Howard Schultz, the founder and chief executive of Starbucks, wants to start a conversation about race. But even the baristas charged with engaging customers in the company’s controversial #RaceTogether campaign near his childhood home in Canarsie, Brooklyn, aren’t sure that’s a good idea.
“You might want to talk about racial issues if you’re Caucasian, but it’s more difficult if you’re African-American,” said one customer, Felicia Green, 25, who, like Schultz, attended Canarsie high school.
At a Starbucks in Brooklyn’s Kings Plaza mall, many felt that any such discussion would have to be addressed carefully – if at all. One barista, Michael, said he was concerned that “people won’t be able to take it ... they may be offended by the truth”.
This may be all part of the Frappuccino billionaire’s plan. As the #RaceTogether campaign – under which employees will write the hashtag on coffee cups as an invitation to talk to them about race – was launched across the US on Friday, it was not clear how Schultz’s vision of talk therapy for coffee consumers would play out.
In Manhattan’s Flatiron district, Schultz’s pamphlets on the subject, stacked up on tables, were glanced over as curiosities and the chief executive’s invocations were largely ignored. “Conversation has the power to change hearts and minds,” wrote Schultz in a newspaper-sized pullout.
Since announcing the initiative, the company and its founder have faced widespread criticism that – perhaps with the best of intentions – they are trying to reduce an incendiary issue to a marketing tagline. For its part, Starbucks insists #RaceTogether is not mandatory – neither customers nor employees have to engage in it. It is merely a suggestion, an invitation. If a customer asks, “try to engage them in a discussion,” Schultz said.
The 61-year-old’s concern with a growing inequality of opportunity and what he calls the “fracturing of the American dream” echoes his own personal trajectory, which has taken him from a childhood in this poor part of Brooklyn to becoming one of America’s wealthiest men, with a fortune of around $2.6bn (£1.7bn).
And Starbucks’s brand narrative is closely tied to Schultz’s story: he won an athletics scholarship to Northern Michigan University, worked in sales at Xerox, switched to a Swiss coffee-maker manufacturer, then jumped to a fledgling Seattle company – Starbucks – with the idea of replicating the Italian coffee house. But it was not until he returned to Starbucks in 2008, after an eight-year hiatus, that his engagement with political causes became more explicit.
That engagement has led him to campaign on a range of issues. He pledged to hire 10,000 Iraq war veterans and military spouses over five years, and committed $30m to research on post-traumatic stress in veterans. In 2013, he led a petition urging Congress to end the government shutdown and wrote an open letter asking gun owners to refrain from bringing weapons into Starbucks – even if they were allowed to do so shops. When, at the firm’s annual meeting two years ago, an investor complained that Starbucks’s support for gay marriage in Washington state had harmed sales, Schultz invited him to divest his shares.
“The divide between profitability and doing the right thing is collapsing,” Schultz recently told the Seattle Times. He has said he is leading Starbucks “to try to redefine the role and responsibility of a public company”.
But Starbucks stands out because many of the causes it addresses have little to do with its business. “I don’t know where this will go,” Schultz told an employee forum on race relations in Seattle. “But I don’t feel, candidly, that just staying quiet as a company and staying quiet in this building is who we are and who I want us to be.”
Not all employees are happy to be burdened with the responsibilities of Schultz’s “conscious capitalism”. Critics of Starbucks say the positions it adopts are platitudes that demand little from the company or customers in terms of identifying the specifics of an issue or concrete ways to address it.
After #RaceTogether was unveiled, Corey duBrowa, Starbucks’ director of global communications, received so many negative messages on Twitter that he deleted his account (he restored it a day later). Others found Schultz’s call for “one voice” on the topic of race condescending. Kate Taylor, a writer for the business magazine Entrepreneur, wrote that Schultz could hardly paint himself as a “visionary progressive” for discussing race when it is “something others, especially people of colour, haven’t exactly been silent on in recent months or the last couple centuries”.
While good deeds offer some protection against fast-moving Twitter attacks and negative internet rumours, not all of Schultz’s social programming has produced favourable publicity. Last year he announced Starbucks would become the first US company to provide free college tuition for all employees, or “partners” as he prefers to call them. Critics, however, said the programmes were neither the first nor entirely free.
Nor has Schultz, as the figurehead of a company associated with the imperial reach of US corporations, always been pitch-perfect overseas. In 2009, he drew the ire of then UK business secretary Peter Mandelson for saying Britain appeared to be “spiralling”. Mandelson retorted that it was Starbucks, not the UK, that “is in a great deal of trouble”. The company offered an apology, saying: “We are all in this together.”
Then, last year, Starbucks incurred the wrath of UK taxpayers when it revealed that it had paid only £8.6m in tax since 1998. The company claimed it had not been profitable; critics say its receipts were being funnelled through the Netherlands and Switzerland.
But could Schultz and the current generation of US corporate leaders give American capitalism a new face? Walter Robb, joint chief executive of food chain Whole Foods Market, told the Seattle Times: “Government has shown its limits, and its inability to act in many cases; it’s really incumbent on business to step up to a broader view of responsibility.”
But others warn that Starbucks’s sense of righteousness could backfire. Business advisers warns that getting too involved in issues creates expectations that companies can’t manage. “You’re going to open the door to all kinds of people holding you to all kinds of different standards,” said Nancy Koehn, a Harvard Business School professor. “Small things can trigger great rage.”
In the past, Starbucks has faced criticism over issues from the distribution of tips to plans to expand in Israel. Last year, it came under fire after the New York Times ran a profile of a barista who was struggling to meet a work timetable scheduled by a computer.
But representing baristas as racial counsellors may not be as radical as it seems. Ever since he visited Italy and saw how Italians used coffee bars as “a place for conversation and a sense of community”, Schultz has pushed Starbucks to be more than a supplier of caffeine fixes. In the wake of the racial unrest in Ferguson, Missouri, he convened a discussion with employees in Seattle and in cities across the US.
“We at Starbucks should be willing to talk about these issues in America,” Schultz said. “Not to point fingers or to place blame, and not because we have answers, but because staying silent is not who we are.”
Idealism, marketing or both? Schultz has never been demure about his achievements – he’s published two books covering that ground intensively: Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time and Onward: How Starbucks Fought for Its Life Without Losing Its Soul – and voiced some almost evangelical thinking.
At the height of the company’s expansion in 2005, Schultz told CBS’s 60 Minutes: “We’re not in the business of filling bellies. We’re in the business of filling souls.”
Still, Schultz’s his call for chats about race over coffee may not reach low-income areas such as Canarsie. Despite complaints from the Canarsie Courier that Schultz has “no problem caffeinating people” in Kings Plaza, three miles away, there is still no branch of Starbucks here.
Mr G, a resident of the racially diverse Bay View housing estate that the Schultz family once called home, says that, in neighbourhoods like this, a five-dollar cappuccino with a tiramisu topping is a luxury item, not a daily necessity. “We’ve all heard about him here. We’ve heard about the plan to write it on the cup. He wants to get people together. Could be good. He should put a Starbucks here. Yes sir.”
So why hasn’t it happened? “Starbucks is too white, and they charge too much damn money.”
BIG CHANGES
Walmart Using a tactic familiar in the US labour movement - naming and shaming - campaigners pressed the supermarket chain on low pay, and in February Walmart announced that it would increase the wages of 500,000 of its staff to at least $9 (£5.80) an hour: $1.75 above the federal minimum.
KPMG The UK consultancy firm is a vocal supporter of the Living Wage Foundation and was one of the first big companies to support the campaign, back in 2005. Over 500 of its cleaners are now on the living wage, and staff turnover is down, as are recruitment and training costs.
John Lewis The John Lewis Partnership employs more than 90,000 people and owns John Lewis and Waitrose. The business is owned by its employees and each year they share a bonus determined by the performance of the retail chains.
- This article was amended on 26 March 2015 to correct the name of a university.
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