
Starbucks, the world-famous global coffee chain, finds itself today facing a defining moment of its own, influenced by evolving customer expectations, economic downturn, and an expanding menu of legal and reputational challenges. From the recalibration of its custom-drink pricing model to dealing with the fallout of global tariffs and fighting a high-profile discrimination suit, the company stands at the intersection of operational costs, consumer loyalty, and public responsibility.
1. Custom Drink Fees Prompt Customer Controversy
One of the most significant changes affecting everyday Starbucks consumers is the addition of fees for customized beverage alteration. The business recently added extra fees for specialty ingredients $1 per scoop of matcha and 80 cents per extra pump of flavored syrup or sauce, as well as 50 cents per serving of fruit bits aimed at ingredients outside of standard recipes.
The company made this step following the increase in highly personalized beverages, especially those that are ordered through the Starbucks app. The pandemic pushed the advancement of digital ordering to enable clients to customize their drinks with unprecedented specificity. Several of the complex drink combinations began trending on social media, giving Starbucks viral buzz and a higher level of engagement. But that popularity put a strain on baristas, whose prep times got longer with each added ingredient, causing longer lines, more mistakes, and irate customers.
To Starbucks, these changes are not merely a convenience but true cost factors. They have been driven by inflation, rising ingredient costs, and the difficulty of accommodating special orders. To raise prices on all products or to increase prices only on those customers who order these add-ons is a choice the company made. It thought that this was the most equitable and honest approach.
Not everyone is in agreement. Long-standing customers who have become used to specifying the syrups they get each day have complained on social media. One consumer bemoaned that her usual drink, with two extra syrups, is now over a dollar more than it used to be, which has her thinking of making the drink from home. The sentiment shows increasing sensitivity to value and price, particularly among regulars.
Notably, CEO Brian Niccol has some experience with such dynamics behind him. At Chipotle, he made it the norm to charge for add-ons such as guacamole, aptly encapsulated by the saying “guac is extra.” This strategy seems to be resonating at Starbucks but in a different way with a move towards making customization a premium option rather than an add-on freebie.

2. Global Trade Pressures and Tariff Risks
Beyond pricing changes, Starbucks is also navigating the unpredictable world of international trade policy. Tariffs have long posed challenges for global businesses, and Starbucks is no exception. Ongoing trade tensions have led to fluctuating costs for imported equipment, packaging, and raw materials, prompting many restaurant chains to revisit their supply chain strategies.
Other companies such as Cava and Sweetgreen have proactively organized their operations to limit tariff exposure through domestic sourcing and pre-locking supplier contracts. Bloomin’ Brands, however, has openly accepted possible margin compression by as much as 40 basis points on the grounds of the expenses involved in constructing inventory and changing suppliers as tariffs change.
Chipotle has projected a combined impact of tariffs and inflation that will propel their cost-of-sales into the high 29% range. Aluminum, imported meats, and Asian produce tariffs are behind these hikes. The company anticipates reducing some of these effects by negotiating with suppliers, improving menu engineering, and negotiating long-term contracts. Nonetheless, the overall industry outlook has been reduced by companies like Fitch on account of tariffs as one of the biggest destabilizing elements.
Other chains have taken different approaches. Domino’s, which uses a significant percentage of U.S.-based food sources, sees little effect. Noodles & Company recently expanded its margin estimates to incorporate an up-to-50-basis-point effect in recognition of some risk but overall staying positive. Potbelly is also closely monitoring tariff developments but doesn’t foresee significant disruption to its annual forecast.
Restaurant Brands International, owner of brands such as Burger King and Tim Hortons, hopes its localized sourcing strategy will keep tariff-related cost hikes to around 100 basis points or lower.

3. Starbucks’ Strategy to Reduce Tariff Exposure
Starbucks is acting proactively in the face of tariff risks. CFO Cathy Smith reported that the company has developed a cross-functional team responsible for tracking, managing, and reducing these exposures within its supply chain.
While the company’s mainstay coffee is not substantially affected by tariffs in most countries, other products such as mugs, tumblers, and certain beverage ingredients from China do come with costs. Starbucks is also aggressively stepping down dependency on high-tariff markets by localizing manufacturing, shifting manufacturing locations, and redesigning its seasonal merchandise strategy. For instance, holiday product manufacturing already has been transferred in some instances to lower-impact locations.
For coffee itself, Starbucks buys arabica beans from 28 countries, with a significant portion of the supply coming from Latin America. The variety of countries of origin insulates Starbucks from country-by-country tariffs. During times of disruption, Starbucks can reroute shipments to other ports or depend more on countries with lower tariffs such as Colombia and Peru.
Sweetgreen offers a interesting analogy. The company is forecasting a 75 basis-point Q2 cost rise as a result of tariffs imposed on imported parts for its robotic kitchens. In spite of that, Sweetgreen is proceeding with its high-technology Infinite Kitchen rollout, with enhanced efficiency, consistency, and long-term labor cost savings as compensating for the added expense.
Yum Brands also had low anticipated exposure, attributing its international team and franchise partners with successfully handling product localization and logistics.

4. Tariff Implications on Coffee Origins
In April 2025, former President Donald Trump rolled out a tit-for-tat tariff policy with variable rates depending on the percentage of tariffs foreign nations charge for U.S. exports. The proposal generated dramatic disparities: Vietnam would be hit with a 46% tariff, China 34%, the European Union 20%, and Latin American nations such as Costa Rica and Colombia a 10% baseline.
This has strategic implications for Starbucks, which sources beans from these tariff-hit countries. While Vietnam’s high rate may restrict future sourcing, Colombia, Peru, and Costa Rica already major supply sources in Starbucks’ basket are less exposed, allowing the company to keep its core product costs stable.
Industry observers think that Starbucks is positioned to escape radical price hikes, partly due to its diverse sourcing model and public commitments by leadership. According to an expert, even with fresh economic challenges, Starbucks would not drive off dedicated customers with blanket price increases on coffee.

5. Dress Code Update and Lawsuit Highlight Discrimination Issues
While refining its pricing and procurement practices, Starbucks is also under fire on worker culture and public accountability. A new dress code for baristas became effective May 12. Employees are now required to wear solid black tops and khaki, black, or blue denim bottoms under the new policy. Company-branded shirts are being issued to promote consistency among stores.
The formal rationale revolves around building a cohesive customer experience and simplifying expectations for employees. Nevertheless, others have challenged the functional worth of this update, particularly in light of larger operating issues such as price transparency and efficiency in services.
At the same time, Starbucks is also threatened with a high-profile discrimination case brought by Joel Gabriel Johnson, a longtime Starbucks Rewards member and stockholder. Johnson claims that he was treated with racially discriminatory behavior at a Tacoma, Washington store when he attempted to use the restroom prior to making a purchase.
As a man of mixed African American ancestry, Johnson was accosted loudly and aggressively by a white female co-worker who asked him whether he was going to shop there, something he says is never asked white customers. When Johnson asked for a manager, he was told to leave. Outside, as he was protesting perceived unequal treatment, he was reportedly attacked by a fellow customer and then misrepresented to police by store staff as a threat.
The complaint contains allegations of:
- Racial profiling and discrimination
- Retaliation for protected speech
- Negligent hiring and training
- Emotional distress
- False reporting and defamation
Johnson was allegedly surrounded by police officers and forced to sign a trespass order, even though he had called 911 himself to report the assault. He subsequently complained to the Tacoma Police Department and Starbucks’ shareholder relations, citing the lack of apology or investigation by the company. Johnson has subsequently called for peaceful demonstrations on Juneteenth using hashtags such as #NoJusticeNoCoffee and #ShutStarbucksDown.
The suit not only highlights possible discrepancies in the application of company policy but also calls into question Starbucks’ stated dedication to equity and inclusion. Johnson alleges the experience has put his foster care certification and public service aspirations in jeopardy, contending the internal culture at the company has not changed after decades of stated commitments.