COFFEE giant Starbucks needs to figure out a strategy for dealing with the bad press the company has been getting lately over its dispute with Ethiopian farmers before the criticism undermines the company’s brand image.
Insults like that made by company chairman Howard Schultz at yesterday’s annual shareholders meeting make the company look extremely uncool.
And that’s a problem because Starbucks is all about being cool.
Reports BusinessWeek in the last two paragraphs of its story about the meeting: “Schultz implied that Oxfam and other groups were attacking Starbucks because of its prominent brand. ‘We’ve learned that perhaps one of the reasons that the NGO (nongovernmental organization) is involved in this is because they’re in a membership drive, and perhaps Starbucks is being used as a foil’.”
Intelligent debate, not insults needed
What a weak and unsophisticated remark. Note the two uses of “perhaps” in his comment. Chairmen of big companies don’t usually speak in such indefinite terms. He seems to be taking the criticism from Oxfam personally and dismissing that his opponents might actually believe in their arguments.
Anyone who has seen the Oxfam video of protesters picketing outside in the bitter cold knows better. People don’t willingly subject themselves to discomfort unless they actually believe in what they’re doing.
Oxfam’s Seth Petchers is much too kind in his response to Schultz’s remark. “To suggest that we would be supporting these farmers’ organization in order for some sort of gain, financial or otherwise, is not true,” he tells BusinessWeek. “It seems like an attempt to distract from the negative publicity Starbucks is getting on this issue.”
No Seth, it’s really just an insult and he should apologize and then get down to work trying to figure out a solution that will settle the dispute. That means talking and listening to each other, perhaps publicly on the Web where everyone can see and hear both sides’ positions and make up their own minds.
Heads in the sand
A few moments ago, I visited Starbucks’ website in the hope of learning about the company’s side of the story. But I couldn’t see anything posted prominently that would explain their position on the Ethiopia issue. They even have a rumor response section on their site, but this particular topic wasn’t being addressed there.
What I did notice was a headline for a news release about yesterday’s annual meeting which reads: “Starbucks Serves Up Success During 2007 Annual Meeting of Shareholders.”
With the Ethiopia trademark issue getting coverage in BusinessWeek, The Wall Street Journal, The Australian, on the BBC and countless websites around the world, such “happy copy” further reinforces the impression that Starbucks has its head in the sand and is completely dismissing Oxfam and poor Ethiopian farmers as inconsequential.
Ignoring the issue, trading YouTube videos, writing letters to editors, making snide remarks to reporters, and simply acting like an arrogant big corporation isn’t going to work. That’s not what people want from the “Starbucks experience.”
Note: This is the second time I’ve commented on Starbucks in a week, so it might look like I have an ax to grind here. But I don’t. I have no stake in this debate at all. I’m just looking on as a company that probably is a better corporate citizen than most gets itself into trouble because of a lack of appropriate communication. If I were a shareholder, and I’m not, that would worry me. — Dominic Jones