With more than 1,000 layoffs, 600-plus store closings, competition from new concepts discounters the likes of McCafe, what is the future for the Iconic American Caffeine Giant Starbucks Coffee Co.?
After a two day, fast track immersion in Coffee College - bean brainwash, and learning all about the “Starbucks Way” - my perception of what I once may have referred to as the “over roasted , over priced, omnipotent (I mean, who else would be so bold as to have two stores, identical twins, on opposite street corners?)” have made a complete reversal.
As a self-professed Java Junkie, I felt my senses were assaulted when I walked into Starbucks. They have always seemed to have a flavor profile that wasn’t of my liking. It is hard to believe that this Goliath of business and marketing never really got its message across. And I don’t know if it’s the caffeine speaking here or the influence of the smiling Starbucks partners I’ve been hanging with this week – but I have to say that the true story, the background, the brain child of Howard Schultz and his ultimate philosophy needs to be told. So many good deeds and practices should not be a secret.
(Starbucks' Coffee College graduating class)
After hours of classroom, numerous charts, way too much coffee, lots of slides and discussions with buyers, agronomists and a chance meeting with the man, Howard Shultz, there are four parts or rules or philosophies in the Starbucks business model:
1) Buy and produce the best quality coffee possible
2) Be socially aware of all those who are affected in the process
3) Be environmentally conscious in the growth, development, production and process of the coffee business
4) Make a profit
I believe I have these in descending order of importance. Rarely, was profit a tagline or bench mark in any discussion, the coffee was always the goal.
The bean, it’s always Arabica, is Starbucks’ quality choice. Of the two commercially produced varieties, Arabica and Robusta (normally favored by Italians), the Arabica is generally considered to produce a better cup of coffee, more complex and less harsh. Still, by no means does that mean that there are no good Robusta or bad Arabica.
The best Arabica beans, a Gardenia Evergreen tree, not bearing fruit before 4-5 years of age are grown in higher altitudes, steep slopes in varying degrees of shade and sun. All the beans are hand picked and purchased from established partners, trusted farmers and CO-OPS, that are monitored and follow a strict line of growing, harvesting and processing practices. These CAFÉ practices (rules) for all Starbucks partners are insured by the SCS, an independent third party. The CAFÉ (see more at STB.com) practices also establish labor policies that the partners must
adhere to, to include no child labor. Once these “cherries” (coffee fruit) are picked they can be processed in three ways: washed, semi washed or natural.
The washed process involves forcing the “cherries” thru a mill, manual or mechanical, to remove the shin and pulp. The green beans, which are still covered in a silver skin husk, are washed, strained and then left to “ferment in concrete pools for 12- 36 hours, at which point the greens beans are spread out to dry on tables, racks, mats or any flat, sundrenched area available. During the ferment, the contact of the beans to one another creates a reaction that softens the silver skin, containing the bean and also develops the “acid”’ a good thing, in the green coffee beans. I also learned some coffee vernacular, being a chef of 25+ years; ferment and acid are rarely good, unless speaking of citrus, kimchi or wine! The ferment, along with drying times is determined by each farmer and coffee variety.
The semi- washed method is like the washed, save the fermentation step. After milling and washing, the fruit goes directly to drying. The Natural/ Sundried method is like raisin farming, the fruit is left on the tree completely ripen brown and wrinkle. The raisin like cherries are then picked and laid to dry in the sun. This method was thought to be reserved for the lesser quality coffees, but is now gaining popularity with specific regions and varieties. Some of the most expensive, single variety, robustly fruited flavor coffee, such as Ethiopian Yirgacheffe, is processed, or less processed, in this manner.
Starbucks, with its highly trained, minimalist team of tasters and blenders - determines the quality of the bean and roasts all of their coffee. All coffees, before commercially roasting and blending begins, are test-roasted and tasted at Starbucks, then test-roasted on-site at the farm/COOP and test-roasted again at delivery, to insure the quality.
Part of the philosophy is to build trust with the farmers, conduct business ethically and support the partners to extraordinary lengths. Starbucks routinely pays the highest price to farmers, ensures the stability of the land and peoples thru programs for health, education, land management, monetary loans and progressive farming techniques. Starbucks Farmers Support Centers, made up of scientists and agronomists, who work to increase product knowledge, quality and business viability of small scale coffee farmers. This support, not previously available, is a step towards ensuring the sustainability of coffee, its producers and environments. The coffee regions, generally third world or developing countries, who in the past have been taken advantage of, How can we help them grow more coffee without cutting more forest, how can we pick more coffee without abusing their labor force? These questions and many others are asked and addressed by the Starbucks Philosophies. I was amazed that the support is offered, at no charge to all farmers, not only those that are “partners”.
A specialty coffee giant, Starbucks purchases 3% of the world’s coffee under its own CAFÉ guidelines, much of which is Fair Trade. Considering that the U.S. is the number one consumer of coffee (Brazil is second), Starbucks doesn’t seem so big. Coffee is also the second largest traded commodity in the world, though quite far behind the No. 1 – which is oil. The company purchases more than 385 million pounds of green coffee beans annually (40 million pounds of which is Fair Trade) for its 16,000-plus outlets and retail CPG programs. These daunting numbers provide another perspective when you consider what has Starbucks given back, over and above, as of fiscal 2006 (according to its 2008 company fact sheet):
1) $36.1 million in cash and product donations
2) Volunteered 383,000 hours in communities
3) Quadrupled their renewable energy purchase to equal 20 % of the energy used to operate stores in the US and Canada Plus many other improvements and innovations to better manage their business footprint and impact on local communities and the world.
Back to the cup at hand – the Seattle tasters – a 15 member team, incessantly cupping, a marathon “spit fest”, taste 400 cups of coffee a day, to determine the best roasts, and blends for the Starbucks line. These coffee aficionados, taste titans, determine the flavor profiles and then rely on the Starbucks bevy of master roasters to duplicate the sample quarter-pound batch the tasters create, into a master 800 to 1,000 pound quantity. Sumatran, Ethiopian, Kenyan, Hawaiian, the list goes on.
As a person who professionally tastes things, it is an intimidating task. My palate and head were wiped after a little four variety tasting. Even the taking the simple math of five coffees, the bevy of combinations that can be blended matched with the innumerable roasting variations, the most pivotal point of the entire exercise, from plant to cup, is mind boggling. Starbucks feel that the tasters decide the coffee, but the roasters make it. The point at which the green beans turn yellow to orange to brown to black is where the ultimate flavor is found. This ideal of the best resource, the best bean, the best practice, the best coffee is all for naught, without the best roast. And yes, it is a dark roast, on purpose.
With their new Pike and 1st street store open, a LEED certified space that is the epitome of energy and water efficiency, it was created with 99% reclaimed materials and still boasting those famously comfortable chairs and atmosphere. Starbucks is getting back to its heritage and working on letting the public know its true message. They are a coffee company with a mission – and it’s not to take over the world. It is a mission of ethical sourcing, quality roasting and the high-quality standards of freshness in Starbucks' coffee beans.
The new ‘heritage’ store is one of three new ‘palettes’ Schultz’ says are in development with designers. The new Seattle model boasts new in-store machines with added efficiency while producing the “perfect” cup. Like a wine cruvinet, the new CLOVER machine, produces small batch, single region/varietal coffees in individual cups. The use of ceramic “For Here Ware” mugs for in-house consumption and chalkboard menus add a local relevance. For me, the new-old store adds to the neighborhood, coffee shop feel, a gathering spot, a comfortable place to relax.
I certainly have a new found respect for Starbucks and the man behind them - Starbucks' chairman Howard Schultz. He is the “no I in team” type, his social awareness and business ethics invigorate the company. When he came into the room for our Coffee College graduation, he said, “There are no zealots here.”
I would respectfully disagree. The Seattle eadquarters is packed with zealots. And coffee college may have produced a few more.
Schultz, who built the global empire from just a handful of branches in Washington state, has an infectious, laid back style that exudes comfort. Even when pressed by us reporter types, looking for some “dirt”, proposing tough questions, Schultz smiled, gave a slight laugh, pensively committing to answer, never seeming vague. In the end, Starbucks’ record is clear; the respect which is shown for their employees and partners, their commitment to the environment and their steadfast vision to put people before profit, which in turn will sustain the bottom line is smart and admirable.
In this day of “haves and have-nots”, thoughts of The Great Depression, Global Warming and of running ourselves to extinction, a “Big Player” is making the right move and has been, since 1971. Apparently, we just didn’t know it.
