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Executive Times |
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2008 Book Reviews |
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Starbucked:
A Double Tall Tale of Caffeine, Commerce, and Culture by Clark Taylor |
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Rating: |
*** |
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(Recommended) |
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Click
on title or picture to buy from amazon.com |
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Ubiquity No
matter how many times you’ve been to Starbucks and consumed its products,
chances are you’ll find out something new on the pages of Clark Taylor’s
book, Starbucked:
A Double Tall Tale of Caffeine, Commerce, and Culture. I was surprised to
learn how much milk and sugar the company delivers in its popular products. In
hindsight I shouldn’t have been as surprised by this quote from former CEO
Jim Donald, “Lines mean we need more stores.” (p. 261). Taylor assumes a
skeptical point of view and makes claims about the company that offer a point
of view that led me to raise my eyebrows from time to time. Whether you agree
or disagree with Taylor’s point of view, his exploration about this company
provides many ideas for reflection. Here’s an excerpt, from the end of
Chapter 5, “Storm Brewing,” pp. 166-8: Naomi Klein, creator of the
antichain "No Logo" movement, has lambasted Starbucks over its
habit of clustering stores and opening next to mom and pops, but in the
coffeehouse business, a cluster of cafes can do better as a group than each
cafe would alone. Just as a thicket of restaurants or gas stations will
amplify business for everyone by forming a nexus people instinctively
gravitate toward when they think food or
gas, a Starbucks and an independent can work in tandem to draw more coffee
drinkers. It's like a reverse Wal-Mart effect. Independents also benefit from
Starbucks's mainstream appeal. Said Milletto, "They give people a safe
place to have their first specialty-coffee experience, and once they have
that, they find it easier to venture out." Stories from around the
country bear this out. For example, the Omaha World-Herald reported that after Starbucks
blitzed Omaha with six stores in 2002, business at locally owned cafes
was up as much as 25
percent, with many
new mom and pops opening up. And Martin Diedrich, who
had watched Starbucks
open "within a stone's throw" of each of his coffee bars, likewise
reported increased sales. "I didn't suffer whatsoever," he said,
his near heart attack notwithstanding. "Ultimately I prospered, in no
small part because of it." The coffee community isn't
unanimous on the verdict that Starbucks boosts independents, however. Corby
Kummer, the Joy of Coffee author, says that mom and pops
are getting harder and harder to find when he travels around the country, a
claim not supported by industry statistics. Many can't get beyond the fact
that the company clearly in- tends to leach
sales from locally owned coffeehouses. Several coffee shops have indeed gone
under thanks to Starbucks, but most agree that these occasional casualties
were generally subpar and deserved to be pruned away. "Starbucks has
managed to establish
a minimum standard of service and quality," said Timothy
Castle, a
specialty-coffee consultant and writer. "They make it very difficult for
people to survive in this business who are not doing a good job. You have to
be better than them to survive, which is hard to do." Some even go so far as to
credit the company for making the whole business viable in the first place.
Without the work Starbucks did to popularize espresso and to educate customers
in the vagaries of coffee connoisseurship, who can say if the coffeehouse
industry would have ever grown this prosperous? "Everyone I know in the
business who's doing well — none of us would be where we are if it wasn't for
Starbucks," said Joe Monaghan, the Seattle coffee industry veteran.
"My roof and my kids' shoes and my daughter's college education — that's
all thanks to Starbucks and Howard." This is fundamentally the
company's position on the matter. "It's kind of ridiculous to say
Starbucks put people out of business," Howard Behar, the former right
hand to Schultz, told me. "If anything, we created an industry. We
legitimized something that was kind of bohemian." Schultz put this
argument much more stridently to a Seattle Weekly reporter in 1994, when the
issue of Starbucks targeting independents was first gaining momentum.
"It's ironic to me," he said. "I came back [from Italy] with
the drink caffe latte in 1982. That word was not in existence in this town
before we opened up our first coffee bar in April of 1984 in downtown
Seattle. We created this business. We created a tremendous opportunity not
only for ourselves, but for others. We're not asking anything for it. It's
great. . . . Why there's animosity toward us is a question you have to ask
others." When I asked Schultz if he still held to these words, he
reaffirmed them without hesitation. "We created an industry that did not
exist," he said. "We created a beverage experience, both in terms
of the makeup and the ingredients of a drink that only existed in Italy. We
created a language that didn't exist. We changed the culture and enhanced
people's lives through a simple cup of coffee, and we've done it around the
world. Absolutely." Whether or not you buy
Schultz's claim, the truth is this: all parties involved — Starbucks included
— are fortunate to have found themselves selling such an incredibly
lucrative product, for which the world's appetite only continues to increase.
Few trades exist in which consumers allow retailers to charge a huge price
for something that costs next to nothing to produce, and gourmet coffee is
certainly one of them. It's hard to go wrong with it. "You can't do
better than a cup of coffee for profit," said Dan Cox, a former SCAA
president. "It's insanity. A cup of coffee costs sixteen cents. Once you
add in labor and overhead, you're still charging a four hundred percent
markup — not bad! Where else can you do that?" The enormity of the coffee
market makes it impossible for even a behemoth like Starbucks to monopolize
the industry. Americans alone drink three hundred million cups of coffee
every day, which makes the seven million customers Starbucks serves daily
around the world seem almost tiny by comparison. And the size of the pie
keeps growing. Mintel, the market research firm, expects national
specialty-coffee sales to more than double between 2006
and 2011, hitting
a lofty $18.8 billion. The air is so thick with cash that things seem to work
out for everybody. Everybody, that is, but the
people who grow the coffee. The
ubiquity of Starbucks has changed many communities. Taylor’s perspective is
that many of these changes are for the worse. Read Starbucked
and decide for yourself. Have an espresso or two while you’re at it. Steve
Hopkins, January 22, 2008 |
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The recommendation rating for
this book appeared in the February 2008 issue of Executive Times URL for this review: http://www.hopkinsandcompany.com/Books/Starbucked.htm For Reprint Permission,
Contact: Hopkins & Company, LLC • E-mail: books@hopkinsandcompany.com |
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