Starbucks

Starbucks
Starbucks (Image Source: Unsplash)

Starbucks Corporation is a Seattle, Washington-based global American network of coffee shops and roasteries. It is the biggest network of coffee shops in the world.

The corporation operated 33,833 locations as of November 2021, with 15,444 of them being in the United States. Over 8,900 of Starbucks’ U.S. locations are company-operated, while the other ones are licensed.

Starbucks, which offered a larger range of coffee experiences, is often blamed for the growth of the second wave of coffee culture. Starbucks offers hot and cold beverages, espresso, caffe latte, full and loose-leaf teas, juices, Frappuccino drinks, pastries, and snacks. Whole-bean coffee, micro-ground instant coffee, juices, and pastries are also available.

Some products are available only during certain seasons or in a certain area. The majority of sites offer free Wi-Fi internet connection, depending on the nation.

Starbucks profile

Jerry Baldwin, Zev Siegl, and Gordon Bowker established Starbucks in 1971 at Seattle’s Pike Place Market. They sold the firm to Howard Schultz in the early 1980s, who decided to turn the coffee bean store into a coffee shop offering espresso-based beverages after going on a business trip to Milan, Italy.

During his first stint as CEO, which spanned the years 1986 to 2000, Schultz aggressively expanded the company, first in Seattle and subsequently throughout the whole West Coast of the United States. Orin Smith took over as CEO after Schultz, and during his five years in charge, he established Starbucks as a major player in fair trade coffee, driving up sales to US$5 billion.

Jim Donald oversaw a significant increase in earnings while serving as CEO from 2005 to 2008. During the financial crisis of 2007–2008, Schultz took over again as CEO, and over the ensuing ten years, he increased the firm’s market share, broadened its product line, and refocused the image of the company on CSR. In 2017, Schultz was succeeded as CEO by Kevin Johnson. Starbucks declared in March 2022 that Schultz will take over as CEO once more in April.

Numerous shops also sell genuine Starbucks goods such as mugs, tumblers, scoops, and coffee presses in addition to beverages and snacks. Additional “Starbucks Evenings” sites that serve beer, wine, and snacks exist. In grocery shops in the US and other nations, Starbucks-branded coffee, ice cream, and cold coffee beverages are offered. The business launched its Starbucks Reserve program for single-origin coffees and upscale coffee shops in 2010. By the end of 2017, it intended to build 1,000 Reserve coffee outlets. As part of the initiative, Starbucks runs six roasteries with tasting rooms and 43 coffee bars.

The world’s largest Starbucks outlet, the most recent roastery, debuted on Chicago’s Magnificent Mile in November 2019. Multiple problems with the company’s business methods have been raised. On the other hand, its franchise has attracted a sizable amount of customer loyalty, market share, and corporate value.

The firm is placed 288th on the Forbes Global 2000 and 114th on the Fortune 500.

Starbucks data

TypePublic
IndustryCoffee shop
FoundedMarch 30, 1971; 51 years ago
Pike Place Market, Elliott Bay, Seattle, Washington, U.S.
FoundersJerry Baldwin, Zev Siegl, Gordon Bowker
Key peopleHoward Schultz, interim CEO
Mellody Hobson, Chairperson
Laxman Narasimhan, Designated CEO
HeadquartersSeattle, Washington, United States
ProductsCoffee beverages, SmoothiesTea, Baked goods, Sandwiches
Number of locations34,317 (2022)
Area served84 countries
Revenue IncreaseUS$29.06 billion (2021)
Operating income IncreaseUS$4.87 billion (2021)
Net income IncreaseUS$4.20 billion (2021)
Total assets IncreaseUS$31.39 billion (2021)
Total equity IncreaseUS$−5.32 billion (2021)
Number of employees383,000 partners (2021)
WebsiteStarbucks.com

History

Century 20th

1970s

On March 30, 1971, Starbucks debuted in Seattle, Washington. Business partners Jerry Baldwin, Zev Siegl, and Gordon Bowker formed it; they initially met as University of San Francisco students: Alfred Peet, a businessman who specializes in coffee roasting, gave the group of friends the idea to offer premium coffee beans and accessories. According to Bowker, his business partner Terry Heckler believed that words beginning with the letters “st” were strong, which prompted the founders to compile a list of terms beginning with “st” in the hopes of coming up with a catchy brand name.

From 1971 through 1976, the original Starbucks location was situated at 2000 Western Avenue in Seattle. Later, the café was relocated to 1912 Pike Place. Starbucks outlets did not sell beverages at this time; just coffee beans were available. Peet’s Coffee & Tea supplied Starbucks with green coffee beans for the first two years of its existence. Alfred Peet ceased supplying Starbucks in 1973 and assisted in Jim Reynolds’s training as the company’s new roastmaster.

1980s

Peet’s Coffee was acquired by the founding shareholders of Starbucks, led by Jerry Baldwin, in 1984. In 1986, the business had six locations in Seattle and had started selling espresso coffee. The original proprietors of Starbucks sold the business to Howard Schultz, their former head of marketing, in 1987. Schultz renamed his Il Giornale coffee shops Starbucks and soon started to grow the business.

1990s

At the time of its first public offering in June 1992, Starbucks had 140 locations and generated US$73.5 million in revenue, an increase from US$1.3 million in 1987. By this point, the company’s market worth was $271 million USD. The 12% of the business that was sold brought in about $25 million for the company, allowing it to expand its store count over the following two years. Starbucks’ share price had increased by 70% by September 1992.

Under the Circadia restaurant brand, Starbucks experimented in 1999 by operating eateries in the San Francisco Bay Area. Starbucks changed the name of its Seattle Circadia restaurant to Café Starbucks at the same time.

Century 21st

2000s

For US$72 million in April 2003, Starbucks purchased Seattle’s Best Coffee and Torrefazione Italia from AFC Enterprises. Starbucks only received 150 new locations as a result of the agreement, but the Seattle Post-Intelligencer claims that the wholesale market was more substantial.

Starbucks announced the closure of an additional 300 underperforming locations in January 2009, along with the loss of 7,000 jobs. Additionally, CEO Howard Schultz disclosed that his request to lower his pay had been approved by the board. Between February 2008 and January 2009, Starbucks started closing 977 shops globally and laid off an estimated 18,400 workers in the United States.

2010s

The Ferguson Center at the University of Alabama hosted the opening of the biggest Starbucks in the country in August 2012.

Starbucks started including calorie information on the menus for drinks and pastries in all of its U.S. locations on June 25, 2013.

On June 19, 2018, Starbucks stated that 150 stores will be shutting in 2019, which is three times the usual number of stores the company closes in a single year. The store closings were planned for metropolitan areas with several store clusters.

Starbucks stated in July 2019 that it would stop selling newspapers in its cafes. Additionally mentioned was the removal of whole-bean coffee packets and grab-and-go food kiosks from shops starting in September 2019.

With 200 staff members, Starbucks launched its biggest location to date in Chicago’s Michigan Avenue in November 2019.

2020s

Due of the COVID-19 epidemic, Starbucks shuttered all of its café-only locations in the US on March 20, 2020, for a period of two weeks.

After being suspended for many months owing to Russia’s invasion of Ukraine, Starbucks sold all of its locations in that country to the Russian rapper Timati in August 2022.

Financial summary

YearRevenue
in mil. US$
Net income
in mil. US$
Total Assets
in mil. US$
Average
Price per Share
in US$
Employees
20056,3694943,51413.40115,000
20067,7875644,42917.62145,800
20079,4126735,34414.12172,000
200810,3833165,6737.61176,000
20099,7753915,5777.87142,000
201010,7079466,38613.07137,000
201111,7001,2467,36018.92149,000
201213,2771,3848,21925.63160,000
201314,867811,51733.71182,000
201416,4482,06810,75337.78191,000
201519,1632,75712,41653.25238,000
201621,3162,81814,31356.59254,000
201722,3872,88514,36657.27277,000
201824,7204,51824,15657.50291,000
201926,5093,59919,22081.44346,000
202023,51892829,37582.33349,000
202129,0614,19931,393112.05383,000

Starbucks spokeswoman Valerie O’Neil claimed in 2006 that the company’s emblem is a representation of a “twin-tailed mermaid, or siren as she is known in Greek mythology.” Over time, the logo has undergone significant simplification.

The Starbucks siren had a double fish tail that was clearly visible in the first version and had no top. The image was compared to Melusine and had a rough visual texture as well. Although other academics point out that it appears to be based on a 15th-century woodcut in Juan Eduardo Cirlot’s Dictionary of Symbols, Starbucks claims that the image is based on a 16th-century “Norse” woodcut. Her breasts were concealed by her flowing hair in the second iteration, which was in use from 1987 to 1992, although her navel was still visible.

In a tribute to the alma mater of the three founders, the University of San Francisco, the fish tail was somewhat trimmed, and the predominant colour was altered from brown to green. Her breasts and navel are completely hidden in the third edition, which was in use from 1992 until 2011. Only the faintest traces of the fishtails are still visible. The original “woodcut” emblem has been transferred to Starbucks’s Seattle headquarters.

Starbucks briefly resurrected its classic brown logo on paper hot-drink cups at the start of September 2006 and then again in early 2008. According to Starbucks, this was done to commemorate the company’s 35 years of operation and to demonstrate the company’s Northwest roots. Due in part to the siren’s exposed breasts, the old emblem caused significant criticism, although the brief change received minimal media notice. When Starbucks revived the classic design in 2006, it received comparable criticism. According to a Pulitzer Prize-winning piece by Colbert I. King in The Washington Post in 2002, the emblem was changed when Starbucks entered the Saudi Arabian market in 2000, removing the siren and leaving simply her crown.

Three months later, the business declared that it will start utilising the global logo in Saudi Arabia. The Starbucks wordmark that surrounded the siren would be removed, the siren picture would be enlarged, and it would turn green, according to a January 2011 Starbucks announcement.

Products

Coffee cup sizes

NameMeasurementNotes
Short8 US fl oz (240 ml)Smaller of the two original sizes
Tall12 US fl oz (350 ml)Larger of the two original sizes
Grande16 US fl oz (470 ml)Italian for “large”
Venti20 US fl oz (590 ml) – Hot
26 US fl oz (770 mL) – Iced
Italian for “twenty”
Trenta30 US fl oz (890 ml)Italian for “thirty”

Corporate identity and governance

Since April 2017, Kevin Johnson, who presided over Starbucks as president and COO from 2015 to 2018, has become the company’s CEO. In June 2018, Myron E. Ullman was appointed chairman of the business. Howard Schultz, who held both positions from 2008 to 2017, was followed in both positions by Johnson and Ullman. From 2001 until 2005, Orin C. Smith served as Starbucks’ president and CEO. Jim Donald then assumed that position until 2008. Schultz has been the company’s first Chairman emeritus as of 2018 so far.

Board of directors

As of May 2022:

  • Howard Schultz, president and interim CEO
  • Mellody Hobson, chair of Starbucks, president and co-CEO of Ariel Investments
  • Richard Allison, CEO of Domino’s Pizza
  • Andrew Campion, COO of Nike, Inc.
  • Mary Dillon, chair and former CEO of Ulta
  • Isabel Ge Mahe, executive at Apple Inc.
  • Jørgen Vig Knudstorp, executive chairman of LEGO Group
  • Satya Nadella, CEO of Microsoft
  • Joshua Cooper Ramo, vice chairman and co-CEO of Kissinger Associates
  • Clara Shih, CEO of Salesforce’s Service Cloud business
  • Javier Teruel, former vice-chairman of Colgate-Palmolive

Partnerships

Aeroplan

In Canada, Starbucks has collaborated with Aeroplan to reward consumers who link their Aeroplan and Starbucks accounts with Aeroplan points. Aeroplan members earn points when they deposit money into their Starbucks account.

Apple Inc.

Starbucks has teamed up with Apple Inc. to offer music as part of the “coffeehouse experience.” Apple created a Starbucks Entertainment section to the iTunes Store in October 2006, selling music similar to that found in Starbucks locations. In September 2007, Apple announced that iPhone, iPod Touch, iPad, and MacBook users will be able to browse the iTunes Store through Wi-Fi at Starbucks in the United States without having to log into the Wi-Fi network.

PepsiCo

Starbucks inked a contract with PepsiCo in 2015 to promote and distribute Starbucks goods in a number of Latin American nations.

Spotify

Starbucks announced a collaboration with music streaming provider Spotify in May 2015. The cooperation involves distributing Spotify premium subscriptions to employees in the United States and influencing music played in stores through Spotify playlists. Starbucks also received its own Spotify playlist, which will be available on Spotify’s mobile app.

Uber Eats

Starbucks expanded its relationship with Uber Eats in December 2018 to send its beverages to the doorsteps of U.S. consumers, as it has done for some time in China.

Lyra Health Inc.

Starbucks stated in March 2020 that from April 6, all U.S. workers and their qualified family members will be able to use up to 20 free mental health counselling or coaching sessions each year. They can visit with a counsellor in person or through video conference, and they will have limitless access to self-care applications via Lyra Health Inc.

PayPal/Bakkt

Starbucks consumers now recharge their Starbucks cards with cryptocurrencies such as Bitcoin and Ether thanks to collaborations with financial technology giant PayPal and digital asset management Bakkt.

Disney

On June 19, 2015, a Starbucks opened on Discovery Island at Disney’s Animal Kingdom. Because the park does not allow plastic straws owing to the animals, this outlet serves cold beverages with unique green eco-friendly straws. Following sites in the Magic Kingdom (Main Street, USA), Epcot (Future World), Disney’s Hollywood Studios (Hollywood Boulevard), and two in Disney Springs, this was the sixth Starbucks to open at Walt Disney World (Marketplace and West Side).

Kraft Foods Inc.

In 1998, Starbucks and Kraft Foods formed a collaboration to sell Starbucks goods in Mondelez grocery shops operated by the latter. Starbucks claimed Kraft did not advertise its goods properly and offered Kraft US$750 million to cancel the agreement; however, Kraft refused the offer, and Starbucks proceeded with the termination regardless.

Reactions and feedback

Kevin Knox, who was in charge of doughnuts and quality at Starbucks from 1987 to 1993, reported on his blog in 2010 how George Howell, coffee veteran and inventor of the Cup of Excellence, was disgusted with the dark roasted beans that Starbucks was selling in 1990.

In the throes of a coffee battle, the March 2007 edition of Consumer Reports examined American fast-food chain coffees and put Starbucks behind McDonald’s Premium Roast. Starbucks coffee was described by the magazine as “strong, yet burned and bitter enough to make your eyes wet instead of open.”

According to Time, third wave coffee supporters often blame Starbucks for over-roasting beans.

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