Starbucks can have it both ways

I was glad to see Tom Raftery suggest that participants in the Cork Open Coffee Club meetups ask for fair trade coffee at their next pow-wow (Open Coffee Club VC and entrepreneur meetups, started in London by Saul Klein, are now springing up around the globe). I was glad, not because I’m a fair-trade purist – I do sometimes consciously drink fair-trade java and am happy that even Starbucks has some fair trade coffee in their brew (the Ethiopian farmers and Starbucks workers issues aside, for a brief moment).

Glad, because I think you’ve got to go where the money is to effect real change and it’s both an idealistic and smart move to try to inject a greater degree of social consciousness into the world of venture capital and tech entrepreneurs. Maybe it’ll help avoid a repeat of some of the unqualified greed we’ve seen in the past that has undercut may of the positives in tech investment and innovation. Or, do I dream?

But, understanding the money equation of public relations for a publicly listed company is precisely why I can’t understand why Starbucks clearly has had such a time dealing with its obvious p.r. problem. If you’re unaware of the issues, Starbucks is fairly regularly picketed for its policies vis a vis Ethiopia’s coffee farmers, as per this recent Oxfam ‘Make Trade Fair’ blog post; there’s a pro-union movement that has it’s own IWW Starbucks Union blogsite (is that IWW, as in … the Wobblies?!); plus, a general Starbucks-trashing blogsite that tells all things negative about the coffee chain; and, on the market side, AOL’s ‘Money & Finance’ site actually lists all related blog posts on the “News & Quotes” page dedicated to Starbucks. From what I can tell, few other publicly listed companies — not even Dell! – have had that function activated by AOL on their ‘Money & Finance’ page.

Starbucks’ p.r. strategy appears woefully inadequate to cope with all of the above. There is a lame rumor response page on the corporate website, but I can’t for the life of me find a Starbucks corporate blog to show that they’re as ‘cool’ when it comes to corporate blogging, podcasting or vcasting to get their message out, as their marketing image would have us think the company is (if I’m missing an official Starbucks corporate blog or otherwise, please point me in the right direction).

A Feb. 23rd memo from Starbucks Chairman Howard Schultz, originally posted at the Starbucks Gossip blog (but, which I found through a Kevin Dugan post by way of a Todd Defren post), shows how Starbucks has gotten so caught up in the minutae of running a day-to-day business that it can no longer see the big picture.

In the memo, Schultz exhorted Starbucks senior executive management: “Let’s get back to the core. Push for innovation and do the things necessary to once again differentiate Starbucks from all others.” If they are really serious about doing that, they are missing a huge p.r. opportunity to differentiate themselves and stand out from all others by fixing the problems that are plaguing the company’s image and then actively publicizing their having done so.

Pay the Ethiopian farmers a fair price for their trademarked coffee and institute progressive labor relations policies for Starbucks employees. At first glance, this would appear to be a financial Catch-22 for Starbucks … the Ethiopia issue is tied to the price Starbucks pays for coffee and the worker relations issue is linked to the price paid for labor; raise either or both and – on paper, at least — that would appear to cut into profits and that generally drives investors to sell stock. Or, so conventional market wisdom would have it.

What Starbucks needs to do is not expend its p.r. energy and investment on trying to counter the negative publicity around these issues. Instead, it should target precisely that public most likely to sell off Starbucks stock – the investors themselves – with a public relations campaign designed to drive home the long-term benefits to its share price of an improved corporate image and recognition of its social responsibility. Reach out to the financial community — and specifically the large institutional investors — via the closed-circulation financial publications and the premium subscription industry newsletters, news wires and news sites they read; lobby the financial community through analyst outreach; take it “on the road” as an integral part of presentations delivered to key media and analysts.

Using p.r. to convince, reassure and sell those investors and shareholders on the financial benefits that will accrue over time through a socially responsible course of action is the p.r. advice Starbucks should be receiving. Won’t somebody please give it to them, now? Maybe then, we can all get back to just enjoying a nice cup of coffee and reinvesting a coupla bucks a day in a socially responsible Starbucks future.

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