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A libertarian goes to Starbucks

Dave and I come from often opposed ends of the political spectrum. He runs a "red meat" progressive weblog, while I'm loosely affiliated with the libertarian public policy scene in Washington, DC. But we're united by our desire to cross ideological boundaries and by our love for great coffee. So when Dave invited me to write a guest post on "a libertarian perspective on coffee," I was intrigued.

By way of an introduction, I should note that I'm not a full-time policy analyst. I left the 9-5 think tank world a couple years ago to work behind the bars at two of Washington's top coffee shops, places committed to elevating coffee and espresso preparation to a culinary art. In this world, Starbucks is an apparent nemesis, replacing skillful baristas with automatic machines, driving indie coffee houses out of business, and submerging its burnt espresso in heaps of milk and syrup.

Yet as a libertarian, I'm tend to have a more optimistic view of culture, seeing a corporation like Starbucks as, if not a hero, at least as a neutral or relatively harmless force amid robust and dynamic consumer preferences. I shouldn't denigrate the company just because it's big and successful. After all, it succeeds by offering people a product they want and willingly purchase.

So what's a guy like me to do? If I find that my generally favorable view of consumer culture falls apart in the area I happen to care most about, that's a real test of my views. So after talking with Dave, we decided a post about Starbucks' ambiguous role in promoting cafe culture would be a good place to start thinking about libertarianism and coffee.

Let's begin with the easy issue: Starbucks is driving independent coffee shops out of business. Anecdotally, this may seem obviously true. Many people can name a favorite coffee shop that went out of business soon after a Starbucks moved into the neighborhood. The fact is, though, that Starbucks is creating a market, not destroying it. Growth in both independent and corporate coffee shops has been huge over the past fifteen years, thanks in large part to consumers being introduced to specialty coffee drinks in the safe confines of their local Starbucks.

The Specialty Coffee Association of America, a leading trade group, tracks American retail sales. In 1989, the SCAA estimates there were 585 coffee houses operating in the U.S. By 1995 that number had risen to 5,000. By 2003, there were 17,400 shops in operation.

Starbucks growth is notable, but it's far from the sole factor driving these new shop openings. The SCAA reports that 57% of the shops open in 2003 were independent, having only one to three locations. Microchains (4-9 units) made up another 3% of the market. All the large chains combined make up the remaining 40%. [Source .pdf]

A 2004 article in the Willamette Weekly finds a similar pattern at work in Portland. In 2003, a misguided miscreant attempted to blow up a new Starbucks in a neighborhood where residents claimed to not want the imperial corporate giant. But a survey of the local yellow pages reveals that indie shops were doing just fine in Portland:

According to the Portland Yellow Pages, before Starbucks came to Portland in 1989, there were 28 coffee shops in the city. Today, there are 91 non-Starbucks coffeehouses in Portland proper, compared with the chain's 48 stores within city limits.

Bellisimo Coffee Infogroup, a consulting company for coffee shops, notes that Starbucks plays an important role in giving people their first gourmet coffee experience, after which they can and often do branch out to try out other sources. Tully's, a smaller chain, agrees, intentionally locating new stores in the vicinity of existing Starbucks locations. In the same Willamette article, one coffee expert gets perhaps a bit too effusive, but his point is well made:

"Every morning, I bow down to the great green god for making all of this possible," says Ward Barbee, publisher of the Portland-based coffee trade magazine Fresh Cup.

So on the charge that Starbucks kills small business, the Mermaid is mostly off the hook. But what about the coffee itself? I'll probably offend a few Starbucks fans by saying this, but there's a lot to dislike about the way they prepare it.

Despite promising beginnings, in recent years the coffee lovers at Starbucks have lost out to the MBAs in the company's rapid expansion. Instead of skillfully tamping espresso by hand, today's Starbucks baristas employ push button machines that take much of the art out of the job. Add to that the bulk milk frothing, the frappuccinos, and the increasingly sweetened varieties of latte, and the company has become less and less like a gourmet coffee operation and more like a fast food restaurant. Don't even get me started on the crime against naming conventions that is the "caramel macchiato."

Given this list of sins, it would be easy for me to slip into coffee snob mode and lambast the company for degrading consumer preferences, but to do so would be to misunderstand the formative role it has played in American cafe culture. On net, Starbucks has done more than any other company to introduce people to quality coffee and espresso drinks. I was one of those initial converts. Growing up in the Houston suburb of Spring, TX in the 1990s, it was where I had my first taste of espresso drinks and, just as importantly, discovered the pleasure of relaxing in a coffee shop. At the time I enjoyed big lattes and mochas, sipping them awkwardly through a straw as I sat in a big, comfy, purple chair. (I eventually learned to ditch the straw, but I still love those chairs.)

The history of coffee retail is more complicated than simply good coffee vs. bad coffee. People involved in the specialty coffee industry describe Americans' love of coffee transitioning through three waves, a concept promoted by Trish Skeie of Taylor Maid Farms. In the first wave, coffee was served as a mostly undifferentiated commodity, marketed more for its stimulative qualities or as a breakfast accompaniment than for its flavor. Pre-ground or even instant coffees were the order of the day. A great example of this mindset is this 1984 "coffee achiever" ad, showing how celebrities like David Bowie, Kurt Vonnegut, and Kenny Anderson attain success running on caffeine fuel. Notice the slight wince as Cicely Tyson takes a sip during rehearsal. It's so bad, she has to slap her director in the face. Now that's motivation!

In the second wave Americans begun hanging out in coffee shops and drinking espresso based coffee drinks. While its roots stretch back to the espresso revolution of the 1950s, it didn't reach its peak until Starbucks emerged out of Seattle and swept the country. The company rapidly expanded this market, introducing consumers to new ways of enjoying their coffee, raising their standards, and giving specialty coffee a trendy, gourmet cachet.

In the third wave, the goal is to complete the evolution of coffee from commodity to connoisseur beverage. In essence, specialty coffee needs to become more like wine. You wouldn't buy a bottle of wine labeled solely by country of origin and with no vintage date, yet people buy coffee like this all the time. Changing this means using detailed labeling, not just by country but by the specific grower or even the individual lot of beans. It means putting the roast date on every bag, ensuring freshness. And it means investing in the equipment and the training necessary to make sure that the best qualities of each coffee are brought out when it is finally served to the customer, or else the rest is all for naught.

Starbucks is clearly not a part of this third wave, but so what? For there is no third wave without a second to precede it. Even now, while Starbucks can't deliver the quality I'd like on the scale on which it operates, I'm glad to see one of its kiosks when I walk into an airport lobby for an early morning flight. I can get better coffee in the airport now than I could a decade ago. The same could be said for almost any other spot in America, thanks either directly to Starbucks or to the smaller shops filling in the market it helped create.

Coming back to the original question, my take on Starbucks has to be more nuanced than loving or hating it. Starting out by raising the bar of high end coffee, it created niche markets for even better specialty coffee retailers even as its own quality leveled off. Similarly, though it has been a homogenizing force as it has spread into every retail corner imaginable, it has left consumers with a far more diverse selection of coffee drinks and coffee houses than they had access to ten years ago.

I realize consumer culture doesn't always have such happy resolutions, but in the coffee case things seems to be working out quite nicely. The artisanal cappuccino sippers and the venti caramel macchiato gulpers can co-exist, each of them finding more possibilities for enjoyment than they've ever seen before. Drink up and be happy.

-- Jacob Grier authors the weblog Eternal Recurrence and drinks way too much espresso.

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Comments

Hmmm. One should always listen to marketers with a bit of skepticism; they're in the business of creating pleasing myths for today's consumer, not honoring the drastically reduced purchasing power of the long dead.

That "history of coffee" is mighty abrupt, indeed; few people knew anything about coffee until Starbucks turned up on the scene. Today's consumer, guided by the wisdom of the corporate coffee megachurch, has rescued us from the bitter Dark Ages of the undifferentiated loading of caffeinated ballast.

It's flummery. The popularity of French roasts and coffee-chicory blends are aesthetic choices at least on par with adding frothéd milk; the big copper cappuccino machine was an Italian restaurant cliché fifty years ago, though maybe more so on the East Coast than elsewhere. Mr. Coffee-style drip brewing exploded in the 70s, the same period that saw the abysmal, but still aesthetic, General Foods International Coffee dreck skyrocket. Any moderate-sized city at that time had a gourmet grocery or retailer which stocked a couple dozen whole bean coffees, and Kona was popular enough to be mass-marketed tinned and pre-ground. And that's the same period in which the Japanese cornered the market in Jamaican Blue Mountain for a decade.

For that matter you can check out how particular Philip Marlowe was about his coffee brewing in the 30s.

Leaving aside the myth of Starbucks-created connoisseurship, what do they offer? The convenience of one on every street corner. A place to stand in line. What does it offer the individual with a real interest in coffee? If he's a certain age it might have introduced him to something other than Folger's instant. But that's just a matter of where you happen to stand; we managed to find out about cappuccino thirty-five years ago without their help. Starbucks is a marketing success. That brings good and bad, and an inevitable decline in quality. Old story, new sign. You'd still be drinking high-quality coffee if you wished to whether they existed or not. Thank the Arabs, not an MBA.

Thanks for the feedback. When I wrote this post I was actually more concerned about offending Starbucks drinkers rather than people who already disliked the place. Perhaps I misjudged.

Any history of coffee short enough to fit into a blog post is bound to generalize, but the "three waves" story is broadly accurate. As I mentioned, espresso was gaining popularity by the 1950s, and as you said, popular drip makers certainly predate Starbucks. But neither of these had attained anything like their current popularity at that time. Hence the "Coffee Achievers" commercial still seemed like a good mass marketing idea in 1984 but would be hopelessly out of touch today.

Having logged many hours behind the bar at indie coffee houses, I get to hear how customers order their drinks. They expect the sizes to be "tall, grande, and venti." They think a macchiato is a big drink. They ask if we sell frappuccinos. When they want skim milk, they ask for it "skinny." The "latte," a Seattle term, is much more popular than the Italian "cappuccino." When you get these kinds of orders all day, you know where your customer base is coming from. They didn't pick up that lingo at the Italian restaurant that's had an espresso machine for fifty years. They got it at Starbucks. (This may be less true in West Coast cities.)

You write as though introducing people to quality coffee is a small thing, but getting consumers to stop into a store and lay down $3-4 for their daily drink is a big change in consumer habits. Though I hope their coffee exporation doesn't stop at Starbucks, I'm glad the company at least got them through the door.

You write:

Instead of skillfully tamping espresso by hand, today's Starbucks baristas employ push button machines that take much of the art out of the job.

This is actually one of the best things about Starbucks.

Because Starbucks hires so many people -- people who want a job, not necessarily to be a part of the world of coffee (not trying to be harsh, just the truth) -- the quality of their coffee varies WILDLY from store to store. I know everything's supposed to be measured just right and therefore should be the same... but it isn't. These automatic espresso machines mean the espresso is the same each and every time, and therefore I feel much more confident getting an Americano at a Starbucks than a drip coffee. It's not the best Americano in the world, but I know what I'm getting.

I much prefer the local coffee roaster right down the road in general. But on the road, Robo-Espresso is attractive.

Jacob - I don't know whether or not Starbuck's originated the term latte, but it's not the same thing as a cappuccino, which has a much higher espresso to milk ratio. more foam and should by default be marked with a light sprinkle of cinnamon (at least in Brooklyn it was).

The Starbuck's thing that annoys me is that when I order an au lait, half the time they don't understand what I want. They have some other name for it which I can never remember. All the indies (and Seattle is thick with indie shops) understand me when I order an au lait.

I do agree that Starbucks essentially created a mass market for expensive coffee, and for a third-place between office and home. Sure, indies can do both better, but Starbuck's always has a minimum bar. Seldom terrible, never outstanding.

Even though I'm not a Starbucks fan, I've been to a Starbucks in just about every country I've visited since 2000 - usually in search of a smoke-free environment or a free internet connection (which they had in Berlin!).

Right, the cappuccino is usually defined as being more foamy, and perhaps smaller than a latte. I meant only that the Seattle style drink is more popular with Americans than the Italian one(among my customers on the East Coast anyway).

I sympathize with you on the au lait. Seems like something they should have that down by now. Thanks for the input.

Jacob, I came over from Dave's "red meat progressive" blog, so we share the same political divide. But I have to agree with your basic argument. It's long seemed to me that other coffee shops were doing fine also. Down here around the SF Bay, there's lots of Starbucks, but we also have Peets and a few Tully's (which I refer to as Duffy's for no particular reason). There's also plenty of other favorite cafes where I can hang with a book and a dry double cap. When I moved to SF a couple decades ago, coffee was a revelation. But now, wherever I go, good coffee is available. Starbucks gets the credit.

Oh, and when I order coffee at Starbucks, I generally order a "big ass coffee", not a vente drip.

While Frappuccinos may be a coffee abomination, they're pretty tasty in the middle of a busy summer afternoon when you need a pick me up while running errands.

So, I don't have a lot of patience with the simple "Buck-bashers". If we could only energize them to take on Seattle's Best instead. That's surely the most deceptive advertising I've ever heard. If someone could get Alaska Airlines to stop serving Seattle's Worst and calling it coffee, I'd praise them mightily.

The Starbucks term for a cafe au lait is a "cafe misto" (me-stow). Despite knowing that, I always ask for a cafe au lait. If they don't know what that is, then I use the misto term.

Having said that, I like Starbucks. Not great coffee, but nice, clean stores with good, smiling service and they are absolutely everywhere (esp. here in NY).

Girish

Jacob wrote the following is a reponse to a comment:

"...they want skim milk, they ask for it "skinny." ...When you get these kinds of orders all day, you know where your customer base is coming from."

Well they could be coming from Australia. We've been calling a skim or low fat cappucino a skinnicino since long before Starbucks. If you get any of these you'll defintely know they are from Aus:

short black (espresso)
long black (americano)
flat white (latte)
why bother (low fat and decaf anything)

I agree that Starbucks is not the pinnacle of coffee. But it is so much better than what was generally availalble 15 years ago in the USA. And the battle is not yet won - there are still millions of Americans who think that the pale and insipid brown liquid served in many restaurants is coffee.

Anyway, the best coffee house in Steamboat Springs, Colorado is my house and I am my own favorite barista1 Check out my short black /espresso at http://steamboatdreaming.blogspot.com/2006/02/crema-de-la-crema.html

I live in Mexico and regulary drink coffee at one of the newly-opened Starbucks on a regulary basis (even though a venti Frappuccino costs more than the daily minimum wage). Starbucks has become widly successful here - 10 stores opened in Guadalajara in less than a year and the chain now has almost 50 outlets in Mexico City - by doing several things competitors don't or won't.

1. Starbucks is the only chain that opens in the morning (Dunkin Donuts is open too, but coffee in their Mexican stores is horrible). I'd rather grab a cup of coffee at Starbucks on my way to work than Oxxo (which sells powered Nescafe offerings) or 7-11.

2. It's consistent. While not necessarily the best, it is quite good. New independent stores still open (and others somehow stay open), but they often serve a dreadful product.

3. Lots of furniture. Starbucks knows the "para llevar" (take out) business isn't that big. So it puts more couches and chairs in a typical outlet than you'd find in a furniture store. It appeals to the fresa crowd - snob kids with their parents money to blow. Starbucks exploits this niche brilliantly.

Contrary to what a friend back north of the border said about it killing local businesses, Starbuck is bringing a higher level of service to Mexico. The quality competitors are surviving just fine. The marginal operators, who can't pull a shot of espresso, are going out of business.

You would hope a self proclaimed coffe lover and barista would at least know the difference between a cappuccino and a caffe latte. Both are authentic Italian drinks. A caffe latte, as its name implies, has a lot more steamed milk than a cappuccino. In Italy caffe latte are usually drunk at breakfast. It is also often given to children. The American predilection for addening syrup to a kid's drink and shortening the name to just "latte" helps reinforce in the Italian mind the idea that all Americans are overgrown babies.

My mistake. The full name is indeed Italian, it was the popularization of it as a truly large milk drink that came out of the West.

Thank you, thank you for such an interesting article about one of my favourite drinks.
I recently moved to live in Cork in Ireland, after 30 years in UK. Coffee is not well established here but it is fast growing. There might be a Starbucks in Cork but I have not found it yet.
In the 1950s, in Limerick, my parents used to buy raw green beans from Bewley's in Dublin. They'd come by post and be roasted every night in the AGA. So I grew up with the smell of roasting beans wafting up through the house.
Your article has made me realise that the world of coffee drinking is a serious business, with many niche markets. I hope you and all the others who have commented, write more and more on the topic.
Drink well, and if you ever come to Cork...

I buy all of my coffe from The Coffee Fool - on-line. It is the best I've ever had. Starbucks and our local chain sell bitter dish-water compared to what I get there.

No, I'm not a spammer, just a huge coffee fan - maybe even a connessuire.

Thanks for the great article, Jacob.
I'm also not really keen on Starbucks bashing; it's a fool's sport. They were the ones that set the bar and the table for the rest of us.

Glad to see that the wave theory has legs with the average joe-lover. We continue to fight the quality and sustainability fight. Best thing for the consumer to do is to demand quality at your local indie shop.

By the way, I now work for Zoka Coffee in Seattle.

OTish

Starbucks performs another purpose, along with making big bucks on coffee...

In every city I've been in Starbucks has for sale the NYT and the local "progressive" newspaper. Is this because this is what their patrons want, or is it some corporate "progressive" indoctrination?

NOTE: I found this post via Dan Drezner, and also posted this comment there. I know that's probably bad form, but I'd really like an informed answer to this question. Read on ...

-------------

In Anchorage, there is literally a "coffee hut" every couple of blocks. Usually, a small-time entreprenuer will identify a business at a good location, and approach the owner with a deal: You let me set up a hut in your parking lot, and I'll pay rent (or a percentage). It's really a no-lose deal: The two business owners profit, and the public gets very convenient coffee (plus tea, muffins, the usual). Most coffee hut owners operate only 1-3 huts, suggesting that there is plenty of business to go around.

So there are hundreds of these little places all over Anchorage. I'd heard non-Alaskan visitors say that this was unusual, but I didn't give it too much thought. Then my wife and I visited Dubuque, Iowa, and then Chicago. We were immediately struck by two things:

1. In Iowa, very few coffee establishments of any kind;

2. In Chicago, Starbucks are everywhere, but nary a single Anchorage-style coffee hut to be seen.

My wife asked why that is. As to Iowa, I have no idea -- maybe corn and coffee just don't mix? WRT Chicago, my guess was that Starbucks used its influence to set up a regime of health code inspections, etc., that created a barrier to entry, making Anchorage-style mom-and-pop operations untenable.

Is that the case? Can any midwesterners comment on the difference in coffee offerings between the three regions?

- Alaska Jack

Interesting observation. I haven't heard anything about Starbucks creating barriers to entry via regulation. I did talk to one potential entrepreneur where I live in Arlington, VA, who has been considering opening a coffee hut. He found that local regulations against drive-thrus would make this difficult. Similar regulations may exist elsewhere.

I'd guess the difference has more to do with a greater demand for coffee in the NW, but I'd be interested to hear more if people know of other regulatory barriers that could be at work.

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I was buying my pound of coffee at my neighborhood Starbucks and noticed a recall about my Starbucks Barista Aroma Coffee maker.....I called the number and got a very rude person I asked for supervisor and he couldn't understand why I was upset at being treated less then human...I told him I'd be happy to talk to him as I was talked to by her..... when I did....he hung up on me.
So much for Starbucks great service.
If you call about the faulty coffee maker I hope you don't get either Joy or Hector.
Still don't know what the recall is about.

Alec Baldwin asks for his voice to be removed from an "unfair" documentary about Arnold Schwarzenegger...

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