Starbucks Stock and the Inconvenient Truth about Union Influence and Frivolous Lawsuits

I recently read an article about how Starbucks (NASDAQ: SBUX) is being sued for discriminating against lactose-intolerant customers, and how this incident could affect Starbucks stock.

No, this is not satire. This is very real. 

CBS News reported that three lactose-intolerant women filed a lawsuit earlier this month against Starbucks.  They claim that an extra charge for non-dairy alternatives is discrimination.

The “excessively high” fee alleged in the suit involves a surcharge on beverages that contain non dairy milks.

To clarify, non-dairy milks typically cost more than regular dairy. Per 2022 data, non-dairy milks run about $7.87 per gallon compared with $4.21 per gallon for cow’s milk.

A couple of things come to mind after reading this…

1. If you don’t want to pay extra for almond milk, go somewhere else. Problem solved!
2. If the company has to pay more for non-dairy milk, of course it has to charge more for it.  Starbucks is not a charity, it’s a business.

I just don’t get it.

If you don’t treat others like delicate flowers, you get sued?

And of course, even if Starbucks did nothing wrong (which it did not), it still has to shell out millions to defend itself. 

So you have to ask yourself…

How Can Starbucks Stock Even Survive?

I won’t lie. 

I’m a bit of a coffee snob.

To me, nothing hits like a proper cup of Ethiopian Yirgacheffe. It’s grown in small batches, free of pesticides, and roasted by seasoned roast masters.

I don’t drink Starbucks. I brew my own coffee with beans from a company working directly with farmer-owned cooperatives.   

I’m so overzealous about it that I once took a research trip to visit coffee plantations in South America.  While I learned a lot about coffee, I also learned a lot about the people who grow it.

You see, most coffee growers don’t get paid very much for their harvests.  

Truth is, commodities are always a race to the bottom.  And unless you’re operating an industrial-sized farm, it’s very difficult to eke out a living.  Most coffee growers can’t even afford to drink their own coffee.  In some cases, they don’t even have the equipment to process it.

So when I hear about a coffee shop being sued because it charges an extra dollar for some soy milk, I get irritated. Not just as a coffee lover and one who respects hard-working coffee growers, but also as an investor.  

Let me explain …

You see, Starbucks is a wildly successful company.

Sure, there are always ups and downs. But historically speaking, Starbucks investors have always done quite well.

In fact, if you bought shares of Starbucks stock 15 years ago, you’d be up about 1,800%.  That’s a compound annual growth rate of 21.7%.  And that doesn’t include dividends. 

Unfortunately, when a company becomes sucessful, it also becomes a target for frivolous lawsuits.  Not to mention union pressure, and these days, a new generation of anti-capitalists.  You know the type.  The kind who believe baristas should be paid $75 an hour while getting massages and foot rubs.

Still, I maintain that in the highly-competitive, low margin restaurant industry, Starbucks is a beast.  It’s also currently undervalued by about 18%.  

Of course, while I’ve always liked Starbucks stock as a long-term investment, it’s not going to earn you fast gains. So if that’s what you’re looking for, consider this new “clean” energy stock my colleague Jason Williams just recommended.

According to Jason, this company just revealed a new technology that can harness an energy source more powerful than the surface of the sun.

That’s not trivial.  Especially when you consider it could actually cover all of the world’s energy needs for 90 billion years.

And here’s the best part …

Because it relies on a stable and renewable power source that’s NOT dependent on the weather (like solar and wind), the government just ponied up $357 million to fund it.

While you could’ve made a 1,800% gain from Starbucks in 15 years, you could potentially make a similar gain in less than three.  Which is why I’m including this download to Jason’s most recent investor note.In it, you’ll learn exactly what this technology is, and of course, how you can buy shares of the company behind it — right now.

To a new way of life and a new generation of wealth…

Jeff Siegel

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Jeff is the founder and managing editor of Green Chip Stocks. For more on Jeff, go to his editor’s page.

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