Your local indie coffee shop may be a Stealth Starbucks

A Starbucks in disguise: Seattle's 15th Avenue Coffe & Tea in 2009. Image: Getty/AFP

Coffee giant Starbucks is always looking for new ways to tighten its grip on the coffee market. Last year, to take one example, it launched “Starbucks Reserve®”,  a new line of Starbucks outlets finely tuned to corner the market of coffee drinkers looking for a more high-end experience.

Of course, there’s one subset of coffee drinkers the firm has yet to conquer: those who refuse to get their coffee from big coffee chains like Starbucks. But they’ve got a plan for that too: the Stealth Starbucks.

Stealth Starbucks actually have a considerable history. The first one opened in 2009 in Starbucks’s traditional stomping grounds, Seattle. The new store was named “15th Ave Coffee & Tea”, but the front door featured a telling disclaimer: “inspired by Starbucks”. In the years since, Starbucks has opened two more stealth locations in the city.

Word got out about these Stealth Starbucks, and though some reacted positively to them, others lashed out. Independent coffee shop owners were naturally displeased with the thought of a giant chain camouflaging itself and possibly siphoning off their business. As far away as Chicago, a local coffee shop owner called Stealth Starbucks “the equivalent of unmarked cars”.

But Starbucks’s CEO, Howard Schultz, has maintained that these outfits were never intended to dupe indie-loving coffee customers. “It wasn't so much that we were trying to hide the brand,” he said in a 2010 interview with Marketing Magazine. “[We were] trying to do things in those stores that we did not feel were appropriate for Starbucks.”

Whatever the motivation, the project nevertheless did well enough that the company’s higher-ups decided to take the project on the road, from sleepless Seattle to another city that never sleeps. In 2012, the chain opened its first stealth Starbucks in New York, inside a Macys department store.

There are hints that there might be more. Veteran barista Molly Osberg feels that New York City’s unique love of independent coffee shops may be behind Starbucks’s move. “Almost 60 percent of New York coffee shops weren’t associated with a corporation,” she wrote in a recent article in The Awl. “The trend is so pervasive that Starbucks itself opened its own unbranded coffee shops, sans the company’s own name.” 

In the midst of the continuing hubbub over Stealth Starbucks, the fundamental question still remains: why is Starbucks doing this? Aren’t they making enough money already as the world’s biggest coffee chain? Is their motive really, as their CEO says, to serve as a “laboratory” for new products and ideas?


The answer may actually be yes, though for much more cynical reasons than any Starbucks rep would care to admit. Mike Hudson is the founder of the independent coffee chain Handsome Coffee, which was later acquired by Blue Bottle Coffee. He thinks that these stores are effectively a mechanism for Starbucks to test out which ideas it’s going to steal from potential competitors.

“Given Starbucks’s market position, it could fall prey to a competitor with innovative ideas,” Hudson says. “The stealth outlets are a grossly patronising move by Starbucks to stay current. But they’re also a legitimate attempt to make better coffee, in the event America decides that Starbucks’s mass product offering is inferior to ‘the new thing’.”

While marketing calculus and experimentation may be the prime motivator in the creation of Stealth Starbucks, the outlets are still intended to turn a profit – and in that sense it’s significant that the mega-chain opted to open them exclusively in Seattle and New York. Despite the standardisation of consumer preferences worldwide after decades of omnipresent brand-based marketing, local preferences can still vary widely. These two cities, the move suggests, are the places Starbucks feels must be hungriest for some kind of change.

But ultimately, the most significant development to emerge from the Stealth Starbucks program may be its influence on the strategies employed on the Starbucks Reserve outlets. A New York Times article from last December confirms that the outlet’s logo, which abandons the traditional Starbucks “mermaid” seal, is a deliberate attempt to distance the Reserve locations from the standard Starbucks brand.

Starbucks plans to open roughly 100 outlets under the “Starbucks Reserve” branding scheme, far more than the four Stealth Starbucks outlets it currently operates. But those stealth Starbucks are still going strong, and there are no plans to close them in the near future. That Starbucks has made such inroads into the anti-Starbucks market is, in a way, a testament to quite how sophisticated modern marketing has become. 

 
 
 
 

What does the fate of Detroit tell us about the future of Silicon Valley?

Detroit, 2008. Image: Getty.

There was a time when California’s Santa Clara Valley, bucolic home to orchards and vineyards, was known as “the valley of heart’s delight”. The same area was later dubbed “Silicon Valley,” shorthand for the high-tech combination of creativity, capital and California cool. However, a backlash is now well underway – even from the loyal gadget-reviewing press. Silicon Valley increasingly conjures something very different: exploitation, excess, and elitist detachment.

Today there are 23 active Superfund toxic waste cleanup sites in Santa Clara County, California. Its culture is equally unhealthy: Think of the Gamergate misogynist harassment campaigns, the entitled “tech bros” and rampant sexism and racism in Silicon Valley firms. These same companies demean the online public with privacy breaches and unauthorised sharing of users’ data. Thanks to the companies’ influences, it’s extremely expensive to live in the area. And transportation is so clogged that there are special buses bringing tech-sector workers to and from their jobs. Some critics even perceive threats to democracy itself.

In a word, Silicon Valley has become toxic.

Silicon Valley’s rise is well documented, but the backlash against its distinctive culture and unscrupulous corporations hints at an imminent twist in its fate. As historians of technology and industry, we find it helpful to step back from the breathless champions and critics of Silicon Valley and think about the long term. The rise and fall of another American economic powerhouse – Detroit – can help explain how regional reputations change over time.

The rise and fall of Detroit

The city of Detroit became a famous node of industrial capitalism thanks to the pioneers of the automotive age. Men such as Henry Ford, Horace and John Dodge, and William Durant cultivated Detroit’s image as a centre of technical novelty in the early 20th century.

The very name “Detroit” soon became a metonym for the industrial might of the American automotive industry and the source of American military power. General Motors president Charles E. Wilson’s remark that, “For years I thought what was good for our country was good for General Motors, and vice versa,” was an arrogant but accurate account of Detroit’s place at the heart of American prosperity and global leadership.

The public’s view changed after the 1950s. The auto industry’s leading firms slid into bloated bureaucratic rigidity and lost ground to foreign competitors. By the 1980s, Detroit was the image of blown-out, depopulated post-industrialism.

In retrospect – and perhaps as a cautionary tale for Silicon Valley – the moral decline of Detroit’s elite was evident long before its economic decline. Henry Ford became famous in the pre-war era for the cars and trucks that carried his name, but he was also an anti-Semite, proto-fascist and notorious enemy of organised labor. Detroit also was the source of defective and deadly products that Ralph Nader criticized in 1965 as “unsafe at any speed”. Residents of the region now bear the costs of its amoral industrial past, beset with high unemployment and poisonous drinking water.


A new chapter for Silicon Valley

If the story of Detroit can be simplified as industrial prowess and national prestige, followed by moral and economic decay, what does that say about Silicon Valley? The term “Silicon Valley” first appeared in print in the early 1970s and gained widespread use throughout the decade. It combined both place and activity. The Santa Clara Valley, a relatively small area south of the San Francisco Bay, home to San Jose and a few other small cities, was the base for a computing revolution based on silicon chips. Companies and workers flocked to the Bay Area, seeking a pleasant climate, beautiful surroundings and affordable land.

By the 1980s, venture capitalists and companies in the Valley had mastered the silicon arts and were getting filthy, stinking rich. This was when “Silicon Valley” became shorthand for an industrial cluster where universities, entrepreneurs and capital markets fuelled technology-based economic development. Journalists fawned over successful companies like Intel, Cisco and Google, and analysts filled shelves with books and reports about how other regions could become the “next Silicon Valley”.

Many concluded that its culture set it apart. Boosters and publications like Wired magazine celebrated the combination of the Bay Area hippie legacy with the libertarian individualism embodied by the late Grateful Dead lyricist John Perry Barlow. The libertarian myth masked some crucial elements of Silicon Valley’s success – especially public funds dispersed through the U.S. Defense Department and Stanford University.

The ConversationIn retrospect, perhaps that ever-expanding gap between Californian dreams and American realities led to the undoing of Silicon Valley. Its detachment from the lives and concerns of ordinary Americans can be seen today in the unhinged Twitter rants of automaker Elon Musk, the extreme politics of PayPal co-founder Peter Thiel, and the fatuous dreams of immortality of Google’s vitamin-popping director of engineering, Ray Kurzweil. Silicon Valley’s moral decline has never been clearer, and it now struggles to survive the toxic mess it has created.

Andrew L. Russell, Dean, College of Arts & Sciences; Professor of History, SUNY Polytechnic Institute and Lee Vinsel, Assistant Professor of Science and Technology Studies, Virginia Tech.

This article was originally published on The Conversation. Read the original article.