Coffeenomics

The meteoric rise and startling fall of Starbucks is emblematic of the contemporary American dream — just ask the history professor who's been to 425 branches
By MIKE MILIARD  |  December 11, 2009

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In 50 states and 49 countries, the experience is the same: a placid sense of place, air suffused with the rich aromatics of fresh-brewed espresso. Customers dollop cream and sprinkle brown sugar into their drinks on their way out the door, or they stay — paging through books or talking softly while they sip, serenaded by piped-in Paul McCartney and Norah Jones. Behind the counter, green-clad baristas grind beans and steam milk, smiling as they take orders in a made-up language.

What other corporate entity but Starbucks offers such a defined experience? It's one Temple University professor Bryant Simon immersed himself in countless times over the past few years — he spent 12 to 14 hours each week observing the human traffic in more than 425 Starbucks locations in nine countries. His curiosity having been piqued by the company's breathtaking popularity, he sensed that the way we buy coffee said something deeper about ourselves.

I first interviewed Simon for another story in 2007. At the time, he'd already been at work on his book about the coffee colossus for a couple years. Now that book, Everything But the Coffee: Learning About America from Starbucks (University of California Press), has finally been published.

It's taken quite a few twists and turns on the way to the shelves of your local Barnes & Noble (which, as it happens, may itself have a Starbucks inside). After all, an awful lot has changed in the past few years. In early 2007, the Dow Jones Industrial Average was above 12,000 and unemployment was at 4.5 percent. Starbucks was commensurately flush, with some 11,000 stores in several dozen countries and revenue of $6.4 billion and counting — it would rake in $10.4 billion in '08.

By early 2009, of course, the Dow had plunged to below 6000, and unemployment was heading toward 10 percent, where it stands today.

And Starbucks? Having grown to about 16,000 stores, it announced the closure of 600 underperforming branches in July of '08 and then 300 more in January of '09, eliminating nearly 8000 jobs in that same period.

"I finished a draft, and then the company started tanking," says Simon by phone. "I kinda rewrote the whole book. In some ways, I had to go back and put everything in the past tense."

But recent sagging balance sheets aren't the only thing the world's lone superpower and the world's largest coffee purveyor have in common. In fact, Simon's book is a fascinating, sometimes dispiriting look at how Starbucks is emblematic of some deeper socioeconomic phenomena at work in this country over the past decade and a half.

The Starbucks moment
Starbucks's flagship store opened in Seattle's Pike Place Market back in 1971. Two decades later, there were still fewer than 200 locations nationwide. But not long after the company's initial public offering in 1992, its expansion took off like a rocket fueled by venti quad lattes.

It's this period — 15 years or so, from the dawning of the Clinton administration till the gloaming of the Bush regime — that most interests Simon. He calls it "The Starbucks Moment."

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