Starbucks and (RED) Team Up to Combat AIDS in Africa

Last year, Starbucks went red for the holidays, unveiling an attractive red cup, dotted with white snowflakes and sporting the company's logo in green.

This year, as the season of good cheer approaches, the chain is taking things one step further -- and in a more philanthropic direction.

In a surprise appearance at Starbucks' managers conference in New Orleans, Bono arrived on stage. U2's lead singer announced a partnership between his AIDS organization (RED) and the coffee chain: between November 27th to January 2nd, Starbucks will donate five cents from certain holiday beverages (Peppermint Mocha Twist, Gingersnap Latte and Espresso Truffle) to The Global Fund.

(RED) was co-founded by Bono and Bobby Shriver (the brother-in-law of Arnold Schwarzenegger) to raise funds for The Global Fund, which fights AIDS, tuberculosis and malaria. 

After the holiday season, the chain will designate certain products (RED), and proceeds from these will continue to be delivered to the Fund.

"Here we are, talking about the economy tanking. People are saying, 'Maybe the world doesn't need more coffee houses.' And what do you do? What does Starbucks do? You decide to give your money away," said Bono to his star-struck audience. "This is not charity. This is commerce."

In a press statement, Starbucks discussed the new initiative as framing "our commitment to doing business responsibly, our ability to use our scale as a catalyst of doing good, for our framers, our customers, our planet at large."

"If every single Starbucks customer bought one (RED) Holiday Exclusive (beverage) for a week, we would save 15,000 lives for a year in Africa," said Starbucks Senior Vice President Michelle Gass. The coffee chain has recently been struggling in the face of declining sales, however its stock recovered slightly after Bono's announcement.

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  • Lee Mitchem

    As Bono put it: "This is not charity. This is commerce." With a fraction of the sales of the high-end, possibly-high-profit, seasonal Starbucks drinks going toward helping people with AIDS in Africa and consumers using this to justify indulging in the financially guilty pleasure of a $5 cup of coffee, Starbucks and (RED) have definitely created a win-win for the not-for-profit and business sectors. Given Starbucks' struggling sales, this relationship with (RED) may even be a very well planned hedge against poor sales during a time when consumers are tightening their belts because of the financial crisis. It does make me wonder if the average consumer would even think to consider the moral and financial benefits of donating the entire $5 instead of the fractional amount Starbucks will donate (and take a tax break on, which the consumer is passing up for a delicious, hot brew). For how long are these symbiotic relationships effective at generating added business revenues and consumer buy-in? The seasonality of this particular relationship makes sense because Starbucks is seasonal in its high dollar drinks.