Starbucks in Crisis – Part 1

(Feat. Fentanyl, Opioid, China-Mexico Drug Supply Chain, U.S. Coffee Culture, Janssen, Belgium, USA and AliExpress E-commerce)

Starbucks is currently facing a sharp decline in both revenue and operating income. Let’s take a look at what’s really going on. 

1. Starbucks’ crisis began in the United States.

2. The story connects to Janssen Pharmaceuticals, a Belgian company, where founder Paul Janssen once developed an incredibly potent painkiller.

3. That painkiller was fentanyl.

4. Fentanyl has unique molecular properties that allow it to cross the blood-brain barrier much faster than other opioids, amplifying its effects.

5. With a pain-relieving potency over 100 times stronger than morphine, fentanyl became one of the most powerful painkillers ever discovered.

6. Fentanyl’s intensity initially made it useful for treating terminal cancer patients and those with severe chronic pain conditions like Complex Regional Pain Syndrome (CRPS).

7. Eventually, fentanyl became a primary painkiller in hospice care settings, which prioritize managing severe pain.

8. Traditionally, pain management followed a gradual scale from aspirin and Tylenol to moderate opioids like codeine and tramadol, then stronger options like morphine, oxycodone, and fentanyl.

9. But in hospice care, with the focus on easing pain, there was a shift in prescribing practices.

10. Today, it’s increasingly common to skip the initial steps and start with stronger opioids, sometimes leading directly to fentanyl.

11. Fentanyl is so toxic that just 2 mg can be lethal for humans—over 100 times more poisonous than cyanide.

12. The lethal dose of fentanyl would only cover a small portion of that penny.

13. In 2002, Chechen terrorists took hostages at a Moscow theater.

14. Russian anti-terror units used fentanyl gas to subdue the attackers, resulting in the deaths of 130 hostages due to the gas’s potency.

15. Humans feel pain as carbon dioxide (CO₂) levels rise in the blood.

16. This is why holding your breath becomes discomfort—not because of dropping oxygen, but because of increasing CO₂.

17. Fentanyl dulls the body’s CO₂ sensors, so even if you’re not breathing, the body doesn’t send pain signals.

18. This means people taking fentanyl may unknowingly deprive their brain of oxygen, causing brain damage.

19. When a lethal dose of fentanyl is taken, it blocks these CO₂ sensors, leading to respiratory failure.

20. With sensor failure, the central nervous system shuts down, and lack of oxygen ultimately causes death.

21. Naloxone, an antidote for fentanyl overdoses, reactivates the brain’s breathing center, allowing users to breathe again.

22. Naloxone is now a standard supply for U.S. ambulances and police vehicles.

22. When fentanyl’s patent expired in 1981, its price fell, and production spread globally.

23. Because a small amount can produce a powerful high, only about 2 pounds (around 1 kg) of fentanyl can yield over a million doses, making it the most widely used synthetic opioid.

24. Most of fentanyl’s raw materials are produced in China.

25. While China manufactures these ingredients, its strict anti-drug laws prevent domestic drug production.

26. Instead, Chinese suppliers export fentanyl precursors to Mexican drug cartels.

27. Mexican cartels then synthesize fentanyl from these precursors, accounting for about 85% of fentanyl entering the U.S..

28. The U.S. Congress suspects that China is enabling fentanyl’s distribution to the West, calling it a “reverse Opium War.”

29. China is the largest source of fentanyl precursors for the U.S. Some distributors disguise it as health supplements on sites like AliExpress.

30. Fentanyl has gained the nickname “China White” in the U.S. due to its Chinese origin.

31. Now, back to Starbucks. The connection between Starbucks and fentanyl may seem surprising.

32. Recently, Starbucks permanently closed 16 stores in major U.S. cities like Seattle, Los Angeles, and Washington, D.C.

33. The closures followed a rise in fentanyl users entering stores, posing risks to staff and customers.

34. The U.S. is now grappling with a fentanyl crisis so severe that drug users on the streets have become a common sight in major cities.

35. Due to its potency, fentanyl isn’t sold by the gram(or ounces) like other drugs but by the milligram.

36. Tragically, drug users often overdose accidentally because measuring such tiny doses accurately is difficult.

37. Imagine a user buys 1 mg of fentanyl instead of the intended 0.03 mg dose.

38. In the desperation of addiction, they rarely take the time to precisely measure each dose.

39. Drug use also alters time perception.

40. Users often forget when they last took fentanyl, leading to accidental, fatal overdoses.

41. Fentanyl is dangerously easy to consume.

42. Fentanyl absorbs directly through mucous membranes, so no syringe is needed—just touching powdered fentanyl to the lips can cause it to enter the body.

43. Unlike meth, which has a mortality rate of around 2%, fentanyl users face an 11% fatality rate.

44. Today, fentanyl has become the leading cause of death in the U.S., surpassing suicide, car accidents, and even gun-related deaths.

45. According to The Washington Post, fentanyl was the top cause of death for Americans aged 18 to 49 in 2023.

46. Starbucks began as a small shop in Seattle in 1971.

47. In 1981, Howard Schultz, then a customer, visited and fell in love with its coffee.

48. A year later, Schultz joined Starbucks, inspired by the community feel of Italian coffee bars.

49. This inspired the idea of Starbucks as a “third place”—a hub outside of home and work.

50. But with fentanyl affecting communities, the atmosphere at Starbucks has shifted.

51. Post-pandemic remote work has also reduced foot traffic in office-adjacent Starbucks locations.

52. Rising prices have become a concern, too.

53. A tall size Starbucks latte that cost $3.95 in 2020 now costs around $4.95.

54. Add 8.25% sales tax and a potential tip, bringing the total to $5.36.

55. This widening price gap has set Starbucks further apart from lower-cost coffee options.

56. As of September 2024, Starbucks operates 40,199 stores globally.

57. Of these, 7,596 are in China, highlighting its reliance on the Chinese market.

58. A fierce competitor has recently emerged in China. 

Stay tuned for Part 2!