If you’ve scrolled through Starbucks’ Facebook page or Twitter mentions recently, you’ve likely seen some angry messages amongst the photos of lattes.
“You are very wrong and stepped over my American line and beliefs,” reads just one such post of dozens on Starbucks Facebook page on Thursday. “American First and forever.”
The most recent source of Starbucks outrage is the company’s plan to hire 10,000 refugees in the next five years, in response to the executive order temporarily banning all refugees from entering the US.
But, despite the threats of boycott, Starbucks isn’t stepping back — and experts say that’s a smart decision.
“Big, bold action will pay off,” Chris Allieri, founder of the communications and marketing firm Mulberry & Astor, told Business Insider. “Starbucks venturing out on its own shows leadership.”
Allieri believes that customers will demand corporate responses to President Trump’s executive orders that impact civil liberties, such as immigration and LGBT rights. By coming out with a strong statement and clear actions, he argues Starbucks is ahead of the competition.
According to a Harvard Business School study, 38% of Americans believe CEOs have a responsibility speak out on controversial issues, as long as they directly apply to the company’s business. As a chain with locations in 75 countries, international politics could be seen as in Starbucks’ wheelhouse.
“It’s impossible not to make enemies when companies enter the political arena, but from a business point of view, Schultz is probably right to associate Starbucks with pro-immigration stances that could tend to lessen anti-American sentiment in international markets,” financial writer Vlae Kershner wrote in Seeking Alpha.
The most recent movement to “boycott Starbucks” is just the latest in a long series of backlashes against the chain’s political statements. With experience comes knowledge, making Starbucks uniquely positioned to build its brand by taking on Trump in 2017.
The rise of the politicized latte
One of the best illustrations of Starbucks’ approach to politics took place at the company shareholder’s meeting in 2013, when a stockholder argued that Starbucks had lost customers due to the company’s support for gay marriage.
“Not every decision is an economic decision,” Schultz responded. “The lens in which we are making that decision is through the lens of our people.”
Yet, in the same breath, Schultz brought up Starbucks’ financial success in the past year.
“If you feel, respectfully, that you can get a higher return than the 38% you got last year, it’s a free country,” he continued. “You can sell your shares in Starbucks and buy shares in another company. Thank you very much.”
In other words, Starbucks is insistent the company doesn’t make political statements to make money — but also wants to emphasise its business model works. This business model requires Starbucks to differentiate itself, in part through limited political activism.
If Starbucks becomes interchangeable with other coffee chains, this model fails. Tying the brand to certain values and political beliefs is one way to differentiate the chain, establishing a high-brow image that convinces customers to pay more for beverages than they would at an everyman favourite like Dunkin’ Doughnuts.
Starbucks has taken a stance on issues from national debt to race in America. In September, Schultz endorsed Democratic nominee Hillary Clinton for president.
Customers have threatened to boycott the chain on big topics, like its response to Trump’s refugee policy, and small details, such as rolling out a green cup the week before the US election, which some called progressive “political brainwashing.” The chain even clashed with Trump while he was campaigning for president, on the seemingly apolitical topic of the chain’s minimalist red cups.
“No more ‘Merry Christmas’ at Starbucks,” Trump said at a rally in Springfield, Illinois in November 2015. “Maybe we should boycott Starbucks. I don’t know. Seriously. I don’t care.”
Why Starbucks can take on Trump
Over the years, Starbucks has learned a number of lessons on how to mix business and politics, building its a brand without hurting sales.
The first lesson is the necessity of backing words with actions when making political statements — something the company learned the hard way. In 2015, Starbucks was forced to backtrack on a campaign to raise consciousness of racial issues in America, in which employees wrote “Race Together” on cups.
After being mocked by people from all ends of the political spectrum, the company ended the cup-centric part of the campaign and doubled down on opening stores in low-income minority communities. Learning the importance of prioritising actions over showy statements in 2015 will likely help the chain today.
“This is about words, deeds, and actions, not tweets,” Allieri said on companies’ reactions to Trump’s policies. “If this is seen as liberal CEOs on the coasts tweeting about Mr. Trump, that’s not the way to go.”
Second, Starbucks realised the risks associated with taking on specific politicians instead of taking on policies.
“I’m going to quote Michelle Obama: ‘When they go low, we go high,'” Allieri said. “Don’t engage in a public spat.”
Only 20% of Americans believe it is a good idea for CEOs to take stances on issues not directly linked to a company’s fundamental business — meaning broad political stances can backfire for a company.
Schultz veered from this principle in his decision to back Hillary Clinton, a move that ultimately resulted in the CEO having to publicly say
Starbucks was not at odds with Trump or his supporters after the election.
Now, Starbucks has begun targeting policies — not Trump. Schultz can make a bold statement, such as “the promise of the American Dream [is] being called into question,” because he has specific examples of policies Starbucks opposes that back up this statement.
Attacking Trump would hurt Starbucks’ brand; attacking Trump’s policies and providing examples of how Starbucks is addressing these issues demonstrates more level-headed engagement.
Finally, Starbucks has built a brand in which speaking out is expected by customers and employees. The company’s established political stances mean that customers aren’t going to be shocked by Starbucks getting political, after years of boycott threats from conservatives.
“What Mr. Schultz thinks really matters, and he wears his ethos on his sleeves,” said Allieri, who believes Starbucks didn’t lose any sales after coming out in opposition for the immigration ban.
Ultimately, a large portion of the Starbucks’ customers don’t care about the company’s politics.
However, the coffee chain has created a certain image for itself as a brand that emphasises progressive politics, elevating the chain over more inexpensive counterparts. While a certain segment of the population will always threaten to boycott when Starbucks expresses these beliefs, the company has data to prove that the loss of these customers will be balanced out by others, including progressives who promise to spend more at the chain.
With Trump as president, Allieri believes executives across the industry are going to be forced to be increasingly transparent about their values — a habit Starbucks has established over the last decade.
“Companies have to be known for something, and it’s not just your products and services,” Allieri said. “It’s who are you? What do you stand for?”
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