Everything but the Coffee (8 page)

Another early indicator, along with the new logo, of the changes afoot at Starbucks came in the boardroom. Harvard Business School professor Nancy Koehn praised Starbucks for buying managerial talent and buying it early. But Schultz looked for this new know-how in places where Jerry Baldwin had never ventured: the world of the supermarket, prepackaged, and standardized. Between 1988 and 2000, Starbucks recruited executives away from Pepsi, Pathmark, Wendy’s, and Taco Bell. These weren’t coffee people. They were retail operations people.
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They strove to impress Wall Street and sell as many cups of coffee to as many people as they could for the highest price possible, and then make those customers come back and do it all over again the next day. For them, efficiency trumped authenticity, but the company never stopped trying to perform its realness; it knew this image was central to its appeal and to its emotional value.

As the changes came, though, the company’s coffeeness began to fade somewhat. According to some experts, the quality of Starbucks coffee declined in the late 1990s. Martin Kupferman, who along with business partner Mark Zuckerman owned the thirty-five-store Pasqua chain in San Francisco until Starbucks bought him out, told me that his rival
acted like a “bottom-feeder” in the specialty coffee market, scooping up the cheapest and sometimes worst of the best beans. This was mostly a matter of scale.
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In 1992, when Starbucks went public, it operated 165 stores. Eight years later, the company ran 3,000 coffeehouses and was opening a new outlet just about every day. Buying high-quality beans for this many stores would be hard no matter what, although some have suggested Starbucks skimped on quality knowing that its trademark dark, smoky roast covered up imperfections. At this point, however, there wasn’t much competition in the coffee market, and customers didn’t notice. Early adopters and their legions of new followers just kept lining up for the coffee, meaning that Starbucks needed more beans from more sources, which made it still harder to get the highest-quality raw materials.

To meet its growing demand, Starbucks had to start roasting its beans in industrial-sized batches at centralized facilities—factories, really. But that also presented problems about how to get the beans to the store and what to do with them once they got there. Coffee people worry incessantly about coffee’s delicacy. Within a week after roasting, they will tell you, beans lose much of their brightness and aroma. After a month or two, they age and begin to oxidize. Researchers at Starbucks, however, developed their own air-tight valve packs that they claimed protected coffee and kept it from degrading for as long as a year. A source from Melitta said this might hold true for six months, maybe even nine, but not for a year. By then, oxygen would sneak in and compromise the beans. These days, you can’t even find a sell-by date on a bag of Starbucks coffee. Pushing further away from coffeeness, the company started to pregrind its beans. Again, coffee people will tell you that coffee should be ground right before it is brewed. But that takes time, slows down the line, and doesn’t deliver the results that the operations guys and Wall Street types wanted, so, around 2000, Starbucks started sending large pressurized packets of preground beans out to its stores.
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At first few people noticed or cared about the changes. Good coffee was still relatively hard to find in the United States and even harder, it
seemed, to know about. When Starbucks’ high-achieving customers did complain, they tended to grumble about the wait at stores, not the coffee. With lines out the door, human relations problems started to mount. How was Starbucks going to find enough people who cared about coffee to work in all of its stores?

Starbucks cut another corner and edged closer to faux authenticity just after the start of the twenty-first century. That’s when the company replaced its Marzocco machines with Verismo machines. This wasn’t about technological preference. Making a latte on the new devices took thirty-six seconds—a full twenty-four seconds less than before.
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That’s because it entailed little more than pressing a button. Before this time, the company featured baristas, like skilled artisans, working on machines as focal points in its performances of authenticity. As Wright Massey explained to me, “The espresso machine is the center of the brand experience. One sees the coffee being made, one can smell it, and one can hear it.” After the Verismos took over, however, the performance changed. Massey’s design successors raised the counters to hide the automatic machines and make it harder for customers to see that fixing their drinks wasn’t all that different from pressing vending machine buttons. Helping with the distraction, Starbucks puts CDs, mints, gift cards, and stuffed animals around the counters.

Once Starbucks shifted to the Verismo machines, it also changed the focus of its training. Before this point, company officials had taught employees about coffee. Afterward, the training became less coffee centered. “I felt like the training was a joke,” one employee complained. Another laughed that her instructor talked about the company’s commitment to serving the finest “expresso.”
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When someone gets hired these days, they spend more time watching videos about Howard Schultz and the company’s corporate social responsibility programs than they do learning about the intense, earthy taste of Sumatra beans or how to steam the milk just the right way for a cappuccino. “Training,” a onetime employee commented, turned into “brainwashing.”
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That’s maybe too strong a view. But being indoctrinated into Starbucks now
that the machines make the drinks means less about learning about coffee than it does about hearing about Starbucks and the company’s sense of itself as a corporate do-gooder.
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Longtime workers felt the changes. Barb Johnson started with Starbucks in 1998 and went on to help open new stores and train baristas at several South Jersey and Philadelphia locations. “I used to care about making the drinks,” she shrugged as we sat together at an independent coffee shop, “but there is no technique involved anymore . . .. We just put the beans in the hamper,” she added, looking down, either sad or ashamed, I couldn’t figure out which.

Large-scale roasting, the arrival of the automated espresso machines, and changes in the training program marked the industrial makeover of Starbucks. Company representatives still talked after 2000 or so about the firm’s “handcrafted beverages,” but in truth, customers got, for the most part, mechanically produced goods put together by workers paid to smile and chat while plugging away at soulless McJobs, as the journalist Taylor Clark described work at Starbucks. Really, each and every Starbucks these days operates like a mini–assembly line. Not even the natural colors or richly textured chairs can totally cover up the factory feel. It’s hard to be authentic when you make products with the steely efficiency of a McDonald’s franchise or a Toyota plant.
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MILK AND SUGAR

Nick Cho served me what he calls a “classic cap . . . in house only, six ounces. No substitutes.” When I got my drink at his now-shuttered Murky Coffee on Capitol Hill in Washington, DC, I reached for a sugar pack.
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As I did, Nick put out his hand. “Just try it without the sugar,” he suggested. I don’t know if I blushed, but I did feel like a barbarian, a visitor from Starbucks’ faux coffee world. Dutifully, I put the sugar away. I don’t know if Nick was right. I kind of missed the sugar. But I also knew that I couldn’t get what Nick Cho served at Starbucks, even with the sweetener, and that this was by design.

“Basically,” a British journalist concluded in 2003, Starbucks sold “coffee for people who didn’t really like coffee.” He based this assessment on a conversation with a company marketing director, who told him, “We’ve learnt that there is a real deal demand for something that’s not so intense.”
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To win over people with milder palates, Starbucks didn’t change its dark-roast formula or stop serving espresso—these were key parts of its claims to authentic coffeeness. It just doused the drinks with milk and sugar.

By the time Starbucks really took off, moving beyond the high-end early adopters, it served more lattes than any other drink. Perhaps this is because
latte
is easier to pronounce than
cappuccino
. Or maybe it is because
latte
means “milk” in Italian, and that is what you get at Starbucks. A tall (meaning small) Starbucks latte contains ten ounces of steamed milk—almost twice what you get in Nick Cho’s classic cap—a quarter-inch of form, and two ounces of espresso. “I don’t even like coffee,” one woman confessed, but not before she admitted to me, “I am addicted to Starbucks drinks.” Her drug of choice: a Vanilla Latte, a combination of milk, a dash of coffee, and a squirt of sugary syrup for three dollars and fifty cents.

A few years ago, my friend Jim Giesen taught an early-morning week-end class at a downtown Indianapolis university. At the start of the semester, he asked his students to fill out introductory note cards with information on them about their hometowns, majors, and iPod favorites. “If you ever see me without coffee, I will be asleep,” one woman wrote. Sure enough, she showed up for every class with a venti-sized Starbucks drink. One Saturday, Jim asked her what was in the cup, and she told him, in his words, a “frappo something.”

“Why don’t you just drink coffee?” he wondered.

“I don’t like coffee,” she told him.

What Jim’s student liked about Starbucks was just what that U.K. reporter sensed in 2003. The company grew by getting non–coffee drinkers into its stores and by selling them strong coffee covered up by milk and sugar. This worked for a while because the logo, even the cov
ered-up version, still stood for authenticity and the status that went with it.

Frappuccinos marked Starbucks’ breakthrough into the markets, but also its sharpest move away from its past. Committed to coffee authenticity, the first Starbucks stores didn’t sell blended drinks; they didn’t even have skim milk—not authentic enough, said Howard Schultz.
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The company started carrying Frappuccinos by accident. “We didn’t hire a blue-chip Establishment consultant,” boasted Schultz, replaying a version of the song he likes to sing about the firm, advertising, and its anticorporate nature.
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He wasn’t being entirely disingenuous, however. When Starbucks remained in the hundred-store range, it operated in a rather decentralized manner. Executives gave employees room to maneuver and innovate. In the early 1990s, a Los Angeles worker noticed people passing the shop during a heat wave and heading to another coffee-house down the street. She went to investigate. The rival drew the crowds by serving blended coffee drinks—that is, coffee, milk, fruity syrup, and ice thrown into a blender and mixed together. She notified company officials in Seattle.
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At first, Schultz says, he resisted the idea. Blended drinks, just like skim milk, didn’t come from Europe; they weren’t real. But his resistance didn’t last long in the face of demand. He put his lab people to work, and they came up with a marketable, makeable, and tasty blended coffee drink. Then, in a very corporate, not-so-authentic move, he rushed out and trademarked the name “Frappuccino.”

From the start, Frappuccinos were a big hit, paving the way for Starbucks’ burst deep into the mainstream and its record run of rising revenues, soaring stock prices, and new store openings. Typically coffee drinkers drank coffee in the morning and maybe again in the afternoon— both busy times for Starbucks. That pattern meant, though, a coffee shop struggled for business, if it stayed open at all, the rest of the day. But because Frappuccinos are essentially adult milkshakes and liquid desserts, customers buy them at different times (and for different reasons). Late afternoons, evenings, and weekends are Frappuccino times just like they
are ice cream times. The drink, then, extended the Starbucks coffee day, allowing the company to make money on its pricey real estate for longer stretches of time.

Coffee consumption, moreover, typically rises and falls with the seasons. For many caffeine-dependent women and men, coffee remains an essential daily drink. But sometimes it just doesn’t work. Hot coffee doesn’t sound so good at 1 P.M. in July in Houston or Las Vegas (or in New York or Chicago, for that matter, with global warming under way), so those in need of caffeine then might turn to Coke or Mountain Dew or Red Bull. By pushing Frappuccinos along with iced coffees, Starbucks offered caffeinated midday options and alternatives to sodas for all seasons and all climates.

Most important, in terms of growing the company’s customer base, Frappuccinos opened Starbucks to non–coffee drinkers and occasional coffee drinkers. Lots of these people, like my friend Jim’s student, don’t really like the taste of the company’s dark-roasted, slightly smoky-tasting coffees. (Some call the company, often derisively, Charbucks.) “I couldn’t even taste the coffee,” a Viennese coffee expert complained after sipping a Frappuccino.
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For him, this was an indictment. But to Starbucks, even though no one at the company would ever admit it, this remains the drink’s key feature. With their icy textures and heavy infusions of fat and sugar, Frappuccinos go down easily. They gave non–coffee drinkers a chance to join the Starbucks thing. This approach worked particularly well with teens, who are often fervent brand loyalists and strong adherents to the ethos that buying equals identity.
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In those “happy days” at the diner, when Flo in a white apron served generic coffee in a glass pot with endless refills, teens didn’t drink the stuff. I certainly didn’t. I graduated from a South Jersey high school in 1979. Between my freshman and senior years, I spent a lot of time with my friends at the Presidential Diner on the circle down the street. But no one I knew back then drank coffee, at least not out of the house. One afternoon when I went back to the Starbucks in my somewhat down-on-its-luck hometown (evidence of Starbucks’ deep move into the mainstream)
, teens filled the store. That’s true just about everywhere. The graduation speaker from the first season of MTV’s quasi-reality show
Laguna Beach
cracked that her classmates from this wealthy wonderland would have made the first bell more often if the school had provided valet parking and a Starbucks. Milk-and-sugar drinks operated as gateways to the Starbucks experience, allowing the company to expand its customer base into new demographic groups, like non-coffee-drinking teens.