Starbucks, Israel, and the Irrepressible Politics of the Global

A Guest Post by Bryant Simon

Fans and critics of Starbucks like to joke, or bemoan, that the idea that Starbucks is everywhere. A cartoonist once imagined Starbucks opening stores in its own bathrooms. Some urban planners worry about the so-called Starbucks effect, about the creation of a global monoculture, where everyplace has a Starbucks and every place is the same. But that’s the thing, Starbucks isn’t everywhere. It isn’t in Rome, it isn’t in Narobi, and it isn’t Tel Aviv.

Where Starbucks isn’t tells us something about cities and spaces, and it tells something about the enduring power of politics and meaning of politics in everyday consumption in age of the global. It tells about the particular, about the nation, and the pushback against the universal. This, then, is a first look at one place Starbucks isn’t, Israel, and what this absence can tell us.

In January 2009, just after Israel had launched an offensive in Gaza to stop Hamas rocket fire, a group of protesters converged on a Beirut Starbucks. The demonstrators pasted a Star of David over the company’s green-and-white logo. “The children of Lebanon and Palestine,” read one banner, “warn that Starbucks drinks lead to buying deadly weapons.”

As it had done before, Starbucks quickly denied the charges leveled by the Beirut protestors. A public relations representative issued a statement saying, “rumors that Starbucks Coffee Company and its management support Israel are unequivocally false.” It added, “Starbucks is a non-political organization and does not support political causes.”

With that last remark, Starbucks showed, despite having coffee houses in fifty countries around the world, that it didn’t yet fully understand the global marketplace.

The global economy surely opens possibilities and larger markets for companies, but it creates along the way pitfalls and problems. That is, in essence, the lesson of Starbucks’ brief life in Israel and it’s longer tenure in the Middle East. Companies can try to avoid politics as much as they want and as loudly they insist (like Starbucks did in the states when it said it didn’t want to ban guns from its stores and get involved in politics), but there are some places and some issues where and when that just can’t happen.

In 2000, Starbucks, the Seattle based coffee giant, opened a few cafes in Israel. Within three years, all six of the stores with the familiar green logo and comfy couches in Tel Aviv and Herzeliya Pituach, launched in partnership with the Delek Group, were closed after the company had failed to catch on and ran up $6 million in debt. Starbucks executives told reporters that the Intifada – in other words geo-politics – had done them in. “We knew that we were a target in Israel,” a Starbucks official gravely explained to a journalist. Yet this retreat didn’t end the politics for the coffee company or all of the sudden simplify its global position.

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Even before Starbucks opened in Israel, pro-Palestinian groups in the United States and England launched a series of boycotts against the company. In a well-rehearsed bit of guerrilla theater in 1996, thirty soldiers from the self-styled Badger Defence Force stormed a Starbucks on London’s Oxford Street armed with water pistols. Using what they labeled, “the logic of Israeli settlers,” the badgers “evicted customers and erected the first badger settlement in London near the espresso machine.” At the same time, they handed out fact sheets designed to prove that Howard Schultz, Starbucks’ CEO, was “a major supporter of the Israeli state.”

That wasn’t the end of the Starbucks story in the Middle East or its global involvement in Middle East politics. The idea that Schultz was pro-Israeli won’t go away. Backers of the Boycott Israel Campaign put Starbucks near the top of its list of Pro-Israeli companies. The group complained that in 1998, the Jerusalem Fund of Aish HaTorah honored Howard Schultz, as they had well-known conservatives Margaret Thatcher and Jeanne Kilpatrick politicians before him, citing his key role in “promoting close a alliance between the United States and Israel.” They also pointed out that Starbucks boasted about Schultz’s honor from the group on the company’s official web-page, thus making clear Starbucks’ politics and justifying its call for a latte boycott.

On July 4, 2002, a year before Starbucks pulled out of Israel for good, Schultz gave a speech at a Seattle synagogue that fueled pro-Palestinian and anti-Zionist enmity toward his company. “What is going on in the Middle East,” he contended, “is not an isolated part of the world. The rise of anti-Semitism is at an all-time high since the 1930s. . . . This isn’t about Israel or land. It’s about legitimizing attacks on and murder of Jews. Nothing less.” He concluded his talk, calling on “every Jew in America” to defend Israel.

American Muslims for Global Peace and Justice could hardly believe what they heard. What they heard was not the thoughts of a private citizen, but the political views of corporate CEO. The US based-group felt like the Starbucks chairman “delegitimize[d] the Palestinian desire to achieve the right of freedom, and to defend themselves against attacks by asserting that the struggle is based on religious as opposed to political grounds.” Based on this assessment, they urged “Muslim[s] to take up this boycott in every city, in every neighborhood where Starbucks operates. . . . You Might Save a Life in Palestine.”

When Starbucks started to scout out locations near the American University in Beirut in 2003, protestors met them at one of the proposed sites. No doubt, attacks from Muslim groups in the US and abroad made Starbucks, a company that trades on image perhaps more than coffee, nervous, especially as it began to open stores not just in Beirut, but also in Riyadh, Dubai, Jakarta, and eventually Cairo – all growth areas for the company.

For some, this anxiety explained Starbucks’ pull back from Israel. Perhaps the company had to, given the tinderbox that is the Middle East, pick Israel or one of its neighbors a place to do business. Even that, though, did not safeguard it from political reprisals.

Many Israelis didn’t buy Starbucks’ story about leaving the country either. They insisted that Starbucks stumbled not because of the Intifada, that is politics, but because people there didn’t like the American company’s coffee. For some, it was the pushback of consumer nationalism and pride in place that hurt the company. Israelis, some said, didn’t think they needed to be taught about coffee from an American company, a company from a country that didn’t know that much about coffee to begin with. Others didn’t take well to Starbucks’ takeaway coffee operation – a product of the relentless movement and non-stop driving of US culture and life. Like most Europeans, Israelis tended to stop for a moment and drink their coffee in the café out of porcelain cups, not on the go out of paper containers. And while Starbucks skipped out of the Tel Aviv area, several chains serving American and Italian style coffees have thrived in Israel over the last decade opening multiple stores and gaining loyal followings. There is another angle. Though Starbucks has over the year forced its way into other markets in other urban places – Paris, Madrid, and Vienna for instance — that didn’t immediately take to its tastes or take-away impulses, it eventually endured some early losses and established a foothold in these locations. But not in Israel. The company showed little patience there. That brings the story, then, back to politics and the global.

In another globalized twist on the story, Starbucks’ hasty flight from Tel Aviv and the areas around it earned it the enmity of pro-Israel groups in the United States. “Disgraceful!” one activist wrote of the company’s decision. He thought Starbucks backed out of Israel in response to Arab-led boycotts. “Let us as Jews, let them know that we will not patronize their stores for their position on Israel”.

Even as it insisted it was making simple, straightforward business decisions, Starbucks got ensnarled in Middle Eastern politics again in 2006, even after it left Israel. Throughout the summer as the border skirmishes between Israel and Lebanon blew up into a deadly war, rumors swirled across the web that Howard Schultz was funneling money to Israeli defense forces. The chairman and the company’s PR department moved quickly – at the time Starbucks had multiple stores in Saudi Arabia, Jordan, Kuwait, United Arab Emirates, Malaysia, and other places in the Arab and Islamic world – to rebuff the charges. “Starbucks,” Schultz insisted on the company’s website, is a “non-political organization” that does not “support political causes.” Western and Middle Eastern media outlets backed him up saying that the rumors about his funding the Israeli army were false. But still the charges – really the feelings behind them – didn’t go away. “I believe Starbucks is supporting Israel,” a young Kuwaiti argued even after he read the disclaimers, “it is an American company therefore it is an obvious conclusion.” When asked if he would back a boycott of the company, he answered, “Of course . . . they are killing children in Lebanon.”

In end, maybe that was it. Globalization expanded the latte market, but these opportunities came with pitfalls. Starbucks, then, weighted it possibilities. Israel was just too hard of a market, but the move out of Israel was at the same time just as surely about navigating the tight channels of the global markets, about the politics that were never that far from the business in some parts of the world. There were too many global possibilities in Dubai, Kuala Lumpur, and Beirut, with too many free-spending, luxury seeking customers in these different parts of the Muslim world, to make the company want to do the hard work and make things run profitably in Tel Aviv.

But even that move couldn’t save Starbucks from the repercussions of persistent political divides. Even in the US, Starbucks faced pressure over its Middle East business decisions. Muslim college students boycotted the brand because, they said (with little credible evidence), that Howard Schultz funneled money to the so-called “Israeli Defense Force.”

Again that is a peril of the global economy. Rumors can flow perhaps even easier than money, brand names, and investment across national boundaries. But nothing can escape politics in those places and communities where tensions run so deep.

Bryan Simon is a professor of history at Temple University.  His most recent book, Everything but the Coffee: Learning about America from Starbucks, was released in paperback in 2011.

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About LaDale Winling

LaDale Winling is assistant professor of history at the Virginia Polytechnic Institute and State University. His book project, Building the Ivory Tower, examines the role of universities as urban developers in the 20th century. Learn more about him at Urban Oasis.

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