For Starbucks, success part of social impact

Fast Company

There’s laughter behind the counter at the Starbucks in Ferguson, Mo. The young people in green aprons, most of whom live within 5 miles of the store and possess a hard knowledge of the streets outside, razz each other and joke easily with regulars.

Barista Deidric Cook, 21, who was living out of his Ford Focus before being hired last year, brings the homeless woman who routinely parks her shopping cart outside some tea.

Around lunchtime, about a dozen men and women will gather in the café’s community room for a free job-skills training class led by local members of the Urban League.

Three years ago, Michael Brown was shot dead by a police officer on a nearby block, kicking off waves of protest and rioting that made headlines for months.

This was a city of torched police cars and smashed storefronts, hollowed out with sorrow and rage. So there’s something both bizarre and comforting about walking into Ferguson’s year-old Starbucks and experiencing the chain’s familiar, coffee-scented calm — not to mention watching Brown’s charismatic uncle, who works here as a barista, prepare lattes behind the counter.

This café in Missouri is one of 15 that Starbucks has committed to opening in underserved communities nationwide by the end of 2018 as part of its larger social-impact agenda, which over the past three years has grown increasingly aggressive.

In 2013, the company pledged to hire 10,000 veterans and military family spouses within five years and, having met the goal a year and a half early, upped its “hiring and honoring” commitment to 25,000 by 2025. In 2015, the Seattle giant launched another hiring initiative, this one to bring on board 10,000 “opportunity youth” (men and women between the ages of 16 and 24 who are not in school or working). The company has since hired 40,000, and this past spring pledged to reach 100,000 by 2020.

Global responsibility chief John Kelly says that senior leadership routinely asks itself “Why not us?” before taking on the years-long operational demands of any of these various initiatives.

“Like a lot of companies, we can have an impact. We could write a check, we could do some volunteering. But that’s not enough.”

There is certainly a long game at play here — the Community Stores program represents a strategic opportunity, for example, for Starbucks to diversify its store portfolio as it pursues its goal of expanding into new markets with 3,400 new U.S. stores by late 2021.

Yet Starbucks’s new CEO, Kevin Johnson, whom founder Howard Schultz handpicked as his successor, insists that the motivating factor is his 330,000 employees around the world; if they feel they are a part of something bigger than themselves, then that alone is good for business.

“This is the core for our reason for being — to leverage our scale for good,” says Johnson. “It is possible for a publicly traded company to drive an agenda that is not only about shareholder value but is about social impact that helps the people and communities we serve.”

It was a risk for Starbucks to bring its brand to Ferguson. In terms of economic development, the city was a dead zone.

Thirty-seven businesses in Ferguson had been damaged in the riots, 17 of them destroyed. But even beyond the obvious financial risk, Starbucks knew it would be easy to get it all wrong, to prolong the embarrassment of its widely lampooned #racetogether campaign by appearing to swoop into a famously hurting place with a touchy-feely mission statement and an expensive drinks menu.

“Many people told us, ‘You do not have a role here,’” says Kelly. “Well, conversations about race are one thing, but this is all about creating opportunity.”

Grief, food insecurity and homelessness remain common struggles for the 23 employees at the Ferguson Starbucks.

“When one of my partners, a young woman, comes to me and says, ‘I’m going to sleep in my vehicle for another night in the Walmart parking lot,’” says store manager Cordell Lewis, “how am I ever going to get on that person and say, ‘You’re late, you’re not in dress code’?”

Lewis and his district manager, Nancy Siemer, offer employees a varied and ever-evolving range of assistance, including making sure they know which homeless shelter is on which bus line.

“He’s like a dad around here,” says 20-year-old barista Adrienne Lemons, whose father went to jail shortly before she was hired and whose paycheck must stretch to help care for her three younger sisters. “I’m not going to lie and say I haven’t come into work with (tears) on my shoulders, but this is our home away from home.”

Starbucks didn’t just go ahead with the store in Ferguson — it promised to build 14 other stores in low- to medium-income urban markets. (Six have opened to date in locations including Jamaica, Queens, and Long Beach, Calif.) In each spot, the company hires local minority- and women-owned contractors and vendors, works in tandem with local government and civic leaders and partners with nonprofits to offer young people free, on-site job-skills training from the Starbucks customer-service curriculum.

Ferguson demonstrates what a successful effort can look like.

“The store is turning a profit in year one,” says Johnson. “We’ve specifically called out an intentional part of our strategy, which is to look at these Community Stores and make the investment in areas that others wouldn’t.” The café has seen sales growth of 15 percent since opening, ranks in the top 25 percent of food sales in the St. Louis area, and boasts a lower staff-attrition rate than the average Starbucks.

The benefits have spread to Natalie’s Cakes and More bakery. Back in 2014, owner Natalie DuBose was a single mom of two young kids. On the night word spread that Ferguson cop Darren Wilson wouldn’t be indicted in Brown’s killing, she got a call that her new shop had been damaged in the chaos.

A few days later, a stranger walked into her boarded-up shop. The woman took hold of DuBose’s shoulders and asked, “Are you OK?” They embraced and sobbed. DuBose soon learned that the visitor was Siemer, whose husband had grown up in Ferguson just a few miles from where the rioting took place. She had seen DuBose crying on the local news, vowing to rebuild.

Soon Siemer was stopping in regularly, each time bringing higher-level Starbucks executives with her to chat and try some of DuBose’s signature cake. In April 2015, after attending the groundbreaking ceremony for the Ferguson store, Starbucks senior VP Mesh Gelman formally asked DuBose if she was interested in selling her caramel cake at Starbucks.

On the afternoon I visit her shop, DuBose is cleaning up pizza boxes. She has just finished lunch with the 10 local teens she’s hired for a 90-day summer program as part of her Sweet Success youth program. DuBose’s caramel cake is available at 32 Starbucks as well as five local grocery stores. She’s grown her staff from 4 to 22 employees.

“It used to be I wanted a career that allowed me to take care of my kids,” she says. “Now, all of a sudden, I can help somebody else take care of their kids.”

She tells me she wants to grow 10 times in the year ahead, in terms of employees, locations, community service — all of it.

But there are lines she will not cross. A chain of high-end coffee shops recently approached her, eager to sell her cake. DuBose does not have an exclusivity contract with Starbucks and realizes she would be giving up money the Seattle giant likely wouldn’t begrudge her.

“Nah, I could never do that to Starbucks.”

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