Gul 2014 veronica saron paper

Coffee Commerce, Culture and Consumption in the Globalizing Era Veronica R Saron 4/8/2014

Starbucks (right) on Istiklal Avenue in Istanbul.

Created for Global Urban Lab Rice University: School of Social Sciences & Kinder Institute for Urban Research

Executive Summary This study answers whether or not independently owned coffee shops can co-exist with corporate chains in the same business environment, particularly in the face of cultural factors. To address this issue, we will examine the independent-versus-chain-store dynamic in two countries: the United States, the global seat of capitalism where over 50% of the adult population awakens to a cup of coffee, and Istanbul, where coffee preparation, service, and consumption are steeped in traditions hundreds of years old. While in the United States coffee consumption serves a functional purpose (i.e. caffeinating before or during work), coffee culture in Turkey fuels the human enjoyment of life. Ultimately, this study finds that the two types of businesses in the coffee world - independent and corporate - not only complement each other, but augment each other as well. Coffee shop businesses in both the United States and Turkey serve as a metaphor for how globalization and modern capitalism can indeed co-exist with tradition and small business entrepreneurship exhibited by locally-owned stores.

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Table of Contents Executive Summary....................................................................................................................................... 1 Table of Contents .......................................................................................................................................... 2 Report ........................................................................................................................................................... 3 The Issue ................................................................................................................................................... 3 Research Methodology ............................................................................................................................. 4 Findings ..................................................................................................................................................... 4 Coffee’s Context and a Brief History ..................................................................................................... 4 Defining American Coffee Culture ........................................................................................................ 5 American Coffee Chains ........................................................................................................................ 7 Distinguishing Local American Coffee Shops ........................................................................................ 8 The USA: Local Coffee Market vs. Corporate Coffee Market ............................................................... 9 Globalizing Starbucks Wrestles with Traditional Turkish Coffee Culture ........................................... 10 Turkey: Local Coffee Market vs. Corporate Coffee Market ................................................................ 11 Conclusions and Implications.................................................................................................................. 13 Works Cited ................................................................................................................................................. 14 Appendix ..................................................................................................................................................... 16 Acknowledgments....................................................................................................................................... 18

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Report The Issue Stroll into a Turkish coffee shop and you will find Turks reclining in chairs, sipping coffee and glancing through newspapers after a long day of work. Young Turks may be chatting quietly about their weekend as a waiter brings them Turkish delight, baklava, or pudding with their drinks. Of course, you are also bound to observe Turks smoking cigarettes or even hookah, without anyone complaining of the smoke and stopping their leisurely activities. Half a world away in an American coffee shop, such an atmosphere is improbable. In the United States, you are more likely to see patrons typing away on laptops. Sleep-deprived students purchase sugary lattes from the counter, and maybe young professionals sit together to discuss projects for the local community.

In the modern era, when life moves faster than ever before, we live in a world fueled by caffeine. Coffee’s importance in our global modern life cannot be understated; value-wise, coffee is the second most traded commodity after oil (“What Are the Most Commonly Traded Commodities”). As global connectivity grows, the capacity for multinational businesses to infiltrate life abroad has expanded and allowed for incredible cultural exchange. For the most part, these businesses tend to be American, a culture in which capitalism reigns supreme. In fact, the busy students and professionals who so often frequent the local Starbucks represent the capitalistic company that they pay for coffee, which fuels their ambition and work ethic.

With multinational corporations enacting such cultural infiltration abroad, many are concerned worldwide as to how globalization will affect local and regional culture. Can the beautifully peaceful coffee shop of Istanbul survive in a world where capitalism appears to threaten their very existence?

My answer is yes, absolutely. The issue of cultural preservation in the face of capitalism has been tackled in innumerable modern analyses, including by acclaimed political science author Thomas Friedman whose book The Lexus and the Olive Tree explores this challenge of finding a “healthy balance between preserving a sense of identity… and doing what it takes to survive within the globalization system” (Friedman 42). This paper will argue that in the world of coffee, small locally owned businesses and global behemoths like Starbucks not only serve different markets and different needs, but each type of business has its own supreme advantages over the other, allowing for Friedman’s healthy balance in the business ecosystem of globalization.

In exploring the balance between locally-owned and corporate-owned coffee shops, we will establish several dynamics. We will first compare and contrast coffeehouse culture for the two types of businesses independently within two cities: Houston, a contemporary American city of diversity and commerce, and Istanbul, a city spanning Europe and Asia where heritage 3|Page

meets modernity on every street corner. After establishing coffee culture within each society, we will examine how Starbucks used that knowledge of culture as a prominent, modern corporation to successfully expand their business into Turkey without disturbing the already present equilibrium of locally owned Turkish coffee shops. As we will see, such realities of global capitalism and local businesses can co-exist in two of today’s most diverse and globally impactful cities.

Research Methodology To answer my research question, it was crucial to paint a picture of coffee culture in Houston and Istanbul. I first researched coffee’s background in history and business before exploring what comprised the coffee landscape in the two cities. To substantiate this initial research, I conducted ethnographic observation and interviews in both cities. Finally, I synthesized my findings in this study.

As the first step of my research process, I considered background information from books and online resources about coffee’s significance throughout history and in various geographic locales. I also used these resources to determine modern realities in coffee culture, including general cultural norms surrounding coffee and the business dynamic between local and corporate coffee shops. At times, this research required quantitative data. Finding reliable and available quantitative data proved challenging and at times out of the scope of this study’s capabilities. Most relevant, accurate quantitative data is either unavailable (i.e. sales of coffee in the city of Houston from independent coffee shops) or expensive to secure (i.e. large scale, corporate, statistical market research in Turkey and the United States). Despite this difficulty, I was able to secure numbers on coffee industry trends on an as-needed basis.

My initial research provided a solid basis upon which I could draw before making the journey to Istanbul, where I engaged in ethnographic research at coffee houses and coffeeserving cafes in the city. This involved observing patrons, employees, marketing material, and customer experience and flow within the establishments. In Istanbul, I was also able to conduct interviews with Turkish experts in the coffee business as well as Turkish consumers. Upon my return to Houston, I performed similar qualitative research (ethnographic research and interviews) in order to establish a baseline for American coffee culture in a major American city.

Findings Coffee’s Context and a Brief History In order to determine the future of traditional and local coffee culture in a globalizing era, we must first cultivate understanding of the history of coffee and how its importance has morphed over the course of several centuries. Appropriately enough, coffee finds its origins in the Ottoman Empire, the seeds of modern day Turkey. Coffee was originally consumed in the 4|Page

1400s by Sufis living in Yemen, and the drink quickly spread throughout the Arabian Peninsula (Ellis 14). After this area was absorbed into the Ottoman Empire in the early 1500s, soldiers transported coffee seeds as they moved into Turkey proper and ultimately into Istanbul.

Coffee consumption spread westward as the Ottoman Sultans capitalized upon coffee’s popularity as a means of trade and diplomacy (Göyman). Traveling Turkish businessmen and soldiers opened coffee shops across the empire and beyond during the 16th and 17th centuries in order to spread the Sultan’s goodwill to other nations while bringing in revenue for the Turkish coffee monopoly (Pendergrast 7). Even when the Ottomans attempted to take over Vienna, the captured soldiers opened up coffee shops in the city, much to the delight of locals (Göyman). The drink was a popular novelty because of its sobering effects - after all, most of Europe had subsisted on some form of alcohol for most of their lives. Even upon waking, most of Europe would consume a “small beer” or wine diluted with whatever safe water could be found (Standage 135). As a result, most awoke to a slight haze that continued throughout the day. With a jolt of caffeine more powerful than tea, coffee was unlike any other drink experienced by the early modern Europeans who had indeed been slightly imbibed their entire lives (Ibid 137). Coffeeshops evolved into information hubs for the great minds of politics, science, and philosophy (Ibid 151).

Just as coffee provided a medium for developing culture in early modern Europe, coffee continued to do so as history moved into the modern era. In the late 19th century, coffeehouses came to the United States via Italian and other European immigrants who opened shops in city environments like New York City’s Lower East Side (Pendergast 240). As an emphasis on privacy and home life emerged in pop culture throughout the 20th century, coffee consumption expanded from the old-style coffee shop into American homes. Coffee shops sold fresh beans for home grinding, while companies like Folgers spurred trends in coffee consumption by selling ground coffee directly to consumers. In spite of the option to brew one’s own coffee, during the 70s, hippies and counter-culture youths became the patrons of new independent coffeehouses. As the advent of coffeehouses became trendy among consumers, modern corporate coffee shops Starbucks and Peet’s Coffee began to take root during the 80s and 90s. With the advent of coffee shops established, it was time for corporate chain and local coffee shops to play their parts in developing American coffee culture.

Defining American Coffee Culture The United States comprises the single largest coffee consuming market in the world ("Coffee Facts & Statistics"). It is then of no surprise that coffee shops in the United States are bustling environments, privately owned public places that blur the line between social gathering place and work locale. For the most part, even though a stress on quality coffee does exist in connoisseur circles, consumers in the United States seek functionality from their coffee5|Page

drinking experiences: either coffee provides customers with caffeine during or before work, or the event of drinking coffee presents an excuse for consumers to get together.

Much of the impetus for spending time in a coffee house in the United States incorporates another primary function beyond active, purposeful socializing: getting work done.

Whether a chain-owned Starbucks or a locally-owned establishment, many coffee shops serve as excellent locations to work. Coffee shops typically offer plenty of table space, free Wi-Fi, and of course caffeinated beverages to fuel patrons, who range from students with textbooks and gadgets to business folk brandishing financial statements and taking phone calls. In particular, small business owners and entrepreneurs (affectionately referred to as “coffeehouse commuters” by Mashable Media) find that they can work on their laptops at coffee shops during early stages of business when dedicated office space is unnecessary, unrealistic, or too costly (Swallow). Having a “desk” in public with coffee in easy access can be refreshing, and working in a dynamic location can be helpful for sparking creativity. However, if one is not planning to stay and get work done at a coffee shop, both corporate-owned and local coffee shops serve as prime locations to fuel up on quality coffee and/or quick caffeine prior to heading to the office.

When one is not using a coffee shop for its free Wi-Fi to get work done, coffee shops serve as designated meeting places for active networking or socializing with friends and coworkers over coffee. Usually centrally located, coffee shops tend to be easy locations to find in a city or town. Coffee shops’ bustling atmospheres of patrons purchasing coffee and working at tables provides an energetic environment for conversation, especially if the coffee shop is in a busy area of town. “Meeting up for coffee” for an hour or two is a common American social norm, whether for professional or social purposes.

Between the meetings that occur in a coffee shop and patrons rushing in and out for their caffeine fixes, the spaces can become rather loud. Baristas call out drink orders; when local musicians are not playing, radio commonly plays over sound systems in shops; friends, coworkers, and networking professionals laugh in excited conversation. It is no wonder that coffee shops are, indeed, popular places to hang out and work in modern American culture.

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American Coffee Chains In his 2002 Comedy Central feature, acclaimed comedian Lewis Black sarcastically revealed to his audience that he knew where the end of the universe was: on the corner of South Shepherd Street and West Gray Avenue in Houston, Texas, where one Starbucks sits across the street from another Starbucks.

“And that my friends,” he remarks, “is the end of the universe!”

Figure 1: At the location Black refers to, there are now actually three Starbucks stores across from each other.

Starbucks is perhaps the most eminent and well-marketed coffee behemoth in the world, which is why I am using the company’s decisions as the model for global practices among chain coffee brands. With over 18,000 stores in 64 countries, Starbucks is truly omnipresent in American culture, and for good reason (Starbucks Corporation 2013). Starbucks’ corporate office is strategic with where they place their stores in order to purposefully achieve a sense of ubiquity with the public while also meeting the American expectation of convenience for consumers (Arslantürk).

According to Kılıç Arslantürk, Starbucks’ previous country manager for Turkey, all Starbucks stores fall into one of two categories: primary and secondary. Primary stores are located in en-vogue locations, and as such have high visibility with customers. They include stores at high traffic train stations in major cities or on main streets near tourist attractions.

Using a complex algorithm that incorporates human walking patterns, transportation, and market research, Starbucks pinpoints the most popular and frequented locales in municipalities to open primary stores (Arslantürk). However, primary stores are in such popular locations that often the fixed cost of high rent eats into profit margins (Arslantürk).

While primary stores provide a means for Starbucks to achieve seeming ubiquity with consumers thereby serving as marketing, secondary stores allow Starbucks to actually make money. Taking advantage of the American attitude of functionality toward caffeine, Starbucks will place secondary stores in less trendy areas with high customer potential, like in suburban towns or along commuter paths on highways. With higher sales volumes and lower fixed rent costs, Starbucks’ secondary stores make the company’s real profits (Arslantürk). Although this revenue model is not the same in other countries due to different culture and human patterns (for example, in Turkey, which we will discuss later), Starbucks adopts the same categorization of stores for each of the 64 countries where Starbucks can be found (Gonzalez).

Starbucks’ power as a global chain allows for a highly sophisticated brand strategy that has made its coffee convenient and accessible. With their strategic store placement, Starbucks conveys the idea that loyal American Starbucks fans will never be without their customized latte. Interestingly, at the same time, Starbucks’ strategy aimed at brand ubiquity also captures 7|Page

consumers without brand loyalties (“brand-agnostic” consumers) who simply need their caffeine fix. A successful example of a capitalist brand, Starbucks has leveraged its resources such that in the eyes of American consumers, Starbucks remains the king of coffee.

Distinguishing Local American Coffee Shops Unlike homogeneous shops like those of Starbucks, local coffee shops make profits by providing higher quality drinks, more engaging service, a commitment to local culture cultivation, and maintaining highly unique ambiances. To the joy of coffee connoisseurs, over the past ten years, locally-owned coffee shops have encountered a renaissance in the rapidly growing Houston area, a fertile ground for coffee’s newest locally-owned shops and roasts.

As part of the process of crafting and brewing quality, artisan drinks, local shops specifically source coffee beans independently of large manufacturers (Daumas). In Houston, quality sourcing is easier to accomplish given the city’s port, which has direct access to coffee growing countries’ exports. As a result, Houston receives great coffee both from the Figure 2: Latte art at Southside Espresso conveys quality Western hemisphere and throughout the entire the world. Local shops in Houston also craft their own recipes, use cultivated methodologies, and operate specialized equipment (i.e. espresso makers) to create the perfect cup, latte, espresso, etc.

Having established quality drinks and a highly differentiated menu, a local shop can offer higher quality service than corporate stores. Local shops distinguish their service by employing baristas whose job descriptions go beyond simply working the register and whipping up drinks. For example, at Blacksmith, one of Houston’s most lauded local coffee shops, baristas serve their carefully crafted drinks directly to patrons at tables rather than patrons serving themselves, adding another layer of luxury to local coffee shop service. For those working at laptops, this is a comfortable service, as it means one can set up their workspace and receive their drink when ready for consumption (Daumas). Baristas also tend to be friendlier and more willing to strike up a conversation with patrons, building a community feel in local coffee shops.

Adding to local establishments’ community vibe, locally-owned coffee shops in American culture frequently serve as hubs for local arts. For example, Southside Espresso in Houston rotates out a miniature gallery for local artists looking to promote and/or sell their work. Locally-owned coffee shops also frequently host live music and “open mic” socials for local musicians, a feature which brings in more customers and revenue for the shops on peak nights (Daumas). In this sense, local coffee shops have retained similar information-hub-like functions to coffee shops of the 1600s; however, whereas the coffee shops of the 17th century served as an early modern co-working space for discussing science, politics, and philosophy, locally-owned coffee shops of the modern era provide a hub for discussing and engaging with 8|Page

the local art scenes in any given region. By taking the opportunity to showcase local art, locallyowned coffee shops incorporate creative spirit into their brands. Such colorful, artistic environments combined with providing large open tables and free Wi-Fi make local coffee shops that much more popular as locations to work or meet either personally or professionally.

The USA: Local Coffee Market vs. Corporate Coffee Market In the United States, corporate and local coffee shops can co-exist in the same business environment because they fundamentally serve different market needs. Overall, Americans seek functionality from their coffee drinking experience, but while corporate shops provide convenience for consumers, local coffee shops provide quality service and unique atmospheres.

With the knowledge that their company served a niche for convenient caffeine in the United States, Starbucks optimized store placement and method of service for customers (Daumas). In fact, using their store placement algorithm we discussed earlier, Starbucks usually slips into optimizing for commuting patterns and more frequented streets in local neighborhoods, where potential customers (mostly 18-35 year olds) tend to hang out at peak hours (Arslantürk). Starbucks then standardized the fast coffee-fetching, self-serve process in order to provide to major customers with caffeinated beverages in an efficient, customizable way. At each of Starbucks’ establishments, a consumer will line up to pay for a drink, provide a name, and then upon the drink’s completion a few minutes later, a barista will call the customer over (Ibid). Provided in to-go cups brandishing the Starbucks logo, customized drinks can either be enjoyed in the store - maybe while working on a laptop on the store’s free Wi-Fi or on the go, many times on the way to work. Starbucks mastered providing coffee convenience to American consumers.

American coffee connoisseurs are quick to distinguish caffeine enthusiasts – who will go to Starbucks for coffee out of ease and convenience – from coffee enthusiasts, the loyal consumer base for the quality services of local coffee shops. Suspicious of large corporate brands, connoisseurs in particular abhor Starbucks as the “mainstream” coffee option and argue that such convenience comes at the cost of quality and service (Daumas). Connoisseurs provide the most loyal consumer base for local shops, and as such they also provide word-ofmouth marketing for the coffee shops. In the process, connoisseurs invite many common, nonconnoisseur consumers - including counterculture youths, students, young professionals, and others - to also often choose niche, trendy coffee drinks cultivated and crafted in local shops (Daumas). Local shops often provide all the needs of modern American coffee consumers who need places to get work done: readily available quality caffeine, a comfortable ambiance with open desk space, electrical outlets, and free Wi-Fi. Combine the fact that baristas at local shops build relationships with customers by remembering names and drink orders, and even a common consumer is more likely to opt for the slightly more expensive but higher quality local 9|Page

cup of coffee rather than a Starbucks latte (Daumas).

These amenities mean that larger chain coffee shops like Starbucks are – at times – more threatened by local stores than posing a threat to them. Starbucks failing to move in on local coffee markets can be exemplified by Starbucks’ attempt to penetrate the Australian cafe market in 2000, when the corporation opened 84 stores. Eight years later, Starbucks closed 61 of them because the small independent stores reigned supreme and more popular (Bakersville).

On the other hand, in both the United States and Istanbul, local coffee shops are at times at a disadvantage against large corporate brands in terms of scalability in particular locations and markets. For example, local coffee shops cannot open and become sustainable in areas and situations where caffeine brand-agnostic consumers are in abundance and connoisseurs are less concentrated. Due to their capital resources and proprietary algorithms, coffee chains - in the case of Starbucks, its secondary stores - can open (and remain open) along interstate and intrastate highways, where stores can pick up customers from traffic patterns (Bhargava). Unlike local stores, Starbucks stores can also afford high rent locations, mostly at primary store shops. Similarly, local coffee shops would never open in large public transportation hubs, like airports, where chain stores like Starbucks reign supreme in assisting with caffeinating weary travelers and business folk in a rush (Daumas).

Globalizing Starbucks Wrestles with Traditional Turkish Coffee Culture In 1516, Sultan Selim I opened one of the very first coffee shops with a local entrepreneur in Istanbul (Göyman). As such, the coffeehouse is arguably steeped much deeper in tradition in Istanbul, Turkey, than in any other place in the world. Turkish coffee houses are traditionally like community buildings, informal social centers that usually attract an older crowd and local dwellers (Bhargava). From the method of coffee service to the typical ambiance of a coffee shop, the focus is rarely on work and mostly on relaxation and quiet, intimate socializing. Such a cultural difference made it difficult – but not impossible – for coffee giant Starbucks to penetrate the emerging Turkish market in 2003.

When Starbucks was moving to Turkey, the company had to focus on creating relaxing atmospheres in their shops. This is because the typical ambiance of a Turkish coffeehouse is quieter and less hectic in comparison to an American one. Traditionally, coffee shops are not places to work, meet and network with colleagues, and use free Wi-Fi, a utility which is already free in many public spaces other than coffee shops in Istanbul. Instead, coffee shops are explicitly a locale to be served, relax, and unwind. In creating this vibe, Starbucks needed to consider higher square footage for their shops in order to accommodate larger, more comfortable furniture for patrons to relax upon (Arslantürk).

Along with larger shops and more comfortable furniture, Starbucks had to adjust to new 10 | P a g e

coffee service cultural norms in order to secure its Turkish growth. For example, while waiting in line for one’s grab-n-go drink is considered a “convenience” in America, this process is seen as a burden in Turkey (Arslantürk). Customers had to get used to lining up, placing orders at the counter, providing their names, and receiving their drinks. This is an unfamiliar process in a traditional Turkish coffee house where coffee is brought to customers at a comfortable seat. In Europe and Istanbul, service at coffee shops is a particularity: the opportunity to be served is a courtesy and luxury in a coffeehouse. In the United States, by comparison, being served one’s drink is only a quality service offered in particular local coffee shops, and lining up to wait for one’s coffee is more of a valid expectation.

Another American coffee service norm that took time for Turks to get used to was the customization of coffee drinks like lattes and cappuccinos. In the words of Elif Welsh, the Programs Coordinator for Koç University overseeing food and beverage services, Turks find food and beverages served “the right way” particularly comforting as symbols of tradition.

For example, when served correctly, the famous traditional Turkish Figure 3: Turkish coffee served "the right way" coffee is brought to customers in a particular sized, small cup, with a small glass of mint water, and some Turkish delight, a gelatin dessert. Typically, one has this particular coffee drink after a meal, and when it is not served in this manner, the coffee drinking experience can feel awkward and incomplete to seasoned Turkish coffee consumers.

As coffee shops serve as centers of end-of-the-day relaxation in Istanbul, it is uncommon to see raucous youths chatting loudly or professionals networking and conducting business meetings over a cup of coffee as would be the case in the United States. Guests are often friends of the owners and family (Welsh). Unlike American coffee shop owners, Turkish coffee shop owners are not looking to make an extreme profit – rather, they run the shop simply to get by, make an easy living, and provide a location for the community to relax (Arslantürk). Instead of playing games online over the free Wi-Fi as American coffee shop dwellers might, Turks at traditional coffee shops enjoy playing board games and sometimes even watching television (if there is a television at the shop) while sipping their coffee, served to them at their seat, exactly the right way.

Turkey: Local Coffee Market vs. Corporate Coffee Market Like in the American business environment, local coffee shops are not threatened by Starbucks shops in Turkey because the two types of businesses serve separate market needs.

However, because coffee culture is distinct in Turkey, the country’s market needs are also different: whereas brand names in the United States convey convenience, brand names in Turkey convey trendiness and quality (Welsh). While local coffee shops fill the need for preserving traditions and classic values, Starbucks provides the Turkish market with brand 11 | P a g e

name, quality American coffee beverages.

Starbucks’ store placement was crucial in establishing its position as a trendy brand.

While strategizing expansion into Turkey, it became clear that Starbucks could not simply copy their American strategy for placing primary and secondary stores (Arslantürk). Arslantürk found that while secondary stores provide profits in the United States, most locations for secondary stores would lose money in Turkey. On side streets and even within highly frequented town environments, traditional coffee shops are dominantly Figure 4: Starbucks on Istanbul’s trendy Istiklal popular among customers. Starbucks knew it could not compete with such Boulevard shops that have existed for decades. In response to this analysis, Starbucks opened no secondary stores in Turkey and only opened primary stores. Arslantürk reasoned that trendy areas with high traffic would both bring in a high volume of customers as well as also provide the visibility that they were seeking as a brand. Starbucks also raised prices at primary stores, which had a two-fold effect: first of all, Starbucks made up for higher rent costs due to trendier (and larger) store locations. Second, with higher prices, Starbucks could now position themselves in the Turkish market as a trendy luxury brand rather than a convenient one, as would be the strategy in the United States.

In line with crafting themselves to be a luxury brand name, Starbucks initially marketed to trend-setting youths between the ages of 16-28 upon arriving in Turkey (Arslantürk).

Worldwide, this demographic is most likely to “look for attachment” in brand names, and these are the individuals whom Starbucks believed would not only catch onto American brands earliest, but would also spread the brand as a trend to other consumers (Ibid). The strategy worked: young Turks took to Starbucks sugary lattes, and older Turks began to catch onto Starbucks and its perceived quality as a self-portrayed luxury corporate brand.

To Starbucks’ benefit, the American coffee ideal of convenient to-go drinks has certainly become more relevant in Turkey’s evolving modern life; however, many Turks still prefer their traditional Turkish coffee drinks. Although Starbucks serves Turkish coffee drinks as a nod to tradition, individuals who want Turkish coffee served “the right way” will still opt to go to a traditional and independent Turkish coffeehouse rather than purchase Turkish coffee from Starbucks or another chain (Tekin). Even young Turks will make this choice.

“If I want a latte, sure, I will go to Starbucks and get it. But if I want real Turkish coffee, I will not get it at a chain coffee store,” says Aycan Tekin, a Koç University student. “My friends and I find good Turkish coffee elsewhere. It just depends on what I want on a particular day.”

Given that local traditional shops and Starbucks provide different needs among Turkish consumers, it is no wonder that the two types of businesses can find a balance in the emerging 12 | P a g e

market. Today, Starbucks has 179 stores country-wide, mostly concentrated in Istanbul (“Loxcel Starbucks Store Map FAQ”).

Conclusions and Implications Despite different overall coffee cultures in the United States and Istanbul, local coffee shops and chain coffee shops cater to distinct market needs within both countries. Both corporate and local businesses are also able to brandish different sets of strengths: while coffee chains like Starbucks leverage corporate advantages like capital and grand strategy, local coffee shops can rely on community engagement and personal service to secure their customers.

These dynamics ensure the continued success of both types of businesses in the American and Turkish marketplaces. This is due to a fundamental principle of business: if there is a market for a product, it can be sold (Arslantürk). In our era of globalization, the diversity of market needs has grown worldwide.

The issue of globalization is an astronomically large phenomenon. However, this writing narrows down arguments around globalization to the manageable examination of how coffeehouse and coffee cafe culture has evolved in a world more connected than ever. A popular pastime since the Ottoman Empire, coffee culture continues to serve as a vehicle for globalization as well as a preservation of tradition in the modern age. Just as the Sultans of Turkey in the 1500s used coffee as a means of trade and diplomacy, Starbucks has performed the equivalent in today’s globalizing world by spreading and morphing culture, all the while making money. Just as coffeehouses of the 1600s served as hubs for diverse discussion, local shops in today’s day and age provide a place for patrons to either unwind together in Istanbul or recharge together in Houston.

Although globalization is certainly a contentious issue for those concerned about cultural preservation and small-business success, as we can observe, in both cities of Istanbul and Houston, multinational coffee chains like Starbucks can exist alongside locally-owned coffee shops, and will likely continue to do so as a healthy balance evolves between the two types of establishments. Perhaps this phenomenon around coffee shop dynamics can prove as a useful metaphor for our modern era: as multinational corporations wiggle into expanding to other cultures and countries, so the realities of regional culture become stronger and serve as the antithesis to such realities of globalization. As Thomas Friedman declares in The Lexus and the Olive Tree, participation in the global economy cannot come at the price of a society’s identity; rather, balance will be the key to success for both the economic health brought about by globalization and the roots of the “olive tree” which feed and color a given society’s culture and heart (42). In the future, a beautiful “world culture” will exist alongside the most formidable aspects of country, regional, and local culture.

And in such a world, you will be able to enjoy it all with any cup of coffee you would like.

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Works Cited Arslantürk, Kılıç. "Globalization's Role in Starbucks' Expansion into New Cultures."

Personal interview. 7 Mar. 2014.

Bakersville, Peter. "How Do You Compete with Starbucks in the Coffee Industry?" Slate Magazine. N.p., 24 May 2013. Web. Bhargava, Apoorv. “Coffee Culture in Cyprus, Greece, and Turkey.” Personal Interview.

27 Feb. 2014.

Black, Lewis. "The End of the Universe." Comedy Central. N.p., 21 Apr. 2002. Web. "Coffee Facts & Statistics." Specialty Coffee Association of America. N.p., 2012. Web. Daumas, Mason. "A Survey of American Coffee Commerce, Culture, and Consumption in Texas." Personal interview. 5 Apr. 2014.

Friedman, Thomas L. The Lexus and the Olive Tree. New York: Farrar, Straus, Giroux, 1999. Print.

Gonzalez, Angel. "Starbucks Enters Its 64th Country, Oil-rich Brunei." The Seattle Times.

N.p., 13 Feb. 2014. Web. Göymen, Dr. Korel. "Global Urban Lab Research Symposium Meeting." Personal interview. 4 Mar. 2014.

Horovitz, Bruce. "Starbucks Serving Alcohol at More Locations." USA Today. Gannett, 20 Mar. 2014. Web. "Loxcel Starbucks Store Map FAQ." Loxcel Starbucks Store Map. Loxcel Geomatics, 7 Apr. 2014. Web. Pendergrast, Mark. Uncommon Grounds: The History of Coffee and How It Transformed Our World. 2nd ed. New York, NY: Basic, 1999. Print.

Standage, Tom. A History of the World in 6 Glasses. New York: Walker, 2005. Print.

Starbucks Corporation. Form 10-Q. (2013) EDGAR. Web. 29 Dec. 2013.

Swallow, Erica. "The Entrepreneur's Guide to Coffee Shop Etiquette." Mashable. N.p., 13 July 2011. Web. Tekin, Aycan. "The Turkish Youth Perspective on Coffee Culture." Personal interview. 5 Mar. 2014.

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Welsh, Elif, and Soner Gรถktun. "Coffee Franchise Differences in Istanbul and on University Grounds." Personal interview. 5 Mar. 2014.

"What Are the Most Commonly Traded Commodities?" InvestorGuide Complete RSS. InvsetorGuide, 25 Jan. 2013. Web.

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Appendix I had the great fortune of having access to excellent interviewees who provided me great insight into coffee culture in both the United States and Turkey. Here I have provided brief bios of each of these individuals in order to shed further light on their perspective.

Kılıç Arslantürk – An international leader and international businessman, Arslantürk has had over 20 years of professional experience with multinational companies. His expertise is in leading global brand expansion in fast moving consumer goods, food and beverages, and fashion retailing. In 2003, he became the Turkey Country Lead for Starbucks Coffee and successfully headed Starbucks’s expansion efforts in Turkey from a start-up of 6 stores in one city to 46 in 6. Under Arslantürk’s leadership, Starbucks achieved a record speed of growth compared to any other food and beverages brand in Turkey. For his astounding success, Arslantürk was awarded the Spirit of Starbucks award by Howard Schultz, the CEO of Starbucks in December 2005. Arslantürk has since co-founded his own web startup, Vitrin.net, as CEO. Apoorv Bhargava – Growing up in Cyprus, Bhargava had excessive exposure to local food and beverage culture on both the Turkish and Greek sides of the island. During his travels, he was also able to explore various European coffee culture styles before settling in the United States.

Bhargava is an ex-Boston Consulting Group Associate, an experience which provided him with a business background that has catapulted him into a coveted job with OPower, an energy innovation company that recently issued its IPO. Bhargava graduated Summa Cum Laude from Rice University in 2012 with a B.S. in Chemical Engineering and a B.A. in Economics. He will be attending Stanford University Graduate School of Business in the fall of 2015.

Mason Daumas – As the General Manager of Houston’s highest volume coffee establishment, Rice University’s Coffeehouse, Daumas oversees all operations and team members with regard to sales, budgets, maintenance, and service. A long time coffee fanatic, Daumas began his career in coffee working his summers in high school at a local coffee shop: Caffe Yolly in Cedar Park, TX. There, he learned the craft of latte art, as well as how to properly brew the perfect cup of artisan coffee. He continues to bring the joy and culture of local coffee shops to his manager role at Coffeehouse while at the same time frequenting such shops around Houston in order to glean inspiration.

Soner Göktun – Göktun serves as the Food and Beverages Services Assistant Manager for Koç University, where there are over 20 different cafes and/or restaurants on campus for service to students, faculty, and staff. Göktun also attends annual food and beverages conferences in Europe in order to connect with regional and worldwide trends in the food and beverages industry. He has lived in Turkey his whole life, and has friends who own Turkish coffee shops.

Dr. Korel Göymen – Göymen is an Emeritus Faculty Member at Sabancı University within the 16 | P a g e

Faculty of Arts and Social Sciences. His expertise lies in local, regional, and NGO governance, metropolitan management, public policy, and local politics. He was previously the Deputy Mayor of Ankara and the Undersecretary of the Ministry of Tourism.

Aycan Tekin – Tekin is completing her degree in Chemical Engineering in Fall 2014 at Koç University, where she is the recipient of a four-year scholarship. Despite being a student, she has had extensive internship experience, including with Deloitte’s marketing division during summer 2013. Having lived in Istanbul most of her life, Tekin studied abroad in Houston during spring 2013 where she experienced American culture first-hand and also was able to compare coffeehouse culture.

Elif İçbilen Welsh – Welsh is an expert marketer, communicator, translator, and organizer, strengths which have all been exhibited via her extensive international work. After working in communications with BBC World Service in London, Welsh moved to Reuters Media Sales and Training in Istanbul. She currently works as a coordinator at Koç University, where she not only collaborates with food and beverages, but also also runs an English Language Course for Turkish youths.

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Acknowledgments First of all, I would like to extend a my most gracious thanks to my interviewees, who kindly provided me with their time and expert opinions, all of which served as excellent foundations for this study’s completion.

This study simply would not have been possible – or even exist – without the hard work of Ipek Martinez and Abbey Godley of the School of Social Sciences.

Both put in innumerable hours to make Global Urban Lab happen, which enabled me to travel to Istanbul for my research. The trip to Istanbul and our itinerary of experiential learning simply would not have existed without their dedication.

Dr. Nia Georges worked in tandem with Ipek and Abbey for the months leading up to the trip, and she has served as my devoted research advisor during this semester. Her incredible insight has been invaluable throughout the course of the semester and of course during our trip to Istanbul together.

Assisting the trip team were also Giray Özşeker and Mitchell Massey, the two TA’s without whom we would have been lost. Thanks for being an amazing guide and translator, Giray, and Mitch, thanks for being our link to Istanbul!

Ali Koç and the Koç family selflessly provided us with incredible experiences and assistance with room and board during our time in Istanbul, and as such, they deserve a big “Thank you” as well.

I would also like to thank the folks at the Kinder Institute for sponsoring Global Urban Lab’s research, and in particular Dr. Michael Emerson and Alex Wyatt who have played a very strong hand in supporting us through our research.

To all of the members of the Global Urban Lab Program Spring 2014, both London and Houston groups: I could not be more fortunate to have spent one of the best weeks of my life with such an incredible group of people. Thanks to all of you for being you.

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