STARBUCKS opens a new cafe in China roughly every nine hours.
This is the untold story of how a values-driven American brand has cozied up to Beijing in pursuit of explosive growth—a strategy that grows riskier every day
But the coffee giant isn’t just building stores. It's boosting the Communist Party.
In April, when Howard Schultz returned to Starbucks for his third and—the company swore—final stint as CEO, the company looked as if it needed coffee. The pandemic had done a number on sales. Shares had stumbled.
One in four baristas was reportedly quitting before even qualifying for the company’s famous benefits. In an industry with notoriously low union representation, Starbucks cafes had steadily begun to unionize, with more than 100 of them asking to hold union elections. In response, Starbucks promised to increase pay raises and improve benefits— for the nonunion employees. A regional office of the National Labor Relations Board accused the company of more than 200 labor violations. Some Wall Street analysts were citing all of the above as reasons to bail.
The Seattle-based coffee giant has been working quietly toward this goal for almost 30 years. It’s taken the usual steps necessary to operate successfully in China as a foreign enterprise, such as building rapport with Communist Party officials, setting up joint partnerships, and expanding slowly yet strategically. But Starbucks has gone much further in many ways than other U.S. companies have, even Tesla and Apple, whose CEOs have made headline-grabbing agreements with President Xi Jinping’s ruling party (In December 2021, eight days after President Joe Biden signed the Uyghur Forced Labor Prevention Act, Tesla opened a new dealership in Urumqi, the capital city of the Xinjiang region, where the U.S. held that China was carrying out forced labor and genocide.)
Schultz had been on the job for a month when he told investors on an earnings call that the coffee juggernaut had reassessed everything that made Starbucks Starbucks. It was prepared to emerge “a truly different kind of company” according to a concurrent press release, and Schultz reassured investors that Starbucks would, in fact, remain “a growth company.” Just maybe not in the United States.
It’s estimated that a new Starbucks cafe opens in China
