Howard Schultz, the founder, chairman, president and chief executive of the Starbucks Coffee Company, has a way with parables. This morning at the American embassy in Kigali, the capital of Rwanda, he is telling, to a group of young Rwandan entrepreneurs, the various stories by which he makes sense of the phenomenal success that is his life. Those of us who have been travelling with Schultz for a day or two among the subsistence coffee farmers of the world's 15th poorest country have heard most of the stories before, but they are told with such a conviction, both humble and zealous, that each time is like the first.
The stories include the one about Schultz's dad, a truck driver who used to distribute and collect nappies in Brooklyn; one time his dad got sick and lost his job; they had no health insurance and the family and his father went on the rocks. (Schultz vowed that day that if he ever owned a business, health insurance for all employees would be a priority. "I often ask people," he says, "what is the biggest item on the Starbucks balance sheet?" Everyone answers coffee. In fact it is health: a $300m a year premium for American employees.)
Another story describes the evening that Schultz - who, at 55, has retained some of his college quarterback good looks - went, as a teenager, to take a wealthy girl out on a date; all was going well until her father asked Schultz where he lived. He explained he lived in the Projects - in public housing - in Brooklyn, and the girl's father winced as if he had been struck. Schultz has never forgotten that wince. The intent of these stories, today and every day, is to let his audience know, and to remind himself, that Howard Schultz once had nothing, that he was nobody; that he has known your despair and frustration; that he is the living embodiment of the American dream. It works.
For this morning's talk, given to the packed room of young businessmen and women, the stars of Rwanda's slowly emerging middle class, Schultz adds a few stories that he has picked up from his time in the country. The first is about a woman we had met at a coffee co-operative the day before. Schultz had sat with her and asked if she could have anything in the world, what would it be? The woman had answered quietly that she dreamt of owning a cow. The answer seemed so prosaic to Schultz that he was momentarily stunned. He still seems so now, as he describes it. A cow?
The other story that Schultz cannot get out of his head he heard at a charitable refuge called Foundation Rwanda. A woman he met there had been among the girls who had been raped during the Rwandan genocide of 1994, and when she had become pregnant she had been abandoned by what was left of her family. She was HIV positive and lived in a one-room hut with the daughter she had carried to term, now 15, and the five children of her murdered brothers and sisters, whom she had adopted. She supported her children by getting up at dawn and buying onions from a wholesaler and then sitting all day at the market, trying to sell them. Once again, Schultz asked her his question. What did she most need to make her life easier? Two things, the woman told him; first, access to microfinance so she could buy more onions and get her business on a sounder footing; second, some glass for the windows of her hut to keep out the termites. Once again Schultz was stopped in his tracks. He helped the woman with some money. "We must be," he says, "responsible for what we see and hear." It is a favourite Schultz mantra. Another is: "Don't be a bystander."
The stories present each of us in the room with a question. It is, I guess, the question that has been nagging at me since I came out here with Schultz and several other Starbucks executives, including the UK managing director Darcy Wilson-Rymer and their man in Africa, Chris von Zastrow, two days before. The question is a supplementary to Schultz's mantra - "We must be responsible for what we see and hear" - and it is this: where exactly should the responsibility of a company like Starbucks begin, with its 17,000 stores and its 50m cups of coffee sold every week, and where should it end? And how much should a man like Schultz, worth $386,868,731 at Forbes magazine's last count (down from more than a billion two years ago), be prepared to do himself when confronted, as he has been, by the stories he has told?
There are a couple of people in this room who have a clear answer to the first part of that question. Harriet Lamb is the irrepressible chief executive of Fairtrade in the UK, and Rob Cameron is director of the world standards agency FLO (the Fairtrade Labelling Organizations). To them a company's desire not to be a bystander should begin with a commitment to the principles of Fairtrade. In the case of coffee, a commitment directly to pay farmers who are organised into democratic co-ops more than the Fairtrade minimum price for their coffee ($1.25 per pound of arabica) and to add a premium of 10 cents per pound to the co-operative for investment in community projects.
It's certainly a start. Howard Schultz has come out here to meet with some of those co-operatives and to announce a commitment that by the end of this year all of the espresso coffee - which goes into cappuccinos and lattes and the rest - sold in Starbucks' 747 English shops will comply with those standards and bear the Fairtrade stamp. The commitment will make Starbucks far and away the biggest buyer of Fairtrade coffee in the world (and will go some way, Schultz hopes, to restoring some of the damaged image of his ubiquitous brand).
He ends his talk this morning with a final parable. It is a story he heard from a rabbi in Israel, and it is about the Holocaust. When the transports arrived at concentration camps, Schultz explains, and unloaded their desperate and naked human cargo, one of the ways the Nazis tried to destroy their prisoners' spirit was to randomly offer just one person, freezing and broken by the journey, a blanket. The blanket would be a symbol of the arbitrary divisiveness of the death camps; it was given to undermine any collective feeling. In every case, the first thing the person did was to attempt to share it with his fellow prisoners, make it stretch around four or five bodies. This is Schultz's message to his audience, who know something about genocide first hand. "Share your blanket," he says. Schultz has wide, staring eyes when he talks, and he fixes them now on the room. "Share your blanket."
When he has finished, he invites questions from the floor. A young man gets to his feet and announces boldly: "Mr Schultz, I am disappointed. You have brought us here today on false pretences. I had come as a young businessman, in the hope that you would share the secret of how you made your millions; I work in the hotel trade and I was waiting to hear how I might create a great hotel chain across Africa, but what I hear is not the speech of an entrepreneur, not the speech of an American corporate giant, but the speech of a pastor." The young man pauses for a few beats. "On behalf of everyone in this room and from my heart I would like to thank you!"
There is great applause. Schultz smiles. His work here is done.
What Schultz does not spell out to his questioner is that in fact he has, over the course of his talk, not only spoken like a preacher but in doing so demonstrated exactly how he has made his millions, how he has grown Starbucks from "one small shop in a small city called Seattle, Washington" into the biggest retailer of hot drinks in the world. He has done it by evangelising, by spreading his word about coffee.
In the beginning, in 1985, Schultz explained to his investors that America had never understood what coffee was. He told them about coffee shops in Milan, and how he believed he could build a chain of shops that incorporated the passion he had seen there - to let Americans in on the Italian secret of espresso and cappuccino and latte (albeit in bucket-sized cups). Schultz initially planned 100 stores; after his original round of storytelling he crossed out that number and wrote down 75.
When his idea began to work, he told more stories to the people who were employed in his shops and at his roasting plants ("partners", he insisted on calling them, because he gave each of them the opportunity to have a small stake in his enterprise, paying a proportion of salary in stock options). The gist of these stories was about how "Starbucks was not a coffee company serving people, but a people company serving coffee". These stories took hold, too, and became woven into the atmosphere of each of Starbucks' exponentially rising number of stores. Starbucks held no patents, it did no advertising, but it learned how to incorporate the essence of Schultz's storytelling - that coffee was the ultimate communal drink, that it could bring people together from across the world in an enlightened "ecosystem" - in everything it did. No matter that the story could only be partly true, it was what Starbucks customers - 50 million a week - bought into every time they ordered a mug of coffee. It was the "experience" that kept them coming back for more.
One of the reasons that Schultz has come to Rwanda four times in the past three years is that he has found an ally in his storytelling in President Paul Kagame. Kagame has used the power of narrative to lead his small landlocked country from the terrible days of genocide to a point where it is routinely considered a model of African possibility. Kagame, the most studious of military leaders, who got his political education in refugee camps in Uganda, has somehow reinvented himself as a master of marketing. He has rebranded his country, not only to the outside world but also to his people, through an inclusive program of confession, forgiveness and forgetting, Rwanda has not only, on the surface at least, moved on from the horrors of civil war, it has bought into a tale of the possibilities of trade and economic advance.
One evening, before the president has dinner with Schultz at his private residence, I sit down with him in what looks like a wedding marquee in his grounds and ask him about the curious friendship that has seen Kagame visit Seattle on several occasions and be entertained at Schultz's home. What is in it for him, I wonder.
"For a start," he says, smiling, "we both have an interest in coffee." Rwanda is quite a minor player in the world coffee markets, but it is still the nation's number one export. I wonder how the president will measure the success of Starbucks' investment in his country.
"What we look for is to see that the farmers are getting more out of their crop," he says. In the recent past farmers have been abandoning coffee because there was no income in it - in real terms coffee farmers are paid far less than they were 30 years ago. He believes that Starbucks, which has opened a $250,000 farmer-support centre in Kigali to share best practice, can help to reverse that trend. He wishes they could do more - "We'd love to see more of the value chain over here," he says, meaning roasting plants and packaging facilities, "but we don't want to make too many demands. You have to move at their pace, really."
Kagame is a soft-spoken and serious man, but he becomes animated when he lays out his vision for his country. "Trade has always been the single most important thing to enable transformation to take place here in Rwanda; it creates entrepreneurship, self-reliance, rather than people always waiting for someone to help them out." After the genocide, Kagame suggests, trade not aid was really their only hope - "If you have to work with your neighbour, have to sell him something, then it builds a community." There is, he says, no other way to achieve it.
Kagame has made a point of selling this tale to a world-class team of yarn spinners: Bono has been here, of course, and Bill Clinton; Tony Blair has a full-time office in Kigali, paid for by Lord Sainsbury and staffed with a team of up to nine people, providing technical support in the country's efforts to build a civil society; the Bill Gates Foundation has invested $49m in the agricultural consultants Technoserve, which is helping small farmers increase their yields and quality with practical interventions; and then there is Schultz. Kagame sees in their association not only the chance to get a fairer deal for Rwanda's impoverished farmers but also a possibility of connecting directly with a vast constituency of consumers - bringing them the good news of Rwanda's transformation, the happy ending he is trying to write to all the horror. "I believe I can tell that story through their stores," he says. "Alongside the story of Rwandan coffee many other positive stories of Rwanda can be told."
Is he confident, I wonder, that the story goes deep enough to prevent the horror from returning?
"We still have a huge challenge in rural areas," he says. "But still I guess that every single family is in a better situation than it was 15 years ago. How much better - that is the question."
You don't have to travel very far out of Kigali to be confronted with some of the answers to that question. Rwanda is a lush and fertile country, the slopes of its hills are dense with coffee trees, but the average coffee farmer still lives on little more than $1 a day in a one- or two-room hut. With the Starbucks team, and Harriet and Rob from Fairtrade, we bump along dirt roads in Jeeps in search of the subplots in Kagame's transformative narrative. At the coffee co-operatives the stories come at you thick and fast. Many of them are, in the face of all evidence to the contrary, full of hope; all of them are heartfelt, many are heartbreaking.
Each co-operative we visit has a pioneer, someone who has seen the possibilities of organisation, the protection it might afford from sharkish coffee traders, the opportunity to build a new society from the carnage of civil war. These men greet us in knackered suits and ties, the women in their Sunday clothes, and talk of some of the benefits that have flowed from the initial arguments for co-operation. One after the other they take us around their coffee-washing stations, among the mesh trays on which the coffee "cherries" are sorted for quality and the coffee is left to dry, and they talk of how the guaranteed minimum price of Fairtrade coffee has given them a small measure of security, of how they have voted to put their accumulated 10-cent premiums toward schools, or health insurance, or a canteen, or mountain bikes. By way of greeting, the women dance for us (and Harriet Lamb, full of giggles as well as policy directives, insists that the British contingent hokey-cokey in reply).
When you sit down to talk with the farmers, the stories they tell of their own lives are often fractured and incomplete. The past is often too hard for them to contemplate. When I try to get anyone to describe the year in which these valleys were killing fields, as Hutu massacred Tutsi, they talk in vague terms or say nothing. For many, it seems life began in around 1998, or 2000, or 2001, with the creation of their coffee co-operative and a chance to plan a little for a future that had once seemed so unlikely.
On the long drive up to Dukunde Kawa co-operative in Musasa I sit with Harriet Lamb and Rob Cameron and ask about the implications of Starbucks becoming a Fairtrade organisation in the UK. Isn't the scale of the operation at odds with Fairtrade's "know your farmer" ethos?
Lamb is adamant that it is not. The Starbucks deal is one of a number of agreements with large corporations that are currently being rolled out. Cadbury's, for example, is about to make Dairy Milk a Fairtrade product. It is, both Lamb and Cameron believe, a natural process of evolution. "We started with the early adopters, what we call the 100 per centers, the real pioneer brands, Divine chocolate, and Café Direct coffee, and Traidcraft. Next came some retailers, and now we are getting to the really big players. Starbucks originally said to us we will offer a Fairtrade product as an option and see what happens. When it went down well, we said: 'Why not do it across the board?'"
Lamb has some research that suggests that 65% of shoppers are willing to pay 10p extra for a bag of Fairtrade-certified coffee. In that sense isn't the Starbucks commitment really a clever piece of risk-free marketing?
"Well, I am sure they have their research," Lamb suggests, "but their commercial interests are not really our problem. We are there to try to get the best possible deal for the farmers. It stretches beyond price and premium. Their access to loans is improved. Their access and to long-term contracts is improved. The risk for Starbucks," she says, "is the fact that they are committing themselves to a global system where the standards are set by multi-stakeholder dialogue, and producers and consumers are very much part of that dialogue."
"And once you are in Fairtrade," says Cameron, "it is very hard to leave."
If multinationals like Starbucks come on board, how do they keep the pioneer brands - led more by altruism than shareholders - distinct?
"The role of those brands is critical too because they are always going to raise their bar to the next level. In many cases the chocolate bars and the coffee are actually part-owned by the producers. Now that is really exciting. That is the next stage."
I can, I suggest, see the advantages to Starbucks of having a Fairtrade product in the UK. What does Lamb see as the primary benefits to the farmer?
She tells the story of a farmer in Costa Rica who always sold his coffee to the first middleman who came through his village; he had no idea where his coffee was going or what was a fair market price. Now, as part of a co-operative, with a long-term fixed contract to sell Fairtrade, he discusses the day's commodities prices on the New York trading floor with a buyer he can trust. "The greatest benefit is empowerment," Lamb says. "The farmers are no longer just impoverished figures at the end of a supply chain - they are international businessmen sitting around a table with Howard Schultz!"
Later that morning the leaders of the Dukunde Kawa co-operative are doing just that. Schultz has arrived in Musasa by helicopter, loaned by the president, deus ex machina, and now he is seated in an annex of the Fairtrade premium-built canteen discussing the co-operative's concerns. It is an odd scene, the multimillionaire and the peasant farmers, but as well as being a good storyteller Schultz is an attentive listener. The co-operative members raise their questions, and Schultz attempts to address them. One man says they have had difficulties raising a microloan. "I think we can solve that problem," Schulz says, and outlines a microbank that Starbucks can help them to access.
'"We are selling coffee in euros and being paid in dollars ... " another man suggests.
Schulz believes, too, that those currency problems can be resolved. He refers to the Farmers Support Centre in Kigali, with a full-time staff of two - his first employees in Africa - which he hopes will become these farmers' new "home".
There is talk of pests and fertilisers and the administrative costs of fair-trade certification. Schultz gives the impression of being able to solve any problem. When the question of cows comes up, he calls across to Darcy: "Let's see if we can organise some cows." Harriet brings the women into the conversation. They speak of their hope to set aside one day a week when they can make their own coffee, a feminist brew, "because we work harder at it than the men". There is a general agreement that the farmers would like to be able to sample their own product - many of them have never tasted coffee - and again Schultz points them toward the Farmers Support Centre, which will have a "cupping" facility to allow them to taste their coffee and learn how to improve its quality.
When the meeting breaks up, Schultz heads off to address the entire co-operative of 2,000 farmers plus families who have gathered on a hillside. It is an impressive sight.
"Starbucks is here to stay," Schultz says. "We are going to be buying coffee from you for many years, we see something in the hearts and minds of the people here, and we want to bring it to our stores all over the world ... "
As he leaves for the helicopter, the coffee collective's choral society joins in a farewell song. I ask for a translation.
"Through coffee we should be able to make money and be rich," the chorus goes. "All the women grow coffee, please, and will all be wealthy." The drummers go wild as the helicopter takes off.
It has taken Howard Schultz a long time to integrate an idea of Africa into his great Starbucks narrative. In his memoir of the company's growth, Pour Your Heart Into It, the first and only mention of Africa (of a trip made to Kenya by a colleague) comes on page 295. Over an early-morning Rwandan coffee the following day, I ask him why it took him so long to get here.
Schultz suggests that in the early years of Starbucks' growth, they were so concerned with paying the bills that they did not have too much time to think of what he likes to refer to as "origins" - his global network of coffee farmers in 30 countries. "We were fighting for survival every day. I remember sitting at the kitchen table and trying to figure out how we were going to pay the milk guy ... "
But after that, when things started to go well?
"I think we as a company realised a long time ago that whether we liked it or not we inherited a relationship with many different people across the planet. We've tried to integrate our values in all those relationships. We haven't always got it right. It's hard, especially when you get bigger and successful people are looking for the warts as opposed to the positives."
In the past few years, the positives for Starbucks have been a little hard to come by. Its ethical standards and anti-union practices were widely debated - particularly in the damning documentary about Ethiopian coffee, Black Gold. After two decades of unprecedented growth, profits also fell last year by more than 50%. The firm announced more than 10,000 job losses and 1,000 store closures. Schultz, who had stepped back from the day-to-day running of the company in the millennium year to spend more time with his family, returned as chief executive in January 2008.
He came back, he says, "principally to try to fix some things. I just felt we had achieved 15 years of astounding success as a public company, and I think success sometimes breeds entitlement. We reached the point where I thought maybe the company was drifting. I didn't want to come back to point blame; I just wanted to get back to the culture that formed the company."
It seems that the fair-trade commitment in the UK and the involvement in Rwanda is a key part of that attempt to reaffirm values, join up the various parts of the Starbucks story. Is that why he is here?
"I think it is emblematic of what we are trying to be about. I remember my early conversations with President Kagame, where he was outlining his vision for Rwanda. It took me a while to understand that in fact Starbucks could come here and really make a difference. We do not have the resources to do it all. The line is so long of people who have needs." Is it, I wonder, in part a kind of penitence? Starbucks became in some minds synonymous with the excesses of multinationals, wedded to growth at all costs ...
"I think that association has been blown out of proportion," Schultz says. "In some way we were labelled as one of the poster children of the prevailing culture, but that was never fair." Would he like to see all the coffee they sell across the world be Fairtrade? He would, he says, and that is the way they are heading, though there are questions of quality and supply to deal with.
I wonder, thinking back to yesterday, how strange it felt for him to be sitting down with the coffee farmers, given all that he has, and all that they lack.
"It is perverse," Schultz suggests. "The only difference between me and them is that I was born here and they were born in Rwanda. The determination we must have when we get to our daily lives is that we do not forget them, and their stories."
As Schultz goes on to describe how his formative years have given him a special affinity for understanding poverty I find myself thinking of another question: can any organisation as vast as Starbucks and one so in thrall to its shareholders really keep the lives of Rwandan coffee farmers at the front of its thoughts? The Fairtrade commitment is one answer, but it is not the whole story. Later that day a farmer's leader we meet offers Schultz a parable of his own, which describes the impact he hopes he might have on the CEO.
"At one time there was a great king who had a loyal servant," he says. "The great king says to the humble servant: 'You have served me well, and if I could give you anything as a reward, what would it be?' The servant thinks for a long time and then he says: 'What I would like is this. I would like that the next time you meet with all the other kings from the region and they sit around you in their fine clothes, I would like you at one point to break off from talk with them and lean over to whisper something in my ear, let them know I am important too ... '"
Do stories like that ever come true?
• This article was amended on Thursday 23 July 2009. In the article above we referred to Project Rwanda. We meant Foundation Rwanda. This has been corrected.
