Starbucks Corporation (NASDAQ: SBUX) is a transnational coffee and coffeehouse chain company based in the United States. Starbucks is the largest coffeehouse company in the world,[1] with 15,011 stores in 44 countries.[2] Starbucks sells drip brewed coffee, espresso-based
hot drinks, other hot and cold drinks, snacks and items such as mugs
and coffee beans. Through the Starbucks Entertainment division and Hear Music
brand, the company also markets books, music, and film. Many of these
products are seasonal or specific to the locality of the store.
Starbucks brand ice cream and coffee are also sold at grocery stores.
From Starbucks’ founding in Seattle, Washington, as a local coffee bean roaster and retailer, Starbucks has expanded rapidly. In the 1990s, the company was opening a new store every workday, a pace that continued into the 2000s.
Domestic growth has since slowed, although the company continues to
expand in foreign markets and is opening 7 stores a day worldwide. The
first location outside of the U.S. and Canada was established in 1996, and they now constitute almost one third of Starbucks’ stores.[3] As of November 2007,
Starbucks had 8,505 company-owned outlets worldwide: 6,793 of them in
the United States and 1,712 in other countries and U.S. territories. In
addition, the company has 6,506 joint-venture and licensed outlets,
3,891 of them in the United States and 2,615 in other countries and
U.S. territories. This brings the total locations (as of November 2007) to 15,011 worldwide.[2]
Starbucks can be found in many popular grocery chains in the U.S. and
Canada, as well as in many airports. Starbucks was recently ranked
number fifteen on the U.S. Environmental Protection Agency’s list of
Top 25 Green Power Partners for purchases of renewable energy.[4]
Starbucks’ corporate headquarters are in Seattle, Washington, United States. As of January 2008, the members of the company’s board of directors are Howard Schultz
(Chair), Barbara Bass, Howard Behar, Bill Bradley, Mellody Hobson,
Olden Lee, James Shennan, Jr., Javier Teruel, Myron Ullman, III, and
Craig Weatherup.
History
The original Starbucks was opened in Seattle, Washington, in 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegel, and writer Gordon Bowker. The three were inspired by Alfred Peet, whom they knew personally, to open their first store in Pike Place Market to sell high-quality coffee beans and equipment. The original Starbucks location was at 2000 Western Avenue from 1971-1976. That store then moved to 1912 Pike Place; it is still open. During their first year of operation, they purchased green coffee beans from Peet’s, then began buying directly from growers.
Entrepreneur Howard Schultz joined the company in 1982, and, after a trip to Milan, advised that the company sell coffee and espresso
drinks as well as beans. The owners rejected this idea, believing that
getting into the beverage business would distract the company from its
primary focus. To them, coffee
was something to be prepared in the home. Certain that there was much
money to be made selling drinks to on-the-go Americans, Schultz started
the Il Giornale coffee bar chain in 1985.
In 1984,
the original owners of Starbucks, led by Baldwin, took the opportunity
to purchase Peet’s (Baldwin still works there today). In 1987,
they sold the Starbucks chain to Schultz’s Il Giornale, which rebranded
the Il Giornale outlets as Starbucks and quickly began to expand.
Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, Canada (which now has more locations than anywhere in the world)[citation needed] and Chicago, Illinois, United States that same year. At the time of its initial public offering on the stock market in 1992, Starbucks had grown to 165 outlets.
The first Starbucks location outside of North America opened in Tokyo in 1996. Starbucks entered the U.K. market in 1998 with the acquisition of the then 60-outlet, UK-based Seattle Coffee Company, re-branding all its stores as Starbucks. By November 2005, London had more outlets than Manhattan,[5] a sign of Starbucks becoming an international brand.
In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia.[6] These restaurants were soon "outed" as Starbucks establishments and converted to Starbucks cafes.
In April 2003, Starbucks completed the purchase of Seattle’s Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, rival Diedrich Coffee
announced that it would sell most of its company-owned retail stores to
Starbucks. This sale includes the company-owned locations of the
Oregon-based Coffee People
chain. Starbucks representatives have been quoted as saying they will
convert the Diedrich Coffee and Coffee People locations to Starbucks
stores.[7][8]
Starbucks’ chairman, Howard Schultz, has talked about making sure growth doesn’t dilute the company’s culture [9] and the common goal of the company’s leadership to act like a small company.
In January 2008, Chairman Howard Schultz
resumed his roles as President and Chief Executive Officer after an
eight year hiatus, and replaced Jim Donald, who took those posts in
2005 but decided to leave the company in late 2007. Schultz’s principal
challenge is 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-price fast food chains, including McDonald’s and Dunkin’ Donuts. [10]
On January 31, 2008, Schultz announced that Starbucks would discontinue
its warm breakfast sandwich products, originally scheduled to launch
nationwide in 2008, in order to refocus the brand on all things coffee.
As Starbucks often tests new products as part of its ongoing
innovation and transformation, Starbucks started testing selling an 8
oz "short" brewed coffee for $1 and giving free refills on all brewed
coffee. This test was limited to the greater Seattle market, with no
plans for expansion to national markets. Per an internal email this
program was cancelled in late March 2008. The normal price for a short
brewed coffee at Starbucks is about $1.50, when Dunkin’ Donuts 10 ounce
coffee runs for $1.39 and McDonalds’ 12 ounce premium coffee is $1.07. [11]
In March 2008, Schultz made several announcements to Starbucks shareholders. Shultz introduced Starbucks’ "state of the art espresso system",,[12] the Thermoplan AG
manufactured Mastrena, which will replace the Verismo 801. Starbucks
also announced that the company hopes to enter the energy drink market
and introduce a customer reward program. Pre-ground beans will also no
longer be sold, in order that the additional grinding of all whole bean
coffee will "bring aroma, romance and theater" to American stores. [13] The company also announced the recent acquisition of The Coffee Equipment Company,[14]
the manufacturer of the Clover Brewing System. They are currently test
marketing this unique "fresh-pressed" coffee system at six Starbucks
locations, three in Seattle, and three in Boston.[15
Products
Starbucks serves a variety of beverages including brewed coffee, hot chocolate, espresso, teas, and Frappuccino. Also available are bottled beverages including Naked Juice, Ethos water, San Pellegrino, Izze soda, and Horizon Organic Milk.
Cappuccinos,
and all other beverages with steamed-milk and/or foam can be customized
to order with pumps of flavored syrups, reasonable temperature changes
and additional espresso shots. Starbucks also offers blended beverages,
such as the "Frappuccino Blended Coffee", a flavored drink of coffee,
milk, and sugar blended with ice. The name is a portmanteau of frappé and cappuccino
and was introduced in 1995. Starbucks markets seasonal beverages as
well, such as the Pumpkin Spice Latte (Thanksgiving), Gingerbread
Latte, Peppermint Mocha, Eggnog Latte (Christmas), and Leprechaun Latte
(St. Patrick's Day). There is also seasonal brewed coffee, like the
"Christmas Blend" of whole bean coffee.
Starbucks supplements the beverage offerings with pastries, ready-to-eat salads and sandwiches, coffee merchandise, at-home brewing equipment, and whole bean coffee.
Starbucks sells a variety of ready-to-eat and drink products that
are kosher, but due to business hours and sandwich products a Starbucks
store cannot be certified 'kosher' according to Jewish law.[16]
Starbucks does not franchise with individuals within North America
but does enter into licensing arrangements with some companies.[17] One example is of Starbucks store locations in airports, most of which are operated by HMSHost, owned by the Italian Autogrill
group. Other licensed locations include grocery stores,theme parks,
major food services corporations, university campuses and hospitals. In
addition, Starbucks has partnered with Magic Johnson’s Johnson Development Corporation to form Urban Coffee Opportunities, which opens retail locations in low-income urban areas.[18]
[edit] Staffing
There are usually from two to six partners (as Starbucks employees are called), all of them trained baristas,
in each retail store at any one time. Black aprons labeled "Coffee
Master" are worn by employees who have completed the Coffee Master
course, which educates employees in not only the tasting, but also
growing regions, roasting, and purchasing (including fair trade practices) aspects of the coffee industry.
In the United States and Canada Starbucks offers full benefits such as health, dental, and vision insurance, as well as stock-option grants and 401(k)
with matching to employees who work an average of at least 20 hours per
week. Each employee can receive a box of tea or a pound (0.45kg) of
coffee each week if they choose. As of 2008, Starbucks was ranked by Fortune
magazine as the 7th best company to work for in the United States, up
from 16th in 2007. In 2006 it was ranked 29th and in 2005 it was 11th.[19] Starbucks was also voted as one of the top ten UK workplaces by the Financial Times in 2007.
"The Third Place"
Starbucks envisions local outlets as a "third place"
(besides home and work) to spend time, and store design is intended to
achieve this. The café section of the store is often outfitted with
stuffed chairs and tables with hard-backed chairs. Most stores provide
free electricity for customers, and many stores also provide wireless
internet access (provided in American stores by AT&T[20] in Canadian stores by Bell Mobility[21] and T-Mobile in the UK.)
The company is noted for its non-smoking policy at almost all of its outlets, despite predictions that this would never succeed in markets such as Germany, which used to have few restrictions on smoking. This has changed in 2007 with many German states issuing smoking bans for restaurants and bars. Outlets in Vienna and Mexico City, which have smoking rooms separated by double doors from the coffee shop itself, and a smoking room upstairs in the Largo do Senado, Macau,
branch are the closest the company has come to making exceptions.
According to the company, the smoking ban is to ensure that the coffee
aroma is not adulterated. The company also asks its employees to
refrain from wearing strong perfumes for similar reasons.[22] Starbucks generally does not prohibit smoking in outside seating areas, unless required by local codes.
Howard Schultz has said, "We’re in the business of human connection and
humanity, creating communities in a third place between home and work."
International operations
Stores are now found in Australia, Austria, The Bahamas, Bahrain, Brazil, Canada, Chile, People’s Republic of China (including Hong Kong & Macau), Cyprus, Czech Republic, Denmark, Egypt, France, Germany, Greece, Indonesia, Ireland, Japan, Jordan, Kuwait, Lebanon, Malaysia, Mexico, The Netherlands, New Zealand, Oman, Peru, Philippines, Puerto Rico, Qatar, Romania, Russia,[23] Saudi Arabia, Singapore, South Korea, Spain, Switzerland, Taiwan, Thailand, Turkey, United Arab Emirates, United Kingdom and the United States of America.
New stores will be opened in Belgium,[24] Argentina,[25] Bulgaria,[26] Colombia,[27] Hungary,[28] Poland,[29] Portugal,[30] & Venezuela [31].
[edit] Intellectual property
Starbucks U.S. Brands, LLC, is a Starbucks-owned company that
currently holds and owns the property rights to approximately 120
Starbucks Coffee Company patents and trademarks. It is located at 2525
Starbucks Way in Minden, Nevada.[32]
The company is named in part after Starbuck, Captain Ahab’s first mate in the book Moby-Dick, as well as a turn-of-the-century mining camp (Starbo or Storbo) on Mount Rainier. According to Howard Schultz’s book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, the name of the company was derived from Moby-Dick,
although not in as direct a fashion as many assume. Gordon Bowker liked
the name "Pequod" (the ship in the novel), but his then creative
partner Terry Heckler responded, "No one’s going to drink a cup of
Pee-quod!" Heckler suggested "Starbo." Brainstorming with these two
ideas resulted in the company being named for the Pequod’s first mate, Starbuck.[33]
International names include:
- Arabic-speaking countries: ستاربكس (transliteration: stārbaks)
- China, Hong Kong, Taiwan: 星巴克 Pinyin: xīngbākè (星 xīng means "star", while 巴克 is a transliteration of "-bucks")
- Israel: סטארבקס (transliteration: sṭārbaqs)
- Japan: スターバックス (transliteration: sutābakkusu, phonological: staa-bahkss)
- Russia: Старбакс (transliteration: Starbaks)
- South Korea: 스타벅스 (transliteration: seutabeokseu), often used in conjunction with the English name
- Quebec, Canada: Café Starbucks Coffee[34] (added the French word to avoid controversy with local language politics)
- Thailand: สตาร์บัคส์ pronounced [sǒtāːbākʰō]
Logo
The logo is a "twin-tailed siren" (the siren of Greek mythology).[35]
The logo has been significantly streamlined over the years. In the
first version, which gave the impression of an authentic 15th century
European woodcut,
the Starbucks siren was topless and had a fully-visible double fish
tail. The image also had a rough visual texture. In the second version,
her breasts were covered by her flowing hair, but her navel
was still visible, and the fish tail was cropped slightly. In the
current version, her navel and breasts are not visible at all, and only
vestiges remain of the fish tails. The original "woodcut" logo can
still be seen on the Starbucks store in Seattle’s Pike Place Market,
and on both the ‘House Blend’ and ‘Decaf House Blend’ Packaging.
At the beginning of September 2006,
Starbucks temporarily reintroduced its original brown logo on paper hot
drink cups. Starbucks has stated that this was done to show the
company’s heritage from the Pacific Northwest and to celebrate 35 years
of business. The vintage logo sparked some controversy due to the
siren’s bare breasts. In September 2006, an elementary school principal
in Kent, Washington reportedly asked teachers to "cover up" the mermaid on the retro cups.[35]
In early April 2008 Starbucks introduced a modified version of its
original brown logo on hot beverage cups and holding sleeves with the
‘Back to Basics’ campaign. The modified version features hair covering
the nipples of the siren.
