Is the coffee you buy from Costco another brand masquerading as Starbucks? That’s what one customer says in a now-viral video.
Todd Hawkins (@todd.r.hawkins) checks out Costco’s selection of coffee, drawing attention to the Starbucks Pike Place and Verona varieties.
“But is it actually Starbucks?” he questions. “No, no, no, no,” he says, shaking his head.
He then turns one of the bags and reveals the text printed on the side: “Nestlé uses Starbucks trademarks under license.”
“I am not buying Nestlé’s coffee with a Starbucks label on it,” Hawkins declares before ending his video.
Why don’t people support Nestlé?
In the comments section, viewers had smoke for both companies.
One said, “Starbucks [is] trash and I wouldn’t buy anything that’s labeled Starbucks, BUT Nestle,” followed by several surprised and angry emojis.
Another wrote, “After Nestle said that water is not a basic human right I avoid them at all cost. Disgusting company.”
According to Africa Check, the claim that Nestlé does not believe water is a human right appears to come from a statement former chairman and CEO Peter Brabeck made in a 2005 documentary. He said NGOs declaring water a human right was “an extreme solution.” Nestlé and Peter Brabeck have since tried to clarify this. In 2012, he said, “Water required for drinking and basic hygiene is without question a human right.” However, that only makes up 1.5% of global water withdrawal. He believes the other 98.5% of fresh water used for things like carwashes and golf courses is not a human right.
Some commenters noted that the coffee is still Starbucks coffee.
One wrote, “I work in the coffee industry – it is still Starbucks coffee. It’s just licensed by Nestle for distribution. Same with Dunkin – it’s JM Smuckers licensed. Doesn’t mean it isn’t Dunkin.”
“Starbucks gives them the roasting recipe and beans,” another said. “Nestle roasts it and packages it to meet Starbucks requirements and specifications. Either way, I don’t use Starbucks coffee.”
Others noted that if Costco shoppers were looking for Starbucks coffee, they could turn to the membership store’s Kirkland brand.
“Kirkland Signature is Starbucks,” one said.
Is Nestlé’s Starbucks the same as Starbucks?
It’s a lot to take in. Here’s the breakdown.
According to the Associated Press, Nestlé paid Starbucks over $7 billion in 2018 for the rights to “market, sell and distribute bags of Starbucks coffee beans, as well as its instant coffee. Nestle will also sell other brands owned by Starbucks, such as Seattle’s Best Coffee, Teavana tea and Torrefazione Italia coffee, and will be allowed to put the Starbucks brand on Nestle single-serve capsules for coffee machines.”
The agreement excluded bottled drinks like iced Frappuccinos that are sold in and outside of Starbucks locations.
This seems to suggest that most Starbucks coffee you find outside of Starbucks stores is Starbucks coffee, just distributed by Nestlé. However, it appears that the single-serve capsules are Nestlé capsules with the Starbucks label slapped on them. At the time the article was written, Starbucks had a separate deal with JAB to produce Starbucks-branded K-Cup pods for Keurig machines. However, in 2020, Keurig partnered with Nestlé to produce Starbucks K-Cup pods.
Meanwhile, Delish noted that some Kirkland-branded coffee bags include a “Custom roasted by Starbucks” stamp. Some of the varieties include Kirkland’s Signature House Blend Medium Roast, Espresso Blend Dark Roast, and Decaf House Blend Medium Roast.
Why is Starbucks roasting coffee for Costco?
According to Mashed, it’s a common practice called “white labeling.”
Mashed states, “Rather than invest time and money in building their own supply chains and coffee-roasting infrastructure, companies like Costco simply pay established producers to make special batches that are then labeled with the retailer’s packaging. In return, producers get to profit from extra business without affecting their brand or too closely associating themselves with any one chain.”
@todd.r.hawkins Shady coffee at Starbucks.#Starbuck #nestlé #Costco #coffee #fyp ♬ original sound – Todd Hawkins
The Mary Sue contacted Hawkins via TikTok direct message. It contacted Starbucks and Nestlé via email.
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