Starbucks
Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. It was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at Seattle's Pike Place Market initially as a coffee bean wholesaler. Starbucks was converted into a coffee shop serving espresso-based drinks under the ownership of Howard Schultz, who was chief executive officer from 1986 to 2000 and led the aggressive expansion of the franchise across the West Coast of the United States.
the company had 35,711 stores in 80 countries, 15,873 of which were located in the United States. Of Starbucks' U.S.-based stores, over 8,900 are company-operated, while the remainder are licensed. It is the world's largest coffeehouse chain. The company is ranked 120th on the Fortune 500 and 303rd on the Forbes Global 2000, as of 2022.
The rise of the second wave of coffee culture is generally attributed to Starbucks, which introduced a wider variety of coffee experiences. Starbucks serves hot and cold drinks, whole-bean coffee, micro-ground instant coffee, espresso, caffe latte, full and loose-leaf teas, juices, Frappuccino beverages, pastries, and snacks. Some offerings are seasonal or specific to the locality of the store. Depending on the country, most locations provide free Wi-Fi Internet access. The company has been subject to multiple controversies related to its business practices. Conversely, its franchise has commanded substantial brand loyalty, market share, and company value.
History
20th century
1970s
Starbucks originally opened in Seattle, Washington, on March 30, 1971. By selling high-quality coffee beans and equipments related, Starbucks became a local coffee bean retailer for the first ten years in Seattle. It was founded by business partners Jerry Baldwin, Zev Siegl and Gordon Bowker who first met as students at the University of San Francisco. The trio were inspired to sell high-quality coffee beans and equipment by coffee roasting entrepreneur Alfred Peet. Bowker recalls that a business partner of his, Terry Heckler, thought words beginning with the letters "st" were powerful, leading the founders to create a list of words beginning with "st", hoping to find a brand name. They chose "Starbo", a misreading of the mining town Storbo in the Cascade Range named after Peter Storbo, founder and president of the Mount Rainier Mining Company. 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 to 1976. The café was later moved to 1912 Pike Place. During this time, Starbucks stores sold just coffee beans and not drinks. In its first two years of operation, Starbucks purchased green coffee beans from Peet's Coffee & Tea. In 1973, Alfred Peet stopped supplying Starbucks and helped train their new Roastmaster, Jim Reynolds.
1980s
In 1984, the original owners of Starbucks, led by Jerry Baldwin, purchased Peet's Coffee. By 1986, the company was operating six stores in Seattle and had begun to sell espresso coffee.In 1987, the original owners sold the Starbucks chain to their former director of marketing Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and began to expand the company. Also in 1987, Starbucks opened its first locations outside of Seattle, in Waterfront Station in Vancouver, British Columbia, and in Chicago, Illinois.
By 1989, there were 46 Starbucks stores located across the Pacific Northwest and Midwest, and the company was roasting more than of coffee annually.
1990s
In June 1992, at the time of its initial public offering, Starbucks had 140 outlets, with 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 enabled it to double its number of stores over the next two years.In 1994, Starbucks acquired The Coffee Connection, gaining the rights to use, make, market, and sell the "Frappuccino" beverage. The beverage was introduced under the Starbucks name in 1995.
In 1999, Starbucks experimented by opening eateries in the San Francisco Bay Area, under the Circadia restaurant brand. At the same time, Starbucks converted its Seattle Circadia restaurant into a Café Starbucks.
In 1999, Starbucks acquired Pasqua Coffee—a San Francisco-based retail coffee chain that had almost 60 locations in San Francisco, Los Angeles, and New York City.
21st century
2000s
In April 2003, Starbucks acquired Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises for US$72 million. The deal only gained 150 stores for Starbucks, but according to the Seattle Post-Intelligencer, the wholesale business was more significant.By June 2003, Starbucks Japan had 466 stores and would add another 70 to 75 in the 2003 financial year. Its president, Yuji Tsunoda said it would install ovens in all stores to improve its food offerings.
From 2005 to 2007, Howard Behar served as the president of Starbucks North America.
In September 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks, including most locations of Oregon-based Coffee People, escalating regional coffee wars. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks. The Coffee People locations at Portland International Airport were excluded from the sale.
In early 2008, Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers. Other users could 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 March 2008, Starbucks acquired Coffee Equipment Company, which was the manufacturer of the Clover Brewing System. It began testing the "fresh-pressed" coffee system at several Starbucks locations in Seattle, California, New York, and Boston.
In July 2008, during the Great Recession, Starbucks announced it was closing 600 underperforming company-owned stores and cutting U.S. expansion plans amid growing economic uncertainty. On July 29, 2008, Starbucks also cut almost 1,000 non-retail jobs as part of its bid to re-energize the brand and boost its profit. Of the new cuts, 550 of the positions were layoffs and the rest were unfilled jobs.
Additionally in July 2008, Starbucks announced that it would close 61 of its 84 stores in Australia in the following month. Nick Wailes, an expert in strategic management of the University of Sydney, said that "Starbucks failed to truly understand Australia's café culture."
In January 2009, Starbucks announced the closure of an additional 300 underperforming stores and the elimination of 7,000 positions. CEO Howard Schultz also announced that he had received board approval to reduce his salary. Altogether, from February 2008 to January 2009, Starbucks terminated an estimated 18,400 U.S. jobs and began closing 977 stores worldwide.
In August 2009, Ahold announced closures and rebranding for 43 of its licensed store Starbucks kiosks for their US-based Stop & Shop and Giant supermarkets.
2010s
In 2012, Starbucks had annual Frappuccino sales of over US$2 billion.In August 2012, the largest Starbucks in the US opened at the University of Alabama's Ferguson Centre.
On June 25, 2013, Starbucks began to post calorie counts on menus for drinks and pastries in all of its U.S. stores.
In July 2013, more than 10% of in-store purchases were made on customers' mobile devices via the.
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; a December 2013 media article reported that 27,000 people had participated and US$180,000 of purchases had been made to date.
In January 2014, as part of a change in compact direction, Starbucks management transitioned from a singular brand worldwide to focusing on locally relevant design for each store.
In May 2014, Starbucks announced ongoing losses in the Australian market, which resulted in all remaining stores being sold to the Withers Group.
In July 2017, Starbucks acquired the remaining 50% stake in its Chinese venture from long-term joint venture partners Uni-President Enterprises Corporation and President Chain Store Corporation for US$1.3 billion.
On March 21, 2018, Starbucks announced that it was considering the use of blockchain technology to connect coffee drinkers with coffee farmers who could eventually be able to take advantage of new financial opportunities. The pilot program was planned to start with farmers in Costa Rica, Colombia, and Rwanda in order to develop a new way to track the bean-to-cup journey. In 2019, at the Microsoft Build conference, the coffee company formally announced its "bean to cup" program using the Microsoft's Azure-based blockchain service.
Two men were arrested in a Philadelphia Starbucks location after a manager claimed the two were trespassing on April 12, 2018. The arrests led to protests due to their apparently racially motivated nature. CEO Kevin Johnson later apologized for the incident, and the company declined to press charges. During the company's second quarter earnings call on April 26, Johnson indicated that the company had not seen a drop in sales as a result of the event and subsequent coverage. The company reiterated its guidance for full year earnings, and beat consensus expectations of 1.8 percent same-store sales growth, with 2 percent growth.
Johnson announced that the company would close some 8000 locations on May 29 for a seminar about racial bias in order to prevent future events similar to those that occurred in Philadelphia.
On June 19, 2018, Starbucks announced the closing of 150 locations in 2019, three times the number the corporation typically closes in a single year. The closings were to happen in urban areas that already have dense clusters of stores.
In July 2019, Starbucks announced that it would no longer be selling newspapers in its cafés. It was also announced that kiosks for grab-and-go snacks and bags of whole-bean coffee would be removed from stores beginning in September 2019.
In November 2019, Starbucks opened its largest store ever on Michigan Avenue, Chicago, with 200 employees.