A Further Perspective

Coffee and Gunpowder

Starbucks CEO's latest display of hypocrisy on a global scale.

By 10.28.13

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There was a petition at my local Starbucks the other morning about the government shutdown.

Starbucks Chairman and CEO Howard Schultz said he was circulating the petitions to his customers because of the “sad and striking realization that the American people have no platform with which to voice their frustration and outrage over the shutdown.” 

The Starbucks petition stated: “To our leaders in Washington, D.C., now's the time to come together to: 1. Reopen our government to serve the people. 2. Pay our debts on time to avoid another financial crisis. 3. Pass a bipartisan and comprehensive long-term budget deal by the end of the year.”

Warning that we are “on a collision course with time,” Schultz said “the responsibility of a company of any kind is changing because we have to provide for employees, help the communities we serve, and obviously, the government is not providing the leadership it once did.”

Next to the petition were Starbucks' latest two designer cups — a cinnamon-colored one, $8.95, “Made in Thailand,” and a glossy gray one, $9.95, “Made in China.”

The bottom line for a socially responsible company like Starbucks, according to Schultz? “We don't want to ignore what we believe are our responsibilities in the communities we serve.”

That sounds good, and on the counter adjacent to the Starbucks petition and cups from Thailand and China was a shiny new “Verismo System by Starbucks,” $149, “Swiss Engineered” and “Made in China.”

Using pods, the Verismo System makes espressos, lattes, and regular coffee, light or bold. The Veranda Blend pods, $11.95 for 12 cups, were marked “Coffee Roasted in the Netherlands, Coffee Packed in Germany.”

It was the same with every other pod in the display — Pike Place, Espresso Roast, Caffe Latte — all roasted in the Netherlands, all packed in Germany and all designed to deliver “The single cup home café experience” via a “Swiss Engineered” machine that was “Made in China.”

CEO Schultz says that Starbucks doesn't “want to ignore what we believe are our responsibilities in the communities we serve.” But hasn’t the company, for decades, ignored the possibility of having its coffee roasted in Detroit, or packed in Detroit, a community that's served by Starbucks and sorely lacking in jobs?

Today, the official unemployment rate of Detroit vastly understates the city's economic collapse because half the people have left town and are no longer around to be counted as unemployed. From a peak of 1.8 million, Detroit's population has dropped to 700,000.

Further, a Detroit News survey in October 2012 found that 40 percent of Detroit's residents planned to leave the city within the next five years, citing crime as the primary reason.

In 2012, Detroit blasted its way into second place among the nation's large cities in the number of murders per 100,000 population. “Every problem in this city revolves around jobs,” explained Lindsay Chalmers, vice president of nonprofit Goodwill Industries of Greater Detroit, a few years back.

And now Detroit is bleeding to death, shot by shot, night by night, and Starbucks is sending its beans halfway around the world to get roasted by the Dutch and packed by Germans while its CEO says inspiring words about the company’s responsibility to “help the communities we serve.”

It's 10,223 miles to get a coffee bean from Guatemala City to Amsterdam to Berlin to Detroit. Straight from Guatemala to Detroit, leaving out the European jaunt, it’s 1,900 miles.

Schultz says that Starbucks doesn’t want to ignore the responsibility it has to support the communities where it operates. The company could start by cutting the mileage on its globetrotting beans. On the streets of Detroit, the aroma of roasted coffee beans beats the smell of gunpowder.

Photo: UPI

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About the Author
Ralph R. Reiland is the B. Kenneth Simon professor of free enterprise and an associate professor of economics at Robert Morris University in Pittsburgh.