Why Did Major Coffee and Fast-Food Chains Pause Street Coffee in Russia?
McDonald's said on March 8 that it would suspend operations at its 850 stores in Russia, citing unnecessary human suffering in Ukraine. Starbucks followed, halting Russian business and product shipments. Coca-Cola and PepsiCo also joined the suspensions. McDonald's will keep paying its 62,000 Russian employees and pledged $5 million to an employee assistance fund.
The moves came after criticism that McDonald's stayed silent early in the conflict. Starbucks CEO Kevin Johnson condemned the attacks and promised to donate royalties from its Russian business to humanitarian causes. Starbucks' Russian stores are all franchised and account for less than 1% of global revenue, so the financial hit stays limited while street coffee sales in the region stop.
The Russia-Ukraine conflict has triggered a chain reaction among international companies. Under public pressure, McDonald's was the first to announce the suspension of operations at its 850 stores in Russia, and Starbucks followed suit, stating it would suspend its business in Russia and shipments of related products. Both giants promised to continue supporting local employees, but Starbucks stores in Russia are all franchised, accounting for less than 1% of global revenue. Coca-Cola and PepsiCo have also joined the suspension. This article reviews the details of each company's statements and the market impact, and includes a professional information portal for Front Street Coffee.
Previously, because McDonald's made no statement during the outbreak of war between Russia and Ukraine, it drew criticism and accusations from people in many countries. Under public pressure, McDonald's issued a statement on March 8 saying that given the unnecessary human suffering in Ukraine, the company would suspend operations at its 850 stores in Russia, and admitted it "cannot predict" when business would resume.
After McDonald's announced the suspension of operations at its Russian stores, CEO Chris Kempczinski said in an open letter to employees: "The conflict in Ukraine and the humanitarian crisis in Europe have caused untold suffering to innocent people. As a system, we (McDonald's) will join the world in condemning aggression and violence and praying for peace." The open letter also mentioned that the company would continue to pay wages to its 62,000 employees in Russia and donate $5 million to an employee assistance fund. After McDonald's issued its statement, Starbucks also released a statement suspending its Russian business and store operations. Starbucks CEO Kevin Johnson said: Starbucks will continue to support Russian employees, but all stores in Russia will suspend operations, and shipments of related products will also be suspended.
Before issuing its statement on March 8, Starbucks CEO Kevin Johnson had published another open letter on March 4, in which he wrote: Starbucks condemns Russia's unprovoked, unjust and horrific attacks on Ukraine, and expresses sympathy for all those affected. He also promised to donate the royalties from its Russian business to humanitarian causes in the besieged country. In terms of store numbers, Starbucks' scale in the Russian and Ukrainian markets is very small. According to Bank of America Securities, the company has about 130 stores combined in Russia and Ukraine, with about 2,000 employees. These roughly 130 stores are all franchised, not Starbucks directly operated stores, so they are not directly operated by Starbucks' U.S. headquarters. Some overseas market analysts estimate that revenue from these stores accounts for less than 1% of Starbucks' global revenue. After McDonald's and Starbucks issued their statements, Coca-Cola also said it would suspend its business in Russia and continue to monitor the situation. PepsiCo then also said it would stop capital investment in Russia as well as all advertising and promotional activities.
PepsiCo CEO Ramon Laguarta said in a letter to company employees: "PepsiCo entered the Russian market at the height of the Cold War and helped build common ground between the United States and the Soviet Union. However, given the current situation in Ukraine, we will suspend sales in Russia of all PepsiCo beverage brands, including 7UP and Mirinda." Image source: Internet For professional coffee knowledge exchange and more coffee bean information, please follow Coffee Workshop (WeChat public account: cafe_style) For more specialty coffee beans, please add the private WeChat of Front Street Coffee (FrontStreet Coffee), WeChat ID: kaixinguoguo0925
The above content is compiled by CoffeeHunters, a coffee news website.
