Starbucks: Selling the American Bean

How the coffee giant is turning around its image overseas

American brands face a situation very different from a decade ago -- and enormously different from 50 years ago. Once they were loved throughout the world because they were American. Now, if they're loved at all, it might be despite being American.

That's a hard message for Americans to accept. The fact is that anti-globalization protests on the one hand and US foreign policy on the other hand have led to suspicion at best and hostility at worst toward all things American. Of course, brands are deeply affected by this, given the preponderance of American brands around the world, so it's interesting to observe how strategies have emerged to counter the inbuilt national aspects of international brands. All brands are defined to a certain extent by their country of origin. You simply cannot take America out of Disney even if you can take Disney out of America. Similarly there will always be -- despite increasing internationalization of marketing, production and distribution -- something inherently German about BMW, Japanese about Sony, and Italian about Versace.

The subtleties of this can be noticed by examining the Starbucks brand. In the UK, for instance, there is fairly widespread knee-jerk hostility to Starbucks from many quarters. The criticisms of Starbucks come easily to many people's lips. "American bullies, they drive out local mom-and-pop cafés. They treat their staff badly and they grind third-world farmers into poverty." This was the party line that sprang out of Naomi Klein's No Logo. The general perception is that Starbucks had gotten too big for the world's good. In the UK, and throughout most of Europe, Starbucks has had to counter an extremely negative perception.

There are a few key issues on which Starbucks is usually attacked: clustering, driving out independents, loss of diversity, its policy toward farming communities in developing countries, fair trade. With some research, anxiety that may arise from these fears may be quietened, but it would be hard for Starbucks to get across its story, simply because, at the root of the constant mistrust, there is an anti-Americanism that proves hard to counter.

Yet Starbucks has a better, more globally acceptable story to tell than many American brands. That story is now getting through; in Europe, the Middle East, and Asia, Starbucks is succeeding and turning around a negative perception. It's worth other American brands studying this and drawing their own lessons.

Parts of the Starbucks strategy cannot be copied because they are innate to the brand and the whole operation of the company. Starbucks leader Howard Schultz and other senior executives have expressed in interviews that the company has an outlook genuinely interested in cultures beyond the US. You could sense it even in Pike Place Market in Seattle, where the first Starbucks opened in 1971. The place itself looks out to the Pacific Ocean, and the location was a market for local and international produce. Starbucks, proudly displaying its beans from exotic locations -- Sumatra, Kenya, Guatemala, Costa Rica, Ethiopia, speaks for an awareness of a wider world.

There is a romance inherent in the brand that comes from the pleasure of discovery of other cultures. Schultz talks of "romancing the bean." It's clear that the inspiration for much of the Starbucks brand came from countries outside the US. In particular, trips that Schultz made to Italy in the 1980s ensured that the American is fused with the Italian to create the essence of the brand. This fusion is apparent even in the language of cappuccinos, lattes and baristas that Starbucks first imported to the US, then exported to other parts of the world. Intriguingly, Schultz came back to Starbucks after having launched his own "Italian" coffee brand, Il Giornale.

The American-ness of the Starbucks brand is tempered by European influences. There is a chameleon aspect to the brand, allowing it to take on aspects of whatever the environment might be where it trades. As long as the core product stays true to its quality and principles, other elements of the offer can adapt to local market needs. Go to a Starbucks in China, Japan, France, Greece or Kuwait and you will drink the same espresso, but the food will have a local flavor. You will also find that certain aspects of the brand are sacrosanct -- no smoking even in smoking cultures, the adherence to the "third place" even where space is at a premium (Japan, for example). But where adaptation is needed to fit cultures, Starbucks adapts -- green tea frappuccinos in Asia, the division into men-only and family areas in the Middle East.

Having good people on the ground is vital. This does not necessarily mean parachuting in managers from the US. Local recruitment is needed, and Starbucks places great store by its partners, as it calls its employees. An important role for partners is to forge links with local communities. Put somewhat crudely, Starbucks wants to do good as well as make a profit. It encourages its partners to make a difference to local causes, whether in downtown Baltimore or Kowloon. Encouraging contact with communities feeds back into the brand, diluting the sense that corporate America is rolling its tanks into town.

This approach is then supported by a quiet but effective program to nurture the development of farming communities where the coffee is grown. The company strives for a policy of fair sourcing and a commitment to support health and education. These stories and messages are there but they are often hard to communicate. The background is that there is a crisis of trust in the good faith of corporate USA. Too many scandals, too many examples of misused power, have left a predisposition worldwide to believe the anti-American case. It can be countered, but it needs persistence -- and it needs a genuine commitment to brand values that are built on a more outward-looking approach. Starbucks is also a brand that communicates its values through individuals; the more a brand does this, the less vulnerable it becomes. The brand reasserts its human values to win hearts and minds, rather than relying on its sheer might.

Visiting Seattle makes this a little clearer and points to another aspect of the success of the Starbucks brand outside the US. Brand America has culturally resonant sub-brands, and Starbucks is a product of one of them. The Seattle sub-brand has been one of the great, but relatively unnoticed, phenomena of the last thirty years. In 1971, Jimi Hendrix, one of Seattle's most famous sons and exiles, had just died, and Seattle's biggest employer, Boeing, had cut half its staff. Since then, the region has given rise to Starbucks, Amazon and Nike. They represent a different America -- a different brand personality -- from Texas, say, or New York. This brand does not necessarily stand for a kinder, gentler America, but it is a more globally aware, customer-focused America, a less abrasive but even more optimistic one. It is optimism, above all, that the world still admires in the American brand.

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