Starbucks Order Helps Save Ohio Mug Business

While huge retail and food service chains are often knocked for having a negative impact on smaller, independent businesses, there are ways in which a mega chain can result in a boon for a little guy.

Take, for example, the story of American Mug and Stein in East Liverpool, Ohio, which just finished its largest order ever — 20,000 coffee mugs for Starbucks.

“I’ve been so close to going out of business so many times,” the company’s owner tells NPR, “my accountant … he just doesn’t know where to send the bill sometimes.”

McClellan just completed his biggest order ever — 20,000 mugs for Starbucks. The sturdy, beige mugs are metal-stamped with the coffee giant’s Indivisible brand on the front. They’ll sell for $10 each.

The coffee colossus and its mug supplier opted to make these mugs stateside, even though the order could have been done faster and for less money overseas.

“They’ve come out, they spent time in my factory, they’ve listened. And that has made me really proud to do a good job for them,” the mug maker says about his Starbucks experience.

And it looks like the 20,000 mugs wasn’t a one-time deal, with Starbucks contracting the mug maker to knock out a few thousand more each month. This has allowed him to keep his staff of around 20 people, which is double the number of employees he had before the big order.

“It’s life-changing for me,” he tells NPR. “It’s life-changing for the employees. I have employees here who have been unemployed for six months, a year, a year and a half.”

He and his partners have also bought a closed-down pottery factory nearby that they intend to fit with newer equipment.

Starbucks CEO Howard Schultz says there are other towns out there that could also benefit from companies like his choosing to invest domestically:

There are hundreds of East Liverpools around the country today… These towns have been left for dead. And even though it’s more expensive to manufacture this mug in the U.S. than it would be in China or Korea or Mexico, this is what we need to do.

Starbucks Order Gives Ohio Mug Maker A Jolt [NPR.com]

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  1. Cat says:

    I really hate to say this but -

    Kudos, Starbucks.

  2. Coffee says:

    There are hundreds of East Liverpools around the country today… These towns have been left for dead. And even though it’s more expensive to manufacture this mug in the U.S. than it would be in China or Korea or Mexico, this is what we need to do.
    ”

    The optimist in me says that that this is a refreshing perspective, and that if U.S. companies adopted this kind of attitude, I would be willing to pay a little more for higher quality.

    The pessimist in me sees this and wonders if, in a few years, we’ll be manufacturing the mugs here because our labor will cost the same as Chinese…and the mugs will be selling in China.

    • CubeRat says:

      I’ve been on several business trips to Hong Kong. In many stores, there are signs on products that are “Made in USA” “Made in Germany”. One of the managers there told me to avoid the shampoo and soaps in the hotel and buy something from the stores, as many hotels use products made in China. To many in HK, made in USA has a reputation of better quality, and a higher status.

      • The Porkchop Express says:

        because we don’t just go after the company after they do something. We at least try (sometimes in vain) to prevent the company from doing harm.

    • GrayMatter says:

      Actually, as we and China automate, the costs become a lot more equal. The total labor costs drop, so the fraction of costs from labor becomes smaller.

      The machinery all comes from the same suppliers, and costs the same regardless of the country.

      So, it is becoming cheaper (or at least comparable) to bring manufacturing back into the US once you consider shipping costs.

  3. dolemite says:

    20,000 @ $10 = $200,000. 20 employees…hmmm. Does he simply live in his factory and eat crackers?

    • zigziggityzoo says:

      A standing order of 3000 mugs per month means he’s got enough money to keep the lights running and take orders from other people.

    • caradrake says:

      I got the impression that $10 is how much Starbucks will be selling the mugs for, not how much they’re paying for each. In which case he’s pulling in even less money than that.

      But I could be wrong.

    • GrayMatter says:

      Well, I am guessing that, considering the name of the company, that they have other customers.

    • iesika says:

      The article said 20 employees is double his usual number. Presumably he had some amount of business that was barely breaking even at 10 employees. He’s also not selling them to Starbucks at retail price. The 20,000 mugs was a one time order, and he’s actually looking at an increase of a few thousand mugs a month.

      Not enough info in this article to do the kind of math you were attempting, and what we do have contradicts your figures.

      • dolemite says:

        Well, it stated he basically had no money and was close to shutting down a few times with 10 people. So he hires 2x more workers due to a 20,000 piece job. Something just seems off.

      • bkdlays says:

        I couldn’t of said it better.

  4. CubeRat says:

    I’ll have to start checking my local Starbucks for these. Too Cool, Starbucks.

  5. Sarahlara says:

    Not just good for U.S. jobs but good in terms of avoiding possible lead in Chinese glazes too.

  6. Schildkrote says:

    “Take, for example, the story of American Mug and Stein in East Liverpool, Ohio, which just finished its largest order ever — 20,000 coffee mugs for Starbucks.

    McClellan just completed his biggest order ever — 20,000 mugs for Starbucks. The sturdy, beige mugs are metal-stamped with the coffee giant’s Indivisible brand on the front. They’ll sell for $10 each.”

    It’s the biggest order ever — 20,000 mugs for Starbucks. So nice we had to talk about it twice using the same phrasing — 20,000 mugs for Starbucks.

    • Coffee says:

      Sometimes, when I’m writing a really, really long sentence, inserting clause after interminable clause, I cut a few things out, put a few back in, take some more out, and by the time I’m finished, it looks like a horrific Frankensteinian creation when I am writing a really, really long sentence.

      • dolemite says:

        Sometimes that happens to me, when I write really long sentences, and my mind wanders as I write, and certain words get substrated for others, although if I go back and reread the sentence, I’ll usually catch the errors and try and remember why this always happens when I write really long sentences.

  7. sjb says:

    Just think of it –
    people have a job
    they have money that can be spent
    Starbucks makes money selling to these people (plus others)
    Starbucks can now buy more from them
    more people get a job
    … repeat …

    Basic economics money flow cycle.

  8. ScandalMgr says:

    Cue up those who would complain that the coffee served in said mugs will still taste burnt.

    • raydee wandered off on a tangent and got lost says:

      It’ll taste burnt … burnt like freedom from communism.

      [/LibertyPrimeVoice]

    • madanthony says:

      not if they take them home and fill them with coffee that they made at home.

  9. Costner says:

    The amazing thing is, Starbucks would have sold a Chinese mug for $10 too, so the only difference here is they probably make 50 or 75 cents less per mug (manufacturing costs on many products are much closer than people realize after you factor in transportation costs). So really Starbucks was willing to take a hit in order to keep some Americans working (and likely a bit of free press too… but who cares). Good for them.

    I’m not even a coffee drinker and this makes me want to purchase one of these mugs. I only wish more American companies would realize that when you employ Americans, they actually spend their money here and the effect spurs the economy. When you employ the Chinese or the Indians, you are sending money over there that may very well never come back.

    I for one am willing to spend a bit more to know the product was made here. I realize we can’t build everything, but would I spend 50 cents more on a mug that was made in the US rather than China? You bet… because I would know the workers were spending their paychecks on US soil, and I would have more faith that the clay and glaze used in the mug weren’t carcinogenic… not to mention I would know the people making the mugs were protected with the proper safety gear and that OSHA was in place to ensure they weren’t treated as disposable.

    I know I’m not alone, but perhaps I’m a minority. Based upon what I see when I visit a local Walmart, it seems most people are pretty satisfied with their Made in China cheap plastic crap if for no other reason than it is cheap.

  10. That guy. says:

    They are investing in a new factory, but what if Starbucks doesn’t reorder after the next batch?

    I hope that this somehow leads to other sales for them. Like if Starbucks would have the manfuacturer’s name/website on the bottom of the mugs.

  11. RockerGal says:

    this pains me but… wtg Starbucks, now if they would advertize this they would make themselves look awesome while starting a possible trend… buying stuff made in the USA

    • GrayMatter says:

      Menards (lumber and supply) regularly has a “Made in USA” sale.

    • crispyduck13 says:

      I think that ‘Made In America’ segment on ABC News already started the trend. Starbucks is just running with it. Good for them.

  12. RockerGal says:
  13. Vermont2US says:

    I am always willing to pay more for an American-made product. The quality is often better, plus as others have said here, you don’t need to worry about lead or melamine in the product.

    Once while shopping for tennis balls, I found two brands for sale at Walmart. Both were the same price per unit. One set made in China, the other in the U.S.A., so not everything made in China is less expensive. Of course, I bought American-made.

    • dolemite says:

      My only exception to that rule is cars. I find American cars aren’t as good as foreigns. I think they’ve made a lot of strides in quality in the past few years, while many of the foreigns have stumbled, but honestly, how many times do I look at a Chevy and say “Oh wow…look at that baby..I’d love to have one.” Rarely.

      • bnceo says:

        Gotta look at the details to see exactly the car was made. A good amount of Toyotas are made in factories here in the US. But the corporate overlords are in Japan. I know of some Fords being made in Mexico, but their corporate overlords are in crappy Detroit.

        • notserpmh says:

          Exactly, my wife’s “German” VW Beetle was made in Mexico. Most Hyundai Elantras and Hyundai Sonotas (great cars btw, I have an elantra) are made in Alabama.

          Also, I hear Ford Mustang and all I can think about is my college roommate’s 2001 mustang that would have the spare tire area fill with so much water after a heavy rain, you could hear it sloshing around whenever he turned a corner. Although American cars are getting better, I still prefer “foreign” most cases.

          As one last point, the production of a Toyota Camry employs more US workers than the production of a Ford Escape:

          http://abcnews.go.com/US/made-america-us-made-car-creates-jobs/story?id=13813091#.T9ejE4mioy4

        • MarkFL says:

          Yes, some Fords are made overseas. But the Mustang is definitely made in Flat Rock, Michigan. Mustang enthusiasts are hardcore. If there was even a whisper of making pony cars outside the U.S., there would be rioting in the streets…people storming Dearborn with torches and pitchforks…

      • MarkFL says:

        The problem there is that you’re looking at Chevys. Ford has been upgrading its quality for quite some time now. GM got on the bandwagon only after they found themselves staring at bankruptcy.

    • MarkFL says:

      Doesn’t just apply to small-ticket items. I happen to be a dedicated Mustang guy, because…well, I just am. But I also love that they are not just made by an American company, they are made IN the U.S. Had it for eight years until it was totalled (by a guy driving a POS Chevy, but that’s another story) and it barely ever needed repair. Quality-wise, I’ll put it up against any overrated piece of “precision German engineering” and it cost a hell of a lot less.

      The problems come with products that just aren’t made here. I think Zenith was the last company to make televisions in the U.S., and you can’t buy a PC made anywhere except China, unless you’re up to building your own.

  14. frank64 says:

    It is very easy for him to do this when coffee mugs are peripheral to his business, I bet it is a rounding error on his bottom line. I bet he would very likely make a different decision if he had the option to grow coffee in the US for a the similar difference in price that the manufacturers see.

    I think he did it for all the feel good reasons he said, AND the PR, but holding this out as an example to get Apple to make Iphones here won’t hold much water.

    • dpeters11 says:

      Comparing it to the coffee is a bit unfair, there’s only one state in the US that it can be grown and I do know that they’ve used Hawaiian beans.

      • frank64 says:

        Yes, it would be unfair, that is why I didn’t do it. I said “if he had the option…..” I didn’t see the need to point out that obviously he does not. IF he did, it would most likely be a completely different decision though, seeing as coffee would be a huge cost, and coffee mugs are not to THIS business.

  15. Kuri says:

    Nuts, next time I’m near one I’ll have to stop in and order a drink.

    • Tunnen says:

      Next time you are near one? Where do you live? I pass by at least 30 on my way into work. I don’t think there is a spot anywhere within an hour drive that I would not be within sight of at least one Starbucks.

      Funny side story, I know a couple of baristas that complain that they pass by 6 Starbucks on their way to work at one.

  16. HogwartsProfessor says:

    Darn it! I don’t want to like Starbucks. I don’t buy it just because it’s popular!

  17. unpolloloco says:

    If you really get down to the issue, it often isn’t the “less money” part that causes companies to look overseas. It’s the “faster” part. When it takes a week from a company in China or a month from a company in the US, cost doesn’t matter in most cases.

    • madanthony says:

      companies will also manufacture domestically to protect their IP, or for better quality control.

      The book “Poorly Made in China” is written by a guy who was a consultant for a shampoo company that manufactured in China. At one point, the Chinese manufacturing company decided to stop making the 10 different scents they were supposed to be making and just put all the same scent in different bottles, presumably because it was easier/cheaper. And enforcing a contract in Chinese courts is difficult/impossible.

  18. dush says:

    So if you drink coffee go buy these mugs. Make it worthwhile for this big corporation to support domestic/local suppliers.

  19. yossi says:

    Can a company really expect to stay in business though, with just one customer to pay the bills and payroll?

  20. yossi says:

    I know people always say ‘if I was rich, i would do this and this”

    but

    If I owned a billion dollar company, I would sacrifice half my profits and keep all my manufacturing in the US. So instead of making 500 million in profit, I would be happy with 250 million

  21. DragonThermo says:

    While SBUX is not my favorite coffee, I will need to swing by there and buy a mug just to show my support.

  22. glater says:

    Oh, wow. This IS what they need to do. I have to give them some props for picking a domestic company: it makes their “American opportunities” program seem like it might actually be slightly more than the lip service I expect from absolutely every large company at this point.