After former Starbucks CEO Howard Schultz announced Sunday that he is seriously weighing an independent run for president, a backlash erupted lamenting the effect his campaign could have on the outcome of the 2020 race. “Vanity projects that help destroy democracy are disgusting,” tweeted Neera Tanden, president of the Center for American Progress and a former aide to President Obama and Hillary Clinton, saying she’d boycott the brand if he ran.
It would mean a billionaire candidate whose name is nearly synonymous with one of the world’s most well-known consumer brands. But what ultimate effect would a run have on the image of the company he built?
It’s hard to know because it’s virtually unprecedented. Hired chief executives of big brands (former Hewlett-Packard CEO Carly Fiorina) have run for president. Business owners (Ross Perot, Donald Trump) have run or even won. But the harsh scrutiny and divisive rhetoric that a presidential campaign could unload on a publicly traded global consumer brand is uncharted territory, and may find its first test in the candidacy of Howard Schultz.
“What makes this different is that Starbucks is, if not the most important, at least one of the most recognizable consumer brands around the globe,” said Aaron Chatterji, a professor at Duke University’s Fuqua School of Business who has studied CEO activism. “That’s very different, even compared to Trump, in terms of the Starbucks brand’s penetration all across America.”
Schultz built Starbucks from a small Pacific Northwest coffee chain into the caffeine juggernaut it is today. He remains one of the company’s biggest shareholders -- though he retired last year, when he left open the possibility he’d run for public office. Long before that, as the billionaire coffee magnate sounded notes about civility and unity, co-authored books about veterans and citizenship or called for a boycott of campaign contributions until politicians reached a debt solution, questions have swirled over whether he’d mount a presidential bid.
But Sunday’s announcement added a new wrinkle -- Schultz, who has long been associated with progressive causes, said he was considering a run as an independent candidate, not as a Democrat -- and offered a first glimpse at how people would respond.
It wasn’t pretty.
A number of Democrats trounced the idea, calling it a “rich man’s fantasy” and an easy route to victory for Trump’s reelection. Calls for a boycott of Starbucks abounded on social media. To some, the news was a punch line: “Schultz would just open up too many campaign offices, some right across the street from one another,” quipped one Twitter user.
An email to a spokeswoman in Schultz’s office was not immediately returned.
In a statement to employees posted on Starbucks’s website, current chief executive Kevin Johnson said that “as a company, we don’t get involved in national political campaigns. And nothing changes for Starbucks.” He added that “as Starbucks partners, we have a responsibility to always recognize and respect the diversity of perspectives of all customers and partners on these topics.”
Experts on brand reputation were divided on how much risk Starbucks actually faces. Schultz’s leadership of the company is almost certain to come under greater scrutiny, questions about his motivation for running could get intermingled with Starbucks' image, and its outsize reputation as a progressive employer could suffer bruises if stories were to emerge from disgruntled employees who get a bigger platform to air any grievances.
Any company that attracts the “otherworldly” scrutiny of a presidential campaign is bound to face questions about decisions that looked good to investors but not necessarily the voting public, said Bruce Haynes, vice chair of Sard Verbinnen’s public affairs office in Washington.
“There are no perfect candidates, and there are no perfect businesses," he said.
While Starbucks is known for offering benefits to baristas like health care, “bean stock” and online college tuition benefits, it has also been scrutinized in the past for scheduling irregularities it has promised to fix and for run-ins with efforts to unionize.
“People will be looking for stories of employees or shareholders who’ve had bad experiences and be more than happy to create platforms to tell their stories to achieve their own political objectives," Haynes said.
He added “that’s the position that Starbucks finds itself in -- they’re a bigger, broader target because of their success.”
Still, he said, at this point, the risk may be limited. Starbucks has “developed this reputation with good reason, and if you’re a Kamala Harris or an Elizabeth Warren and you want to dismiss Howard Schultz for not doing enough for working men and women, you’d better bring a very good case because people perceive them to be a leader,” Haynes said.
Others said the kind of immediate calls for boycotts and pushback from Democrats may not translate into real purchasing changes in most consumers' behavior. Research has shown that while the threat of a boycott can be powerful, and draw national media attention that uncovers problems, they don’t often change customers' buying patterns.
“Political strategy differences are not what people get outraged about,” said Anthony Johndrow, CEO of Reputation Economy Advisers in New York. “To get really serious about changing your buying behavior, you’ve got to do something that really bothers me," he said, noting that the “vanilla latte” centrist language Schultz is using is “inherently not offensive” and it’s too soon to know not only whether he will run, but whether he would remain a candidate until the 2020 election.
Carreen Winters, chief reputation strategist for the public relations firm MWW, said that while Schultz’s Starbucks tenure is likely to get outsize scrutiny because he doesn’t have a political record to run on, the company could actually come out ahead.
Because he’s no longer CEO, “everything they look at will be historical. If it’s something positive, Starbucks will get credit, and if it’s not positive, it’s in the rear-view mirror." She pointed to how Bill Gates has been able to carve out a post-CEO career as a philanthropist where every Gates Foundation decision is not considered through the lens of Microsoft.
And what if Schultz falls flat as a candidate? Could low polling numbers or a poor debate performance rub off on the Starbucks brand? Experts said voters are likely able to separate the two -- and that while Schultz may have plenty of name recognition, he doesn’t inspire the same kind of following as, say, Martha Stewart or Oprah Winfrey did with their brands.
Said Paul Argenti, a professor at Dartmouth’s Tuck School of Business who studies corporate communication: “People don’t go to Starbucks because of Howard Schultz.”