About once a month or so, I get random emails from Quora where someone has asked me to respond to Starbucks-related questions. This one struck my eye:
How do employees feel about their customers willing to pay a substantial premium for their coffee? Now, obviously I am not a Starbucks employee, but the question struck me as an interesting one. I just now answered it. (I quickly wrote out a reply, so please forgive that there are some typos and grammar mistakes in the Quora answer. This version is the same in substance, with minor grammar and typo problems fixed.)
I think that both Starbucks partners (Starbucks calls their employees “partners”) and customers who are able to see all of the amazing thing that the brand offers, don’t see a “substantial premium,” rather, they see the ethical and responsible things that Starbucks does.
More simply said, that one cup of coffee pays for all kinds of good things. Let’s take a look:
There is health insurance for all Starbucks partners working part-time or more;
It pays for stock-options for a partners – including part-time employees;
It funds farmer support centers which help ensure that your coffee is responsibly grown and sourced; (Ideas In Action Blog)
It funds “community stores” which give up to half their profits back to their communities – and that’s a fairly new but growing segment of stores (Starbucks Community Stores)
Starbucks donates millions to help restore areas of the United States damaged by natural disaster. (Starbucks Five-Year Contribution to New Orleans Recovery Approaches $5 Million – Hurricane Katrina article).
Starbucks funds the Starbucks Foundation which makes grants to non-profits – most recently those non-profits with a focus on at-risk youth. (Starbucks Foundation)
That cup of coffee pays for a competitive 401(k) benefit for all Starbucks employees working part-time or more, which includes an employer match program.
As should be obvious, that one cup of coffee pays for all the behind the scenes that go into the stores – the administration in Seattle, research and development of new product ideas, My Starbucks Idea, and all the quality control from the coffee tree to roasting plant to your cup.
I’m in Seattle, where Starbucks is headquartered. Here, I’ve felt especially proud of the good things that Starbucks has done in its hometown. Starbucks was born in the Pike Place Market, and while I never see it advertised, I know from having been to the store at 1912 Pike Place, that at times Starbucks has offered special products where proceeds are donated back to the Pike Place Market Foundation – which helps keep the Market going for Seattleites like myself. (I’d like to see even more of those promotions!) (I made mention of one such promotion in this old blog post here – Starbucks merchandise review: May 2012)
Those are just a few examples of how Starbucks acts with a big social conscious. There are definitely more out there.
I think anyone who understands these unique things that Starbucks does would refrain from really calling it a “substantial premium” for a cup of coffee.
At least in my view, knowing all these things starts to make a cup of Starbucks coffee look like a bargain – one cup of coffee has enormous good momentum.
That is a lot of good in a cup, and I thought my readers here might be interested in this too.