The question “Does Starbucks Supports Israel?” has emerged as a controversial issue for the coffee giant that has operated in the Middle East since 1999. Despite its strong regional presence with more than 1,900 stores spanning from North Africa through the Middle East and Turkey to Central Asia, Starbucks has recently faced significant backlash from consumers. The company employs over 19,000 baristas in the region through its franchise partner Alshaya Group; however, calls for a Starbucks boycott intensified after Israel’s war in Gaza.
This boycott movement gained substantial traction on social media platforms, with hashtags like #boycottstarbucks accumulating millions of views on TikTok and X. As a result of these consumer actions, Starbucks acknowledged “a negative impact to our business in the Middle East” and noted that “events in the Middle East also had an impact in the U.S., driven by misperceptions about our position”. The economic consequences have been substantial, with Starbucks facing lower sales, a declining share price, and ultimately laying off over 2,000 staff in the Middle East by early 2024. Meanwhile, the Starbucks Foundation, along with global licensee partners, has provided over $3 million to World Central Kitchen to deliver more than 1 million meals to families in Gaza.
Why Starbucks is being accused of supporting Israel
The allegations that “Starbucks supports Israel” stem primarily from several sources of misinformation that gained traction across global audiences.
The viral hoax letter and misinformation
The controversy originated from a hoax letter falsely claiming that Starbucks was funding the Israeli military. This fabricated document, supposedly written by former CEO Howard Schultz, has been repeatedly debunked. In fact, this misinformation has circulated since 2006, causing Starbucks to issue multiple denials over the years. The fake letter sparked significant outrage, particularly in regions sympathetic to the Palestinian cause. Additionally, many continue to claim that Starbucks provides either direct or indirect support to Israel, perpetuating misconceptions about the company’s political stance.
Starbucks’ public denial and clarification
Starbucks has consistently maintained that “neither Starbucks nor the company’s former chairman, president and CEO Howard Schultz provides financial support to the Israeli government and/or the Israeli Army in any way”. The company has repeatedly emphasized that these rumors are “absolutely untrue”. On its corporate website, Starbucks clearly states: “Despite false statements spread through social media, Starbucks has never contributed to any government or military operation in any way”. Furthermore, Starbucks CEO issued a letter stating, “Our stance is clear. We stand for humanity”, while emphasizing that the company “has no political agenda”.
The role of social media in spreading the boycott
Social platforms have significantly amplified the boycott movement, with hashtags like #boycottstarbucks garnering millions of views on TikTok and X. The situation intensified following an incident where Starbucks Workers United posted “Solidarity with Palestine” on social media after October 7. This post, written by one individual without union authorization and quickly deleted, prompted Starbucks to take legal action against the union for unauthorized use of its name and logo. Consequently, many interpreted this lawsuit as retaliation against Palestine’s support rather than a copyright issue. A TikTok video by one barista demonstrating how to make Starbucks beverages at home garnered 9.3 million views, highlighting social media’s significant role in sustaining the boycott movement.
Howard Schultz’s history and investments
Howard Schultz, the former long-time CEO of Starbucks, stands at the center of many allegations regarding the company’s supposed ties to Israel. Born to Jewish parents, Schultz built Starbucks from a small Seattle coffee shop into a global empire with over 30,000 locations worldwide.
His leadership role and public image
Schultz served as CEO from 1986 to 2000 and again from 2008 to 2017, before becoming chairman emeritus. During his tenure, he positioned Starbucks as not just a coffee retailer but a “third place” between home and work. Notably, his public statements often emphasized progressive values, though he maintained a complex relationship with Israel throughout his career.
Awards and recognitions from pro-Israel groups
Throughout his career, Schultz received several honors from Jewish and pro-Israel organizations. In 2019, he accepted the Israel Policy Forum’s Annual Award. Moreover, the Jerusalem Post once named him among the world’s 50 most influential Jews. These connections have fueled speculation about Starbucks’ political leanings, though the company maintains it holds no political agenda.
Investments in Israeli tech companies
Schultz’s personal investment portfolio includes stakes in various Israeli startups. Through his venture capital firm, Maveron, he has backed several Israeli technology companies. Primarily, these investments focus on innovative consumer-facing businesses rather than military or defense enterprises. Nevertheless, these financial ties continue to complicate Starbucks’ position during the Middle East conflicts.
Indirect financial links through shareholders
Beyond personal connections, a key aspect of the “Starbucks supports Israel” controversy centers on the company’s major institutional shareholders. This financial dimension adds complexity to the boycott debate.
Vanguard and BlackRock’s dual investments
The financial links primarily involve two major investment firms. The Vanguard Group holds approximately 7.7-9.5% of Starbucks shares (90.5-111.11 million shares). Simultaneously, Vanguard serves as a top shareholder in Elbit Systems, Israel’s largest weapons manufacturer. BlackRock, which holds approximately 7.2% of Starbucks (77.19-84.3 million shares), also maintains significant investments in Lockheed Martin, a company that produces fighter jets for the Israeli military.
How shareholder influence works
Shareholders exert substantial influence on corporate policy. In 2023, Starbucks investors approved an independent review of the company’s anti-union efforts, demonstrating shareholder power. Another group of 73 shareholders representing over $3.40 trillion in assets urged Starbucks to change its approach toward unions. Hence, major investors can potentially shape company decisions beyond profit margins.
Why indirect links matter to activists
For boycott supporters, these financial connections create an indirect path where Starbucks profits could ultimately support Israeli military operations. Although Starbucks itself has no direct investments in Israel, critics argue the company exists within a broader economic network that includes military funding. This perspective fuels the boycott movement, which has already led to 2,000 employee layoffs in the Middle East region.
Impact of the boycott on Starbucks
The boycott movement against Starbucks has translated into measurable financial consequences for the coffee giant.
Sales decline and layoffs in the Middle East
Starbucks experienced its largest sales drop since the pandemic, with a 7% decline. Specifically in Malaysia, sales plummeted 36% year-on-year, resulting in a net loss of $69 million. Essentially, the boycott’s impact forced the AlShaya Group, which operates Starbucks in the region, to lay off approximately 2,000 workers—about 4% of its 50,000-person workforce.
CEO’s admission of boycott effects
Starbucks CEO Brian Niccol straightaway acknowledged the financial damage from boycotts, calling them “really unfortunate”. During an earnings call, CEO Laxman Narasimhan confirmed, “We saw a negative impact on our business in the Middle East” and noted that “events in the Middle East also had an impact in the U.S., driven by misperceptions about our position”. This recognition came amid the company losing between $11-12 billion in market value.
Comparison with other boycotted brands
Similar to Starbucks, other multinational brands perceived as Israel-supporting have faced consumer backlash. Americana Restaurants, operating KFC and Krispy Kreme in the Middle East, reported a 48% decline in first-quarter profit. Conversely, local alternatives have thrived—Egyptian soda sales increased 500%, just as Jordanian coffee chain Astrolabe’s business grew by 30-40%.
This article is part of our in-depth series on companies linked to Israel. For the full breakdown, see our main report: Food Companies That Support Israel
Final Thoughts
The fallout from the Starbucks boycott extends beyond immediate financial consequences, revealing deeper geopolitical dynamics at play. In regions where protests are severely restricted, boycotting brands like Starbucks represents a low-risk method for collectively expressing anger about both Gaza and US support for Israel. Previously, such boycotts lacked staying power, yet current movements have demonstrated unprecedented momentum.
Evidently, the most successful boycotts are those where consumers feel they’re making a tangible difference. This explains why, amid the ongoing controversy, Starbucks CEO published a letter calling for peace and blaming “misrepresentation” for store vandalism. Such crisis management efforts highlight a corporate attempt to regain control of the narrative without taking explicit political positions.
In essence, the question remains whether these boycotts create lasting change or eventually fade. Some college students have achieved measurable success, with Cornell University officially announcing it won’t renew its Starbucks contract when it expires in 2025. Still, many customers reportedly experience “boycott fatigue”, potentially limiting long-term effectiveness.
Certainly, the broader implications for US perception in the Middle East warrant attention, as public indignation toward American policy has reached unprecedented heights. This reality suggests the repercussions of such boycotts may persist long after immediate headlines fade.
FAQs
1. Does Starbucks support Israel financially?
No. Starbucks has repeatedly denied providing any financial support to the Israeli government or military. The viral letter suggesting otherwise was a hoax that has been circulating since 2006.
2. Why do people believe Starbucks supports Israel?
The controversy stems from misinformation online, particularly the fake Howard Schultz letter, along with his personal ties to Jewish and Israeli organizations. Additionally, Starbucks’ major shareholders (like Vanguard and BlackRock) also invest in Israeli defense companies, fueling indirect association claims.
3. What action has Starbucks taken regarding the Gaza war?
Through the Starbucks Foundation and global licensee partners, the company has donated over $3 million to World Central Kitchen to deliver more than 1 million meals to families in Gaza. Starbucks maintains that it does not take sides in the conflict.
4. Did Starbucks fire employees or sue unions over Palestine posts?
Yes. In 2023, Starbucks sued Starbucks Workers United after a “Solidarity with Palestine” post appeared on social media using the company’s name and logo. Starbucks said it was a trademark issue, but many critics saw it as retaliation for pro-Palestinian speech.
5. How has the boycott affected Starbucks’ business?
The boycott has significantly hurt Starbucks, leading to a 7% global sales decline, a $11-12 billion drop in market value, and the layoff of 2,000 employees in the Middle East. Sales in Malaysia dropped by 36% year-on-year.
6. What role do Starbucks’ shareholders play in the Israel debate?
Institutional investors like Vanguard and BlackRock own major shares in Starbucks while also holding stakes in Israeli arms companies. Activists argue this creates an indirect financial connection between Starbucks profits and Israel’s military-industrial complex.
7. Is Howard Schultz personally connected to Israel?
Yes, Schultz has received awards from pro-Israel organizations and invested in Israeli tech startups through his venture capital firm, Maveron. However, these are personal ties, not official Starbucks policy.
8. Are other brands facing similar boycotts?
Yes. Companies like McDonald’s, KFC, and Krispy Kreme have also been boycotted for perceived support of Israel. Meanwhile, local alternatives in the Middle East have seen a surge in popularity.
9. How long will the Starbucks boycott last?
While past boycotts often lost momentum, the current one appears stronger due to social media amplification and the ongoing Gaza crisis. Some institutions, like Cornell University, have already cut ties with Starbucks, showing the movement’s impact may extend for years.