Starbucks
Founding
The first Starbucks was opened in Seattle, Washington, on March 31, 1971, by three partners who met while they were students at the University of San Francisco : English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker were inspired to sell high-quality coffee beans and equipment by coffee roasting entrepreneur Alfred Peet after he taught them his style of roasting beans.
Bowker recalls that Terry Heckler, with whom Bowker owned an
advertising agency, thought words beginning with "st" were powerful. The
founders brainstormed a list of words beginning with "st," and
eventually landed on "Starbo," a mining town in the Cascade Range. From there, the group remembered "Starbuck," the name of the chief mate in the book Moby Dick. Bowker said, "Moby-Dick didn't have anything to do with Starbucks directly; it was only coincidental that the sound seemed to make sense.
The first Starbucks store was located in Seattle at 2000 Western
Avenue from 1971–1976. This cafe was later moved to 1912 Pike Place. During this time, the company only sold roasted whole coffee beans and did not yet brew coffee to sell. During their first year of operation, they purchased green coffee beans from Peet's then began buying directly from growers.
Sale and Expansion
in 1984, the original owners of Starbucks, led by Jerry Baldwin , purchased Peet's. During the 1980s, total sales of coffee in the US were falling, but sales of specialty increased, forming 10% of the market in 1989, compared with 3% in 1983. By 1986, the company operated six stores in Seattle and had only just begun to sell espresso coffee.
In 1987, the original owners sold the Starbucks chain to former manager, Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and quickly
began to expand. In the same year, Starbucks opened its first locations
outside Seattle at Waterfront station in vancouver, British Columbia, and Chicago, Illinois. By 1989, 46 stores existed across the Northwest and Midwest, and annually Starbucks was roasting over 2,000,000 pounds (907,185 kg) of coffee.
At the time of its Initial Public Offering (IPO) on the stock market in June 1992, Starbucks had 140 outlets, with a revenue of US$ 73.5
million, up from US$1.3 million in 1987. The company's market value was
US$271 million by this time. The 12% portion of the company that was
sold raised around US$25 million for the company, which facilitated a
doubling of the number of stores over the next two years. By September 1992, Starbucks's share price had risen by 70% to over 100 times the earnings per share of the previous year.
In July 2013, over 10% of in-store purchases were made on customer's mobile devices using the Starbucks app.
The company once again utilized the mobile platform when it launched
the "Tweet-a-Coffee" promotion in October 2013. On this occasion, the
promotion also involved Twitter
and customers were able to purchase a US$5 gift card for a friend by
entering both "@tweetacoffee" and the friend's handle in a tweet.
Research firm Keyhole monitored the progress of the campaign and a
December 6, 2013, media article reported that the firm had found that
27,000 people had participated and US$180,000 of purchases were made to
date. As of 2018, Starbucks is ranked 132nd on the Fortune 500 list of the largest United States corporations by revenue.
In July 2019, Starbucks reported "fiscal third-quarter net income
of $1.37 billion, or $1.12 per share, up from $852.5 million, or 61
cents per share, a year earlier." The company's market value of $110.2
billion increased by 41% in the mid of 2019. The earnings per share in
quarter three were recorded 78 cents, much more than the forecast of 72
cents.
Expansion to new markets and products
The first Starbucks location outside North America opened in Tokyo, Japan , in 1996.
On December 4, 1997, the Philippines became the third market to open
outside North America with its first branch in the country located at
6750 Ayala Building in Makati City, Philippines. Starbucks entered the U.K. market in 1998 with the $83 million USD acquisition of the then 56-outlet, UK-based Seattle Coffee Company, re-branding all the stores as Starbucks.
In 1999, Starbucks experimented with eateries in the San
Francisco Bay area through a restaurant chain called Circadia. After
people learned that these restaurants were owned by Starbucks, Starbucks
converted the restaurants to Starbucks cafes.
Australia's first Starbucks store opened in July 2000 in Sydney.
After a massive downturn in 2008, the remaining Australian Starbucks
stores were purchased in 2014, with the company planning a more
restrained expansion.
In September 2002, Starbucks opened its first store in Latin America, at Mexico City. Currently, there are over 500 locations in Mexico and there are plans for the opening of up to 850 by 2018.
In October 2002, Starbucks established a coffee trading company in Lausanne, Switzerland to handle purchases of green coffe . All other coffee-related business continued to be managed from Seattle.
In April 2003, Starbucks completed the purchase of Seattle's Best Coffe and Torrefazione Italia from AFC Enterprises for $72m. The deal only gained 150 stores for Starbucks, but according to the seattle Post Intelligencer, the wholesale business was more significant. In September 2006, rival Diedrich coffe
announced that it would sell most of its company-owned retail stores to
Starbucks. This sale included the company-owned locations of the
Oregon-based coffe people chain. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland International Airport Coffee People locations were excluded from the sale.
In August 2003, Starbucks opened its first store in South America in Lima, Peru. In 2007, the company opened its first store in Russia, ten years after first registering a trademark there. In 2008, they purchased the manufacturer of the clover brewing system .
They began testing the "fresh-pressed" coffee system at several
Starbucks locations in Seattle, California, New York, and Boston.
In early 2008, Starbucks started a community website, My Starbucks
Idea, designed to collect suggestions and feedback from customers. Other
users comment and vote on suggestions. Journalist Jack Schofield noted
that "My Starbucks seems to be all sweetness and light at the moment,
which I don't think is possible without quite a lot of censorship."
In May 2008, a loyalty program was introduced for registered users of the Starbucks Card (previously simply a gift card) offering perks such as free Wi-fi Internet access, no charge for soy milk and flavored syrups, and free refills on brewed drip coffee, iced coffee, or tea. In 2009, Starbucks began beta testing its mobile app for the Starbucks
card, a stored value system in which consumers access pre-paid funds to
purchase products at Starbucks. Starbucks released its complete mobile platform on January 11, 2011.
On November 14, 2012, Starbucks announced the purchase of Teavana for US$620 million in cash and the deal was formally closed on December 31, 2012. On February 1, 2013, Starbucks opened its first store in Ho Chi Minh City, Vietnam, and this was followed by an announcement in late August 2013 that the retailer will be opening its inaugural store in Colombia.
The Colombian announcement was delivered at a press conference in
Bogota, where the company's CEO explained, "Starbucks has always admired
and respected Colombia's distinguished coffee tradition."
In May 2014, the Starbucks operations in South Korea launched a
mobile ordering system named Siren Order, which is accessible through a
local version of Starbucks smartphone application. Starbucks in the U.S. later launched a similar system named Mobile
Order & Pay, starting with Portland, Oregon in December 2015.
The service have since expanded nationwide, and in late March 2018, the
company opened the system (previously available to Starbucks Rewards
members only) to all customers.
In August 2014, Starbucks opened their first store in Williamsburg, Brooklyn. This location will be one of 30 Starbucks stores that will serve beer and wine. In September 2014, it was revealed that Starbucks would acquire
the remaining 60.5 percent stake in Starbuck Coffee Japan that it does
not already own, at a price of $913.5 million.
In August 2015, Starbucks announced that it will enter Cambodia,
its 16th market in the China/Asia Pacific region. The first location
will open in the capital city of Phnom Penh by the end of 2015. In February 2016, Starbucks announced that it will enter Italy,
its 24th market in Europe. The first location will open in Milan by
2018. In August, st startup company FluxPort introduced Qi inductive charging pads at select locations in Germany.
In September 2016, Starbucks announced a debut of its first-ever
original content series called "Upstanders" which aims to inspire
Americans with stories of compassion, citizenship, and civility. The
series features podcasts, written word, and video, and will be
distributed via the Starbucks mobile app, online, and through the
company's in-store digital network.
On July 27, 2017, Starbucks acquired the remaining 50% stake in
their Chinese venture from long-term joint venture partners
Uni-President Enterprises Corporation (UPEC) and President Chain Store
Corporation (PCSC).
On March 21, 2018, Starbucks announced that it is considering the use of blockchain
technology with an idea to connect coffee drinkers with coffee farmers
who eventually can take advantage of new financial opportunities. The pilot program is going to start with farmers in Costa Rica, Colombia and Rwanda in order to develop a new way to track the bean to cup journey.
On June 19, 2018, Starbucks announced the closing of 150
locations in 2019, this is three times the number the corporation
typically closes in a single year. The closings will happen in urban areas that already have dense clusters of stores. In 2018, Starbucks expanded its partnership with uber eats to bring its beverages to U.S. customers' doorsteps, as it had already done for some time in China.
Corporate governance
In 2006, Starbucks's chairman at the time, Howard Schultz, talked about making sure growth does not dilute the company's culture. Howard Schultz served as the company's CEO until 2000. Orin C. Smith was President and CEO of Starbucks from 2001 to 2005.
In January 2008, Schultz resumed his roles as President and CEO after an eight-year hiatus, replacing Jim Donal,
who took the posts in 2005 but was asked to step down after sales
slowed in 2007. Schultz aims to restore what he calls the "distinctive
Starbucks experience" in the face of rapid expansion. Analysts believe
that Schultz must determine how to contend with higher materials prices
and enhanced competition from lower-priced fast food chains, including McDonald's and Dunkin Donuts .
Starbucks announced it would discontinue the warm breakfast sandwich
products they originally intended to launch nationwide in 2008 and
refocus on coffee, but they reformulated the sandwiches to deal with
complaints and kept the product line.
As of January 2015, the chief operating officer
of Starbucks was Troy Alstead, though at that time he announced he was
taking an extended leave of absence of undetermined length. Subsequently, kevin Johnson was appointed to succeed Alstead as president and COO.
In October 2015, Starbucks hired its first Chief Technology Officer, Gerri Martin-Flickinger, to lead their technology team. In April 2017, Schultz became executive chairman of Starbucks with Johnson becoming President and CEO.
Starbucks maintains control of production processes by
communicating with farmers to secure beans, roasting its own beans, and
managing distribution to all retail locations. Additionally, Starbucks's
Coffee and Farmer Equity Practices require suppliers to inform
Starbucks what portion of wholesale prices paid reaches farmers.
Starbucks Corporation is
an American coffe company and coffeehouse chain. Starbucks was founded
in Seattle, Washington in 1971. As of early 2019, the company operates
over 30,000 locations worldwide.
Starbucks
has been described as the main representative of second wave coffe, a
retrospectively termed movement that popularized artisanal coffee,
particularly darkly roasted coffee. Since the 2000s, third wave coffe
makers have targeted quality-minded coffee drinkers with hand-made
coffee based on lighter roasts, while Starbucks nowadays uses automated
espresso machines for efficiency and safety reasons.
Starbucks locations
serve hot and cold drinks, whole-bean coffee, microground instant
coffee known as VIA, espresso, caffe late, full- and loose-leaf teas
including Teavana tea products, Evolution Fresh juices, Frappuccino
beverages, La Boulange pastries, and snacks including items such as
chips and crackers; some offerings (including their annual fall launch
of the Pumpkin Spice Latte)
are seasonal or specific to the locality of the store. Many stores sell
pre-packaged food items, hot and cold sandwiches, and drinkware
including mugs and tumblers; select "Starbucks Evenings" locations offer
beer, wine, and appetizers. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks are also sold at grocry stores.
Starbucks first became profitable in Seattle in the early 1980s.
Despite an initial economic downturn with its expansion into the Midwest
and British Columbia in the late 1980s, the company experienced
revitalized prosperity with its entry into California in the early
1990s. The first Starbucks location outside North America opened in
Tokyo in 1996; overseas properties now constitute almost one-third of
its stores. The company opened an average of two new locations daily between 1987 and 2007. In 2010, the company began its Strabuck Reserve
program for single-origin coffees and high-end coffee shops. Starbucks
operates five roasteries with tasting rooms and 43 coffee bars as part
of the program.
On December 1,
2016, Howard Schultz announced he would resign as CEO effective April
2017 and would be replaced by Kevin Johnson. Johnson assumed the role of
CEO on April 3, 2017, and Howard Schultz retired to become Chairman Emeritus effective June 26, 2018. Starbucks
