Why Is Starbucks So Expensive?
150 million Americans are coffee drinkers. Whether it’s from Starbucks, Dunkin’ , or the comfort of their own home, there is no denying that coffee is a very popular beverage. There is however, a cost when it comes to coffee and I’m not talking about the energy boost you get. One 16 oz Caffé Americano from Starbucks costs $4. This may seem like a small price to pay, but when compared to your at home coffee maker and other retailers, is actually quite expensive. I mean, have you ever really thought about how much money you spend on coffee each year? I am here to ask, why is Starbucks so expensive? and furthermore, why do so many people pay for such pricey coffee? I myself, enjoy Starbucks quite a lot. I live in a small town where we only have a Dunkin’ Donuts, so when I am able to get Starbucks I leap at the chance. While I’m more of a fan of iced coffee drinks, I find that my favorite one costs me a whopping $7 a cup. As ridiculous as it sounds, the sweet cream cold foam is heavenly and I must say, worth it. The Starbucks customizations are superior to Dunkin’ Donuts, which is my main reason for splurging when I get the chance. While I am aware of why I spend so much on Starbucks every once in a while, I know of others who get these drinks every single day. Doing the math, that is a little over $2500 a year. So what I want to find out is, what drives people to spend this kind of money on Starbucks? As a broke college student, I am extremely curious as to how and why people do this.
I’m not the only one thinking this. A lot of people notice this, just check out Twitter, Facebook, and just about any form of social media. (See pictures to the left.) Many complain about the insane prices, but still continue to purchase Starbucks coffee. Others tend to look down on Starbucks drinkers and say things like “It must be for the brand name”, “They must have a lot of money to spend.”, and “They think it makes them look cool or boujee.” Of course we know that Starbucks is a big name brand. Many may love the look of that white and green logo when they walk into work or post an instagram or Snapchat story. I vividly remember in middle school how “cool” it was to show off your aesthetically pleasing Starbucks drink on social media. Many who simply didn’t even like coffee but rather ordered a coffee-less frappuccino because it was the in thing to do. As ridiculous as it sounds this used to be me until I started to actually appreciate coffee. While this is the case with kids what about those teens and adults who actually drink coffee? For one, I must say Starbucks makes some really beautiful reusable cups. This is something I haven’t seen done by any other coffee brand, at least not to the extent Starbucks does.
Starbucks comes out with different cups every season, which often sell out within the first few days of launching. So along with the idea of “looking cool,” Starbucks has found a way to let customers express their style, along with a lot of free promotion. A 2017 study was done to show how branding can even enhance taste. With Starbucks being such a popular brand, people are more likely to buy it for its aesthetic. The overall idea, is that Starbucks is used for its branding and quality products which is why people spend so much money on it. According to Amit Ahuja, a coffee connoisseur, when people are paying for Starbucks they are often paying for the branding. When giving people a taste of Starbucks $6 coffee vs McDonald’s $1 coffee, most people picked McDonald’s. This says a lot about how there is really no superiority to the coffee beans a Starbucks uses. It simply shows how brands play a big role in peoples lives, even when it comes to their beverage. While branding is a huge part of what persuades people to buy an expensive drink, there is more to it than that.
I can’t help thinking, do people pay so much more for Starbucks for the companies beliefs, atmosphere and ideologies they represent? This question matters because it could bring light to what Starbucks might say about its customers and what is idolized in our society. It may seem like a reach but if you think about it, this question opens up doors to the way people think about and perceive a $7 Starbucks beverage. I want to gather information on how individuals allow expensive coffee to identify them and determine their overall class status. This goes deeper than branding because it is about more than looking cool or putting on a front. A companies core values can often be overlooked, but many may be giving in to this coffee because their beliefs correlate with that of the company’s.
Let’s take a look at Chick-fil-A. There has been a lot of backlash against them for their donations to organizations that have anti lgbtq+ views. Many have taken a stance to no longer spend their money there. The business did not have a huge loss as many people still eat there, but it did influence many to not eat there anymore. Because of this, Chick-fil-A gave a statement in a press release that they will no longer donate to these organizations. They explicitly stated what organizations they would focus on which includes youth education, fighting youth homelessness, and hunger. This encouraged those who stopped spending their money on Chick-fil-A, to give them another chance. This proves that there are people out there who think about where they are spending their money. In recent events, people are opting in to spend their money at black owned businesses in support of the Black Lives Matter movement. There are people who want to know their money is being put to good use and invested in the core values they believe in. In light of that, Starbucks has openly stated that they support BLM and will let their employees wear attire in conjunction with it. This gave many individuals a reason to invest more into this establishment.
A writer for CNBC named Shawn Carter, wrote an entire article on why he refuses to give up his daily Starbucks, despite the cost. He found that he spends around $2,300 annually on his chai tea lattes.
Carter explains that the atmosphere of Starbucks is the main factor making him come back. In fact, many others feel the same as he does, because Starbucks gives such a welcoming feeling to their customers which results in loyalty to this coffee shop. To further his argument, he shows evidence from a self made millionaire that cutting your spending on coffee won’t make you rich, so why not go for it?
However, while many feel Starbucks is welcoming, others think it is more about fitting in. Mae Rice wrote an article for Vox on how she finds “fitting in” at Starbucks to be a privilege. In 2018, two black men were arrested for sitting down in a Philidelphia Starbucks before ordering a drink. This was blatant racism, but people still continued to order their daily Starbucks. Rice explains that those who have little to no chance of being discriminated against such as white and cisgender individuals, find it relieving to be accepted in such an establishment. This is an example of the self seeking acceptance individuals want, they want to feel like they belong. In this way, they feel superior and as if their class status is higher than it actually is. Being in such an establishment, gives people that little boost of confidence that make them feel “important.” A former Starbucks employee made a post on what he noticed about every customer he has encountered. All of these people have this look to them that screams “I have money!” which was mostly elders and professional individuals. He states that, “It is all about them giving off a certain image. So since they have the money, instead of saving a couple bucks and going somewhere else they splurge just so everyone else knows that they are able to afford Starbucks products.” Many want to put on a facade to let others know that they can afford such products which boosts their own ego. It holds a priority in their lives.
Rice also explains that the atmosphere of Starbucks plays this important role in individual’s lives. It becomes routine to spend less than $10 and sit down in an establishment that is described as top tier by societal standards. It makes you feel good about yourself, like you are this important figure that can afford an outrageously priced drink. It becomes familiar, like home, which keeps those who can’t be discriminated against, coming back for more.
Despite the discriminatory incident in 2018, there are initiatives Starbucks has taken to be more culturally aware. For instance, after the incident went viral, Starbucks closed all stores for an afternoon to hold racial bias training. Starbucks even discontinued the use of putting “Merry Christmas” on cups to be more inclusive to customers who may not celebrate this Christian holiday. They also launched a campaign to have baristas talk about race with their customers which was later scrapped. While many found these ideas to be respectable, conservatives specifically started to have a hate for Starbucks. Howard Schultz, the founder of Starbucks stated that the company would give jobs to 10,000+ refugees over the years. This came right after Donald Trump initiated a refugee ban, which of course angered his supporters.
Even today, conservatives are angered that Starbucks is allowing their employees to wear Black Lives Matter apparel. It is clear that Starbucks is a liberal company, which appeals to especially the younger crowd. Schultz has repeatedly stated how he does not want his company to simply be about money. He prioritizes the values and beliefs that his company stands for because for him, it is about humanity. He believes that the culture of Starbucks is far more important than the revenue it makes, which makes what he does, worth it.
“It’s the humanity of a company that is going to create the long term value. Without humanity and without values, you end up with a company that perhaps makes money, but doesn’t stand for anything and really has nothing to be proud of. So, lead with your heart.”
This message has pulled the heart strings of many, encouraging them to invest in a company with great core values. So you may be able to assume, that those who buy Starbucks may not just want to fit in, but genuinely believe that this company is good. In my opinion, you might not find a die hard Trump supporter at your local Starbucks. However, some may be inclined to spend money there just to “stick it to the man.” Starbucks even has a story section on their website for updating the public on their efforts to combat racism. This gives people the idea that Starbucks is inclusive which allows people of all races to feel like they belong. So, while Starbucks may represent class status, it also represents the customers political beliefs and values. The culture of this company wants to be diverse and accepting of everyone, which is most likely what consumers are more okay with putting their money towards.
With this being said, who is Starbucks trying to target? Well, if you look at the placement of these establishments, you will see that they are placed in highly populated areas. However, 83% of Starbucks establishments are in predominately white areas.These are usually surrounded by big cities, suburban areas, and areas where middle-high income individuals live. While many describe the target audience of Starbucks as those who are in a higher tax bracket, it is actually marketed to those who are more middle class, because they have enough money to afford it. This is also a result of people who aren’t necessarily debating the cost of a $7 drink. These are people who don’t mind treating themselves as a part of their busy lives. Soccer moms, college students, those who live in the city, and those who just have a busy on the go lifestyle make up a lot of Starbucks customers. It is quick, convenient and tasty to hop in a Starbucks drive thru. So why Starbucks when you can have Dunkin’? Well, that relates back to what Starbucks stands for and the vibe it gives off. Starbucks markets themselves to specifically the younger crowd, especially with social media playing such a big role. College students are especially profitable to Starbucks, as they are able to sit down and enjoy a drink while using the establishments WiFi to get work done.
Let’s look at the difference in interior design when it comes to Dunkin’ Donuts and Starbucks. The inside of a Dunkin’ Donuts is vibrant and loud. Looking at this, it is not the ideal place to work on your essay or read your book for class. Starbucks interior design is comfortable and dim but not too dull. The look is aesthetically pleasing, making for a great work space for those doing school work or job related work. Starbucks offers couches and cushions for comfortable seating, while Dunkin’ is more of a sit down and chat type of establishment. Overall, many workers and college students are being marketed to because of the availability to do work in comfort, while holding your favorite drink.
The Starbucks interior gives off cool neutral colors through the dark wood and black leather seats. The dim but efficiently lighted room gives the area just the right amount of brightness to get work done. The colors are non distracting and aesthetically pleasing, which offers a soothing, productive environment for students and workers alike.
The Dunkin’ Donuts interior is vibrant with orange, pink, and yellow colors. The atmosphere may not be soothing and aesthetically pleasing, but it does give that “wake up!” vibe. The chairs are unlike Starbucks as they are all metal with not much room to work on your laptop. This establishment is meant more for a pick me up or a coffee date with a friend.
With all this considered, I think the answer to the initial question is pretty complex. Starbucks is more than just a coffee shop for some as we can see here. Some view it as a way to look cool, others see it as a great way to spend money, while some use it to hold their social status at the top tier. Whichever way you look at it, each individual has their own reasons for purchasing such expensive beverages. However after doing my research some new questions came to mind. If Starbucks is truly trying to use their business for pure humanity rather than money, why don’t they market to more racially diverse neighborhoods? Most establishments are placed near the “american dream home” areas, or the suburban white picket fence homes. If Starbucks is on a mission to be more culturally aware then why not market to a more diverse audience? Caucasians make up the majority of Starbucks consumers, with there being a quite mediocre percentage of other races. I respect Starbucks for their efforts to become more culturally aware in areas such as bias training, supporting minorities, and aiming to help those who need it, but can more be done? I think that Starbucks could start taking more initiative to bring their business to more racially diverse areas rather than their typical white areas. This could really support their statement and the company culture they want to express to us.
Overall, I think that society has had a great influence on what brands represent when it comes to social status. Many have shown that establishments such as Starbucks create a sense of belonging and confidence. The coffee not only feeds the people but feeds their egos, as many use this green and white logo as a symbol for, “I have money.” Others use this logo as a way of saying I am accepted, I am comfortable, I belong here. This gives these individuals power and a comfort that is hard to really put into words. Lastly, some want to ensure they are investing into companies they believe are doing good. As political views have been quite tense over the last four years, it has really brought out the morals these big companies have set in place. Although Starbucks has had some questionable instances, they have made sure to shed light on what their brand really means. It seems reaching to make so much out of a paper cup, but it truly holds the power to show who you are as an individual.
Citations
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