If you’ve scrolled through Starbucks’ Facebook page or Twitter mentions recently, you’ve likely seen some angry messages among the photos of lattes.
“You are very wrong and stepped over my American line and beliefs,” reads one such post of dozens on Starbucks’ Facebook page on Thursday. “American First and forever.”
The most recent source of Starbucks outrage is the company’s plan to hire 10,000 refugees in the next five years, in response to President Donald Trump’s executive order that in part barred refugees from entering the US.
But despite the threats of boycott, Starbucks isn’t stepping back – and experts say that’s a smart decision.
“Big, bold action will pay off,” Chris Allieri, founder of the communications and marketing firm Mulberry & Astor, told Business Insider. “Starbucks venturing out on its own shows leadership.”
Allieri said he believes customers will demand corporate responses to Trump’s executive orders that affect civil liberties such as immigration and LGBT rights. By coming out with a strong statement and clear actions, Starbucks is ahead of the competition, he says.
According to a Harvard Business School study, 38% of Americans believe CEOs have a responsibility speak out on controversial issues, as long as they directly apply to the company’s business. As a chain with locations in 75 countries, Starbucks’ wheelhouse could include international politics.
“It’s impossible not to make enemies when companies enter the political arena, but from a business point of view, Schultz is probably right to associate Starbucks with pro-immigration stances that could tend to lessen anti-American sentiment in international markets,” Vlae Kershner wrote in Seeking Alpha, referring to Starbucks CEO Howard Schultz.
The most recent movement to boycott Starbucks is the latest in a long series of backlashes against the chain’s political statements. With experience comes knowledge, making Starbucks uniquely positioned to build its brand by taking on Trump in 2017.
The rise of the politicized latte
- Reuters/Lucy Nicholson
One of the best illustrations of Starbucks’ approach to politics took place at the company’s 2013 shareholders meeting, when a shareholder argued that Starbucks had lost customers because of its support of same-sex marriage.
“Not every decision is an economic decision,” Schultz said. “The lens in which we are making that decision is through the lens of our people.”
Yet Schultz brought up Starbucks’ financial success in the past year.
“If you feel, respectfully, that you can get a higher return than the 38% you got last year, it’s a free country,” he continued. “You can sell your shares in Starbucks and buy shares in another company. Thank you very much.”
In other words, Starbucks insists the company doesn’t make political statements to make money – but it also wants to emphasize that its business model works. This model requires Starbucks to differentiate itself, in part through limited political activism.
If Starbucks becomes interchangeable with other coffee chains, this model fails. Tying the brand to certain values and political beliefs is one way to differentiate, establishing a higher-end image that persuades customers to pay more for beverages than they would at an everyman favorite like Dunkin’ Donuts.
Starbucks has taken a stance on issues including the national debt and race in America. In September, Schultz endorsed Democratic nominee Hillary Clinton for president.
Customers have threatened to boycott the chain over big topics, like its response to Trump’s refugee policy, and small details, such as rolling out a green cup the week before the 2016 US election, which some called progressive “political brainwashing.” The chain even clashed with Trump while he was campaigning for president on the seemingly apolitical topic of the chain’s minimalist red cups.
“No more ‘Merry Christmas’ at Starbucks,” Trump said at a rally in Springfield, Illinois, in November 2015. “Maybe we should boycott Starbucks. I don’t know. Seriously. I don’t care.”
Why Starbucks can take on Trump
Over the years, Starbucks has learned several lessons about how to mix business and politics, building its brand without hurting sales.
The first is the necessity of backing up words with actions when making political statements – something the company learned the hard way. In 2015, Starbucks was forced to backtrack on a campaign to raise consciousness of racial issues in America, in which employees wrote “Race Together” on cups.
After being mocked by people across the political spectrum, the company ended the cup-centric part of the campaign and doubled down on opening stores in lower-income and minority communities.
“This is about words, deeds, and actions, not tweets,” Allieri said of companies’ reactions to Trump’s policies. “If this is seen as liberal CEOs on the coasts tweeting about Mr. Trump, that’s not the way to go.”
Second, Starbucks realized the risks associated with taking on specific politicians instead of policies.
“I’m going to quote Michelle Obama: ‘When they go low, we go high,'” Allieri said. “Don’t engage in a public spat.”
According to the Harvard Business School study, 20% of Americans believe it’s a good idea for CEOs to take stances on issues not directly linked to a company’s fundamental business, meaning broad political stances can backfire for a company.
Schultz veered from this principle in his decision to back Clinton, a move that resulted in the CEO having to publicly say after the election that Starbucks was not at odds with Trump or his supporters.
Now Starbucks is targeting policies, not Trump. Schultz can make a bold statement like “The promise of the American Dream [is] being called into question” because he has specific examples of policies Starbucks opposes that back this up.
Attacking Trump would hurt Starbucks’ brand; attacking Trump’s policies and providing examples of how Starbucks is addressing these issues demonstrates more levelheaded engagement.
- Starbucks green cup
Finally, Starbucks has built a brand in which speaking out is expected by customers and employees. The company’s established political stances mean customers aren’t going to be shocked by Starbucks getting political, even after years of boycott threats from conservatives.
“What Mr. Schultz thinks really matters, and he wears his ethos on his sleeves,” said Allieri, who also said he believes Starbucks didn’t lose sales after coming out in opposition of Trump’s executive order.
Ultimately, a large portion of Starbucks customers won’t care about the company’s political stances.
However, the coffee chain has created an image of itself as a brand that emphasizes progressive politics in hopes of elevating the chain over more inexpensive counterparts. While a segment of the population will always threaten to boycott when Starbucks expresses these beliefs, the company has data to prove that the loss of some customers would be balanced out by others, including progressives who promise to spend more at the chain.
With Trump as president, Allieri said executives across the industry will be forced to be more transparent about their values – a habit Starbucks has established over the last decade.
“Companies have to be known for something, and it’s not just your products and services,” Allieri said. “It’s who are you, what do you stand for.”