Date: 2024-08-16 Page is: DBtxt003.php txt00026292
STARBUCKS
How was your visit? Let us know.
Nice of Starbucks to ask ... my response is quite a rant!
How was your visit? Let us know.
Nice of Starbucks to ask ... my response is quite a rant!
Peter Burgess COMMENTARY
I laughed when I saw the message below from Starbucks in my incoming emails!
Yesterday ... Friday 23rd 2024 ... I visited Manhattan to attend an evening get together with some professional friends and aquaintances. I was a little early and needed to kill some time before going to the event. What better way than to have a quiet coffee in a local coffee shop!
My first visit to Manhattan was in the summer of 1960. I came on an Air France Boeing 707 charter flight from London Heathrow to New York Idlewild organized by the University of Cambridge Canada Club. In 1960 in New York most drug stores had a food counter where a cup of coffee was priced at 5 cents. Dunkin Donuts had just started and their marketing pitch was that they sold a good cup of coffee for 10 cents ... and this high priced better coffee turned out to be a big success.
But this visit to a Starbucks coffee shop in Manhattan was a little different. As an 84 year old, I could not understand 95% of the menu that was on display ... and I went into shock when I looked at the prices!
I eventually purchased a cup of coffee for $5.39 inclusive of tax. Nothing special ... just a paper cup (modest sized) of coffee with milk!
There was seating for about 8 people ... about 6 high stools in front of a shelf in front of the store windows and 2 ordinary wooden chairs next to a small table available I think for the disabled. I used one of these chairs to sip my (incredibly valuable) coffee and kill some time.
It was fascinating to watch the flow of customers coming and going ... mainly young and most of them using the order ahead option so that they could be in and out in about 20 seconds!
This coffee shop location was on Park Avenue, just South of Grand Central terminal ... one of the top office locations on the planet. Nobody seemed phased by the prices ... except me, an old man that had memories of good coffee at 10 cents a cup!
But while Starbucks and its investor owners are happy, and rich customers really don't care about much, the bigger more complete coffee story is really pretty awful.
Many decades ago I had a fast track career in the corporate world ... I was only 26 when I got my first time as a corporate CFO and spend around 20 years doing all I could to help companies earn more profit. But then I got some opportunities to do work for the World Bank, the United Nations and other international organizations, private and public, around the world! Some of this work was to do with agriculture and fisheries.
One of my World Bank assignments was to do with helping to reform and modernise the coffee sector in Burundi. Though the coffee project was technically successful, the region of Burundi and Rwanda went into a genocidal meltdown which wrecked everything.
For me, I did learn a lot about the sad state of international agricultural markets including coffee. Some people and their companies make a lot of money getting agricultural products from farm to market with both the producers and the customers funding their abusive economic behavior. Sadly, it is how a 'free market' behaves, and a 'free market' is what enables almost all the abusive economic behavior.
In my view, this argument is convenient but it is also wrong. A well functioning regulated market can be very good with a lot of benefit well distributed ... but that is rare. In the early days of the new Burundi Coffee Auction the sellers ... essentially the farmers and local traders ... more than doubled the prices that had previously been bid by international traders selling on world markets. Prior to the new well regulated auction market the suppliers had been 'gamed' in a way that deliverd low prices to local farmers and suppliers with no recourse at any level.
When I look at the 'pricing' behavior of companies like Starbucks I see a world where anything goes as long as it enables the biggest possible profit for corporate owners ... and everyone else qre simply pawns in a game.
Which reminds me of a little incident in my life several decades ago. I am not very good at board games so chess ... a two dimensional borad game is a challenge ... but some family friend introduced me to a game of three-dimensional chess. It never became widely popular, for good reason ... but I remember it because I think the world of corporate management is in a single dimension world ... all about profit for investors ... when what is needed is a three dimension management framework where society and environment are treated with the same rigor, purpose and reward as economic profit.
I learned financial accounting more than 60 years ago ... about 100 years after accountancy had taken on its modern form ... and it bothers me that the core concepts of management accountancy have more or less the same framing as they did when they were first adopted fairly early in Queen Victoria's reign in the UK and then around the world. Frankly, accountancy in that era was a quite good fit for purpose for the emerging industrial revolution.
But surely the time for an upgrade is now long overdue to suit a modern world which now has a very different technological foundation. The 'financialization' of most economic activity over the past 40+ years has enabled an amazing accumulation of wealth for a few ... but at a huge social and environmental cost which is ignored in most discussion of economic performance!
With the sort of corporate accountability that I would like to see ... it would be easy to see to what extent the good coffee service that Starbucks delivers is offset by all sorts of abuse in terms of customer pricing, employee wages and working conditions, and supply chain issues going back all the way through the supply chain to the international coffee markets, coffee traders and coffee farmers. Net net I cannot pretend that I like what Starbucks stands for ... and the fact they have got such a powerful market position suggests that our society is in deep trouble though very profitable for the actors who are in control!
Peter Burgess
PS. By the way, I think the incentive program Starbucks are inviting me to engage with ended almost 4 months ago!
Starbucks Rewards
February 24th 4:02 PM
to me
STARBUCKS® REWARDS
Hello Peter,
Thanks for coming to Starbucks at 39th & Park in New York,NY on Friday February 23, 2024.
We appreciate your visit and we'd love to know how we can make it even better.
Your feedback is important to us, so please take this short survey that will take about 3 minutes to complete. By participating in the survey, you will be able to enter the Starbucks Customer Experience Sweepstakes for a chance to win a $100 Starbucks Gift Card! One hundred gift cards will be awarded each month.
The survey is available for a limited time only, so be sure to fill it out soon.
Click here to take the survey.
Thank you,
Starbucks® Rewards
NO PURCHASE NECESSARY. Legal residents of the 50 United States (D.C.)
18 years or older. One entry per month, regardless of entry method. Ends 10/01/2023.
To enter and for Official Rules, including odds, alternate method of entry, and prize descriptions, visit https://starbucks.promo.eprize.com/survey.
This email was sent to peterbnyc@gmail.com.
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