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November 2004

Bean Thinking...

There's a whole latte trouble in store for traditional cafés

Starbucks is due to open its first watering hole in Munich, on Leopoldstrasse this month. A café on Sendlingerstrasse will follow shortly. According to the company’s CEO, Howard Schultz, Starbucks is out to blanket the earth—they already have approximately 8,500 shops worldwide—with a global brand “in the same genre as Coke and Disney.” The goal is one café for every 9,400 urban residents. Given Munich's population, that translates into 140 stores—a few more than are presently located in Manhattan. For those in Munich who dislike the chain and all it represents, there will be a rapidly increasing number of occasions for protest.

What precisely these opponents are squaring off about is pretty clear. We are to believe that they, as the underdog, have a single-minded devotion to protecting cultural diversity, commercial choice and small local businesses. Starbucks, on the other hand, is a brand-bully, a quintessentially money-grabbing, “I take what I want” company for which competition comes down to “we’re bigger than them, let’s take them out.” While Starbucks wants to be seen as a corporate good citizen who has managed to wed commercial success with good works, their opponents are pictured as naive, misguided antiglobalization sympathizers who hate successful American companies.

So there we have them—the opponents. From those who support small local coffee shops to antiglobalists, concerned citizens and the plain crazy. Tell us who you think is against Starbucks expansion and you will tell us who you are and whose side you are on. Let your cultural prejudices out of the closet. It is going to be a good rumble and, who knows, we might see blood.

As a caffeine heavyweight, Starbucks has taken a cup of coffee and turned it into a spiritual/designer product, morphing the place to drink it in into an intimate nook where “sophisticated” people can share the “Starbucks experience”—community, camaraderie, connection. Starbucks passes itself off as the most liberal company in the world, purchases fair trade coffee and its workers are well paid and insured.

The nippleless mermaid’s (take a look at the logo) implementation of a strategy of saturation makes her unbeatable. The tactic is to open stores in urban areas already dotted with cafés and espresso bars and to cluster new stores near existing ones. “We probably self-cannibalize our stores at a rate of 30 percent a year,” says Schultz, “but it is a sure way to achieve market dominance.” The crowding of so many stores so close together has become an international joke. The headline “New Starbucks opens in rest-room of existing Starbucks” elicited chuckles in a recent publication.

The clustering expansion model was pioneered in Munich by supermarket chains, which drove Tante Emma out of the city. McDonald's perfected the scorched-earth approach until there was no Imbiss within smelling distance. Gap and other retailers successfully brand-bombed the Altstadt with multiple outlets, producing a designer monoculture. Starbucks opponents are savvy to the way the company blitzes entire areas and spreads, to quote Globe and Mail columnist John Barber, “like head lice through a kindergarten.” And they have learned to counterpunch Starbucks spin by accusing the company of green-washing—covering up their greediness with an appearance of environmental and social concern. Only one percent of the coffee purchased by Starbucks is fair-trade (purchase price about $1.26 a pound). Profits, on the other hand, come from “sweatshop coffee.” Bought in at between 30 and 50 cents a pound, the same amount is sold by Starbucks at a minimum of $9.95. Staff conditions, meanwhile, are no better than at any other fast-food outlet in Germany. The workers are overworked and under appreciated.

The squaring off is between two unequals. Starbucks opponents are no match for the-best-money-can-buy lawyers, a superb public-relations operation, and a cool Website. The outcome is predictable.
A few landlords will refuse to rent them space; the rest will cave in to some rather brazen real-estate offers. A couple of motions to restrict the expansion of Starbucks will be brought before the city council—none of which will be passed. The number of San Francisco Coffee Company cafés, which emulate the Starbucks business model, will increase. Like sumo wrestlers they gravitate to the limits of their weight category.

Tourists looking for a guaranteed mediocre quick fix will storm the chain cafés, joining a multitude of thin and mean black-suited business types and designer blonds to be Californiated (cool, preppy, friendly, laid-back). Non-yuppy, fuller, gentler locals will steer clear of them. Students may stop by to say hi to their young, squeaky voiced girlfriends working behind the counter, but will be turned off by Starbucks latte-sipping sophisticates, piped-in Kenny G music and designer coffee at around € 3 a cup.

Non-chain shops that survive will be pushed to the back streets of the city, denigrated to a systemic solitude in devaluated places, where they will become objects of nativist cults—only visited and appreciated by real Turks, real students, real workers and real whatever-have-you.

The city will be the victim, robbed of spaces where there are few barriers to access and everyone feels comfortable, where people are known by face and name and where there is a mix of class, ages and ethnic groups. The protest against the chains will be left to villains and buffoons, forcing the rest of us to become corporate sipping supporters. Sigh.

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