Starbucks knows it cannot ignore its critics. Anti-globalization protesters have occasionally trashed its coffee shops; posh neighborhoods in San Francisco and London have resisted the opening of new branches; and the company is a favorite target of internet critics, on sites like www. ihatestarbucks, com. Mr. Schultz is watchful, but relaxed: "We have to be extremely mindful and sensitive of the public's view of things... Thus far, we've done a pretty good job." Certainly, as reviled icons of American capitalism go, Starbucks is distinctly second division compared with big leaguers like, say, McDonald's.
The reason, argues Mr. Schultz, is that the company has retained a "passion" for coffee and a "sense of humanity". Starbucks buys expensive beans and pays its growers—be they in Guatemala or Ethiopia—an average of 23 % above the market price. A similar benevolence applies to company employees. Where other corporations seek to unload the burden of employee benefits, Starbucks gives all American employees working at least 20 hours a week a package that includes stock options ("Bean Stock") and comprehensive health insurance.
For Mr. Schultz, raised in a Brooklyn public-housing project, this health insurance-which now costs Starbucks more each year than coffee—is a moral obligation. At the age of seven, he came home to find his father, a lorry-driver, in a plaster cast, having slipped and broken an ankle. No insurance, no compensation and now no job.
Hence what amounts to a personal crusade？ Most of America's corporate chiefs steer clear of the sensitive topic of health-care reform. Not Mr. Schultz. He makes speeches, lobbies politicians and has even hosted a commercial-free hour of television, arguing for reform. of a system that he thinks is simultaneously socially unjust and a burden on corporate America. Meanwhile the company pays its workers' premiums, even as each year they rise by double-digit percentages. The goal has always been "to build the sort of company that my father was never able to work for." By this he means a company that "remains small even as it gets big", treating its workers as individuals. Starbucks is not alone in its emphasis on "social responsibility", but the other firms Mr. Schultz cites off the top of his head—Timberland, Patagonia, Whole Foods—are much smaller than Starbucks, which has 100,000 employees and 35m customers.
Indeed, size has been an issue from the beginning. Starbucks, named after the first mate in Herman Melville's "Moby Dick", was created in 1971 in Seattle's Pike Place Market by three hippie-ish coffee enthusiasts. Mr. Schuhz, whose first "decent cup of coffee" was in 1979, joined the company only in 1982—and then left it in 1985 after the founding trio, preferring to stay small, took fright at his vision of the future. Inspired by a visit to Milan in 1983, he had envisaged a chain of coffee bars where customers would chat over their espressos and cappuccinos. Following his dream, Mr. Schultz set up a company he called "I1 Giornale", which grew to modest three coffee bars. Then, somehow scraping together $ 3.8m ("I didn't have a dime to my name"), he bought Starbucks from its founders in 1987.
Reality long ago surpassed the dream. Since Starbucks went public in 1992, its stock has soared by some 6,400%