Starbucks Hopes 15 New Stores Will Make It Part Of The 'DNA' Of Low-Income Communities Of Color

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After the August 2014 shooting death of Michael Brown, an 18-year-old black teenager, by a white police officer in Ferguson, Missouri, Starbucks brass made a trip to neighboring St. Louis. Following a summit with more than 100 local employees, called partners, Brooklyn-born CEO Howard Schultz took a ride with Rodney Hines, Starbucks’ Director of Community Investments for U.S. Retail
Operations down Florissant Avenue, the commercial street in Ferguson which had been the site of protests after Brown’s death. Most businesses had either left or been forced to close.
“We are absent from this community,” Hines recalls Schultz saying, adding that the two men quickly agreed Starbucks had a responsibility to be not only in, but of communities of color. Hines is helming an initiative to open 15 new shops in low to middle-income communities, with spaces built by local contractors, baked goods provided by companies owned exclusively by women and minorities, and young employees from within a 5-mile radius. The stores are meant to be a key cog in Starbucks’ mission to hire 10,000 Opportunity Youth, residents between 16 and 24 facing systemic barriers to meaningful employment and education while boosting local economies, which was announced in 2015.

In Ferguson, Hines saw ”a community determined” to solicit and eventually deliver social change. Using its scale and resources, he felt Starbucks would be an effective accelerator of the recovery process he saw in Ferguson. Local nonprofit groups will be provided a dedicated space in each of the 15 locations to train, inform, meet, and hold events and workshops. Hines wants to make Starbucks “a part of the community DNA, and together with the community, create positive change.”
In November of 2015, the company broke ground on a store in Ferguson, on Florissant Avenue. It hired nearly two dozen local young people and selected a local food vendor Natalie’s Cakes and More, owned by a black woman and staffed by local teenagers, which now serves more than three dozen US Starbucks. Ferguson’s location, which was built out by a local contractor, illustrates the goal of the initiative: local product, staff, labor, and community activism are at the heart of the store’s day-to-day operations.

“When you partner with [a local vendor],” Hines said, “you’re spurring economic development and helping local businesses. The partners now have access to Starbucks benefits including the College Achievement Plan, to be able to start or finish their continued education”


Selecting sites has been equal parts art and science. Starbucks analyzed demographics and gathered insights from community leaders., the company sought out communities with a groundswell of community work addressing economic development and empowerment for its young residents. They sought to partner with, not work for, the community at large.
Ferguson’s location opened April 29th of this year. While Starbucks does not release performance numbers for specific sites, Starbucks representative Alisha Damodaran said Queens and Ferguson locations are “exceeding expectations and validating the initiative as we continue to ramp up in other communities.” The average Starbucks brings in an average of $1.2 million in annual sales. The prices, name, branding, training, and benefits will remain identical to any other Starbucks location. Only the layout will change, as each shop will feature space dedicated to nonprofit and community events.
Starbucks, which says its new stores in Queens, NY, Phoenix, and Chicago are all “thriving,” has picked locations that are being revitalized. The new shop in Chicago’s predominantly black Englewood neighborhood has provided 26 new jobs, and is in a shopping center which includes a Whole Foods and a Chipotle. It is also blocks away from a newly-renovated public transit stop. The new Queens store is flanked by a grocer, two subway and commuter train stops, and a civil courthouse. Ferguson’s location sits a stone’s throw from a shopping center. A future Baltimore unit will be a part of a development project anchored by Johns Hopkins Hospital, which will include a 168,000-square-foot laboratory and office building.

Hines says Starbucks measures the stores’ success by their ability “to make money while creating local jobs and enriching local businesses and nonprofits.” Damodaran added that Starbucks will “measure success by how the store is performing financially as well as how it is contributing to local economic development through job creation.”We look for engagement with local women and minority-owned vendors and suppliers, and collaboration with like-minded local nonprofits to support in-store training opportunities. It’s not just about the bottom line, but how the store is uniquely engaging with and supporting the community.”
Starbucks’ new Queens location, on Sutphin Boulevard, is near the heart of the Jamaica neighborhood, which has a median family income nearly $8,000 lower than the national average. ACS data, which is compiled from ongoing national survey information to determine the distribution of federal and state funds, states that from 2009-2013, 38 percent of its residents were Hispanic, with Black residents making up just less than a fifth of its population. A third of its population over 25 between those years were without high school diplomas.


Starbucks cups are shown in a cafe in North Andover, Mass. (AP Photo/Elise Amendola, File)
Brooklyn-born Crystal Randolph works across the street at the Queens County courthouse. A gold card member, she belongs to the brand’s most loyal tier of customers. Before Starbucks came to town she saw the space it now occupies and reached out to Starbucks to woo them to Jamaica. Glenn Greenidge, a Jamaica resident and executive director of the Sutphin Boulevard Business Improvement District, is a loyal customer also. A community board member, he and his colleagues started reaching out to Starbucks in 2010.

“We were lobbying and sending them census information about the area’s income,” he recounts. After years of wooing, Starbucks came. Excitement from businesses and consumers alike was palpable. “Starbucks is a leading indicator of a community that’s about to change for the positive,” Greenidge said. The storefront has ignited conversations around economic development, community-building, and sit-down restaurants.
Ric Rivera, President of Ideal Interiors, the Sutphin shop’s general contractor, is from the Bronx and grew up in a neighborhood very similar to Jamaica. Ideal doesn’t usually work in Queens, but the excitement of breaking ground in a neighborhood reminiscent of the one he was raised in, and the opportunity to include a space for community programs were enough to convince Rivera to bid for the job,  He hired local subcontractors and workers when he won the bid over four other companies.

The project has bolstered his relationships with local subcontractors and allowed both Ideal and his subcontractors to add to staff. Rivera currently employs more than 20. “The community work they wanted to do, it’s in my blood,” Rivera said. “I’m a guy who grew up like that, went through public schools and the system, I’ve seen all of that.”
According to store managers, baristas, and Hines, it has helped that many of their most loyal customers from the areas immediately surrounding the new shops are gold card holders themselves.
“When there’s that much enthusiasm to build a better future,” Hines said, “we know that we can thrive.”

For 26-year-old barista Fernando Stewart, Starbucks in his area was unimaginable. “I’m not gonna lie to you,” he said, with a wide grin, “when I heard they were putting a Starbucks in Southside Jamiaca Queens, I thought it was a joke.” But he quickly saw the logic. “This neighborhood is busy,” he said. Together, the rail lines bring in an estimated 500,000 travelers per day. “[It] was a wonderful idea to put a Starbucks over here,” he continued, “even though the neighborhood is a little rough.”
Months ago, Stewart fell on hard financial times and lost his home. He received a grant from the company’s Cup Fund, a fund for partners in need of immediate financial assistance, and was able to find housing and stability. His managers have gone a step further, checking in with Stewart frequently and helping the barista along the way.

Store manager Alisha Wrencher has been a Starbucks partner for 18 years. From her first stint on 78th and Lexington as a barista, Starbucks has become a second home. She’s taken thousands of orders, dealt with thousands of frustrated customers, and seen nearly a half-dozen promotions “We’ve changed the perception of who we are as African Americans,” said Wrencher  She says The Sutphin location has given the Starbucks partners their first positive interaction with members of other communities, including police. “It’s a totally different world outside the store,” she says adding that the location has  “given [partners] a chance to build relationships with other cultures, and let other cultures build relationships with some of us.”

“We’re serving a purpose here,” she said with tears in her eyes. “Some of the things that these partners are going through, you would never believe because they come here every day and they’re dealing with a lot of personal issues and they’ve managed to capture an audience of people. They don’t understand how important they are; I think they’re just now realizing it.”

source - forbes.com
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