TIMES OF ISRAEL
by Jessica Steinberg
August 13, 2014

Starbucks denies helping Israel financially. It’s not the first time it’s run into business complications related to the Jewish state. Global coffee giant Starbucks vehemently denied last week that it provides any financial support to Israel or the IDF. That could be because it never succeeded in selling many espressos or Frappuccinos in the land of the hafuch, the local version of the latte.

The Seattle-based coffee maker opened six stores in Tel Aviv in 2001, only to close them just two years later. The company said at the time that it closed the stores due to “ongoing operational challenges that we experienced in that market.” It may have had more to do with Israelis not liking Starbucks coffee.

The Seattle-based coffee maker, which started as a fledgling coffee-bean shop, was revolutionized by CEO Howard Schultz in 1988 after he visited Milan and copied the Italian model of espresso bars as a place for meeting and drinking coffee. He quickly expanded Starbucks, changing the way Americans drank their daily cup of java. The $5 Frappuccinos and $4 lattes quickly became national habits, as did Starbucks’ cafe culture, with customers learning how to set up shop with laptops and muffins while sipping their morning cuppa.

Schultz also expanded internationally, through Starbucks Coffee International, and now has more than 21,000 stores in over 65 countries, according to the store website. But the company failed dismally in Israel. When Starbucks  first entered the Israeli market, it formed a partnership with the Delek Group, one of Israel’s largest companies, which runs a chain of gas stations and convenience stores and is owned by self-made millionaire Yitzhak Tshuva. Their subsidiary, Shalom Coffee Co., was 80.5% owned by Delek and 19.5% owned by Starbucks. The joint venture opened six stores around Tel Aviv with a logistics center near Ben Gurion Airport. The coffee shops remained empty…..

http://www.timesofisrael.com/the-grande-coffee-plan-that-failed/