ordinary, amoral corporation.

  I could see this transformation taking shape in the informal polls I conducted. When I talk to groups about Starbucks, I usually ask them what percentage of Starbucks’ coffee, they think, comes from fair-trade sources. Before 2006, audiences would answer, “Forty percent,” “No, 60 percent,” or “All of it.” Most overestimated Starbucks’ fair-trade purchases, which during those years stood at around 6 percent. When I asked the same question in 2007 and 2008, the responses flipped. People would now say, “One percent,” “Half a percent,�
�� or “None.”

  This sense of Starbucks’ ordinariness—that is, its lack of ethics—led to the peeling off of yet another segment of the Starbucks market. People who read news reports about Ethiopia or cared about fair trade would not look at someone carrying a Starbucks cup and think that he or she cared about the least fortunate. They might even see them as The Man, as a source of oppression. And in many places by 2007, there was a clear alternative: a coffeehouse down the same street—usually a local place—with a better global story to sell. Typically these cafés sold only fair-trade beans, and every once in a while they had farmers from far-away places in the stores to testify in person to the benefits of ethical consumption. Starbucks was out of that circle—a circle it had helped draw at the beginning of the Starbucks moment. By 2009, others stood in the center and weren’t about to yield the high ground. Foreign policy was now their competitive advantage.59

  Afterword

  When Starbucks’ star started to fade in 2007 and 2008, it was easy to see this as a modern-day refrain of Nero playing his fiddle during the fall of Rome. In October 2008, the New York Times headlined on the front page of the business section, “Goodbye Seduction, Hello Coupons.”1 The two writers suggested that marketers better get with the times and redo their pitches to stress the affordable over the aspirational. With foreclosures on the rise and reports of layoffs popping up every day on CNN.com’s breaking news ticker, it was easy to see Starbucks’ struggles—a shocking 97 percent drop in profits in the fourth quarter of 2008—as symbolic of the larger economic malaise and the collapse of luxury consumption.2 A Seattle cartoonist pictured the company’s siren icon begging for quarters on a street corner. Certainly people started to pinch pennies and cut back on four-dollar lattes as they watched the value of their 401(k)s cut in half. Tastes changed as well. Ostentatious items and overspending didn’t seem so hip in the face of soaring unemployment. Marking the changing aesthetic, twenty-something New Yorkers began to hold Great Depression parties for the New Depression era.