From skimping on milk to displaying anti-pride sentiments—a look at the reasons behind Starbucks’ bad reputation.
In the complex landscape of corporate ethics, few companies have shared a fate similar to Starbucks. The coffee giant has been dragged to court multiple times—for big issues, like racism, or seemingly small ones, like skimping on milk and ice in its drinks. Collectively, these controversies have significantly impacted Starbucks both financially and in terms of its reputation.
As of December 2023, Starbucks has lost about US$11 billion in value, marking a 9.4 percent decline. The company’s stocks have experienced a record 12-session decline, the longest since the company went public in 1992. The stock currently hovers around US$91.98 per share, a significant drop from the 2023 high of US$115. At the same time, political stances, union boycotts and anti-pride sentiments have further dented Starbucks’ public image.
Here is a list of Starbucks controversies over the years:
1. “Anti-pride” allegations
In June 2023, a controversy emerged at Starbucks following the initiation of a petition on Coworker.org, a platform for labor organizing, at the start of the month. The petition alleged that Starbucks managers instructed employees not to display Pride decorations this year.
Starbucks refuted any alterations to its corporate policies and claimed that it did not know any of its stores prohibited Pride month-related decorations. The company stated that it was awaiting a response from the regional manager referenced in the petition regarding the apparent discrepancy in decoration policies between workers and management.
This incident, however, has deeper roots. A year prior, the labor union Workers United reported threats from the company against union organizers, many of whom identify as queer or trans. These organizers alleged that they were warned of potential reductions in hours, jeopardizing their eligibility for health insurance benefits, including gender reassignment surgery and other affirming procedures.
2. Union busters
Recent months have seen growing calls for a Starbucks boycott due to its aggressive stance against unions. Starbucks, no stranger to anti-union tactics, closed more than 20 stores last year to discourage unionization. Since 2021, over 360 out of 9,300 U.S. stores have voted in favor of unionizing. Moreover, the National Labor Relations Board (NLRB), the US labor law watchdog, filed 100 complaints against Starbucks for over 1,000 alleged illegal actions, including terminating pro-union baristas and closing newly unionized stores.
The baristas’ union, Starbucks Workers United, deliberated the timing and feasibility of a Starbucks boycott while actively building consumer support. A nationwide Day of Action on September 14 was planned to rally customers and allies, urging Starbucks to respect workers’ rights to organize and negotiate a fair contract.
3. Shortchanging customers: no ice, ice baby
In 2016, Starbucks faced a US$5 million lawsuit from a Chicago woman who accused the company of putting too much ice in her iced latte, allegedly to save some extra bucks. Another lawsuit claimed that by underfilling its lattes, thereby shortchanging its customers, Starbucks has saved countless millions of dollars in the cost of goods sold.
However, these lawsuits didn’t carry forward. The judges concluded that when ordering iced drinks, ice is to be expected. Starbucks further emphasized that customers can specify how much ice they want when ordering coffee.
4. Political stance and boycott
In October 2023, Starbucks sued Starbucks Workers United over a now-deleted message on X, formerly Twitter, expressing solidarity with Palestinians. The union’s message led to calls for a Starbucks boycott, prompting the company to distance itself from the union’s stance. In the aftermath of this controversy, Starbucks experienced a more than 6% share decline as of December 2023.
For those questioning why the coffee company is engaging in political matters, it’s essential to delve into its history, particularly the tenure of former CEO Howard Schultz, who joined the company in 1982. Schultz leveraged the Starbucks brand to initiate conversations on topics such as race and gun violence.
5. Racial discrimination incidents
In 2018, two black men were arrested at a Philadelphia Starbucks after a manager called the police when they didn’t make a purchase and refused to leave, sparking accusations of racial profiling. The CEO publicly apologized, calling the incident “reprehensible”, and Starbucks temporarily closed 8,000 stores for racial bias training.
In an unexpected development, a federal jury later ordered Starbucks to pay US$25.6 million to Shannon Phillips, a former white regional manager who was fired amid the incident. The court ruled that the company violated her civil rights and state anti-discrimination laws.
In another instance, a California Starbucks asked a black man to wait outside due to the store being overcrowded. However, other customers—white customers—who went in after him were not asked to wait outside. Plus, in 2018, a Starbucks employee wrote a derogatory word on the cup of a Latina customer.
Though Starbucks has emphasized its claim of inclusivity and provision of employee unconscious bias training, instances of alleged racial discrimination keep surfacing within the company. These allegations suggest challenges in fully implementing its stated commitment to equality and diversity.
6. Starbucks milk scandal
In 2016, Starbucks faced allegations of overcharging customers by serving lattes that were 25 percent smaller than advertised using a cost-saving milk recipe adopted in 2009. Plaintiffs Siera Strumlauf and Benjamin Robles claimed Starbucks instructed baristas to use milk pitchers with low “fill to” lines and leave a quarter inch of space in cups, resulting in underfilled lattes. The lawsuit, accusing Starbucks of saving millions and unjust enrichment, was later dismissed due to insufficient evidence.
Unfortunately, these are just some of the many controversies that have positioned Starbucks at the center of numerous disputes. It has been called out for not having enough fruit in its fruit drinks, milk in its lattes and ice in its iced drinks. As the new year begins, will Starbucks finally change its ways for the better?
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