Previously, the campaign to boycott Starbucks products was often launched either in Malaysia or in other countries because Starbucks allegedly channeled funds to Israel to commit atrocities against the Palestinian people.
But did you know that Starbucks is actually ‘hard to find food’ in Israel?
In 2001, Starbucks entered the Israeli market but two years later, Starbucks was rumored to be bankrupt.
In fact, Starbucks is the largest chain of coffee shops owned in the United States (US) in the world. Earlier this year, the company operated more than 30,000 branches in more than 70 countries.
But why is Starbucks so popular around the world, so hard to make a profit in Israel? There are several factors that lead to such a situation.
The first factor is that Starbucks only opens a branch in one city, Tel Aviv, so residents in other cities do not have time to get to know and taste Starbucks.
Starbucks in Israel is owned by a conglomerate company, Delek Group. The company owns 80.5% of Starbucks shares in Israel. The firm is one of the largest companies in Israel and is involved in the energy and infrastructure sectors.
Only 6 branches opened in Israel in two years but all are located in Tel Aviv. Starbucks planned to open a branch in Jerusalem but withdrew the plan out of concern about the rebel threat.
Tel Aviv is known as a ‘food paradise’ for food lovers as there are hundreds of local restaurants and street food there.
Furthermore, the Jewish community loves to drink coffee in their daily lives. Therefore, Starbucks expects their business to sell there.
The second factor is that Israeli society does not like to drink coffee in paper cups. They think drinking using paper cups is more synonymous to take home. Unlike in the US, the people of that country are more likely to buy Starbucks to take to the office for example.
Israeli people prefer to drink coffee while chatting with friends in the store.
The third factor is that Starbucks coffee does not suit the tastes of the Israeli community. They prefer coffee from Italy due to geographical factors between Israel and Italy.
Local coffee shops like Aroma Espresso Bar and Arcafe serve premium Italian coffee, so they prefer shops like this over Starbucks.
Because Starbucks did not receive a warm response in Israel, the company officially withdrew from the Israeli market.
The closure of Starbucks sparked controversy after rumors surfaced that the coffee shop branch was closed due to political issues. Many are claiming that Starbucks was closed following the boycott of the Arab population over US business in Israel.
However, Starbucks Vice President of Business Development in Europe, the Middle East and Africa, Bill O’Shea through a statement issued informing that Starbucks was closed in Israel due to business factors and not political issues.
In 2005, Starbucks tried to plan to reopen its business in Israel but the plan was buried.
