|Founded||March 30, 1971|
Pike Place Market, Elliott Bay, Seattle, Washington, U.S.
|Headquarters||2401 Utah Avenue South, |
Number of locations
|Revenue||US$26.50 billion (2019)|
|US$4.07 billion (2019)|
|US$3.59 billion (2019)|
|Total assets||US$19.21 billion (2019)|
|Total equity||US$1.16 billion (2018)|
Number of employees
|349,000 (September 2020)|
|Footnotes / references|
Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves headquartered in Seattle, Washington. As the world's largest coffeehouse chain, Starbucks is seen to be the main representation of the United States' second wave of coffee culture. As of September 2020, the company had 32,660 stores in 83 countries, including 16,637 company operated stores and 16,023 licensed stores. Of these 32,660 stores, 18,354 were in the United States, Canada, and Latin America. Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, 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 the annual fall launch of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store. Depending on the country, most locations offer free Wi-Fi.
Headquartered in the Starbucks Center, the company was founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker at Seattle's Pike Place Market. During the early 1980s, they sold the company to Howard Schultz who – after a business trip to Milan, Italy – decided to make the coffee bean store a coffeeshop serving espresso-based drinks. Schultz's first tenure as chief executive, from 1986 to 2000, led to an aggressive expansion of the franchise, first in Seattle, then across the West Coast of the United States. Despite an initial economic downturn with its expansion into the Midwestern United States and British Columbia, the company experienced revitalized prosperity with its entry into California in the early 1990s through a series of highly publicized coffee wars. Schultz was succeeded by Orin Smith who ran the company for five years, positioning Starbucks as a large player in fair trade coffee and increasing sales to $5 billion. Jim Donald served as chief executive from 2005 to 2008, orchestrating a large-scale earnings expansion. Schultz returned as CEO during the financial crisis of 2007–08 and spent the succeeding decade growing its market share, expanding its offerings, and reorienting itself around corporate social responsibility. Kevin Johnson took over from Schultz in 2017, and continues to serve as the firm's chief executive.
Many stores sell pre-packaged food items, pastries, hot and cold sandwiches, and drinkware including mugs and tumblers. There are also several select "Starbucks Evenings" locations which offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks are also sold at grocery stores in the United States and other countries. In 2010, the company began its Starbucks Reserve program for single-origin coffees and high-end coffee shops. It planned to open 1,000 Reserve coffee shops by the end of 2017. Starbucks operates six roasteries with tasting rooms and 43 coffee bars as part of the program. The latest roastery location opened on Chicago's Magnificent Mile in November 2019, and is the world's largest Starbucks. The company has received significant and sustained criticism about its business practices, corporate affairs, and role in society. Conversely, its franchise has commanded substantial brand loyalty, market share, and company value.
This section is too long to read comfortably, and needs subsections. (July 2021)
The first Starbucks was opened in Seattle, Washington, on March 30, 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 to 1976. This cafe was later moved to 1912 Pike Place. During this time, Starbucks stores sold just beans and not coffee drinks. During its first year of operation, it purchased green coffee beans from Peet's Coffee & Tea, then began buying directly from growers.
In 1984, the original owners of Starbucks, led by Jerry Baldwin, purchased Peet's Coffee. 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 the company. Also in 1987, Starbucks opened its first locations outside of Seattle in Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois. By 1989, 46 Starbucks stores existed across the Pacific Northwest and Midwest, and the company was roasting more than 2,000,000 pounds (907,185 kg) of coffee annually.
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. By September 1992, Starbucks's share price had risen by 70%.
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 and by 2012, Starbucks had annual Frappuccinos sales of over $2 billion.
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.
In July 2000, the first location in Australia opened in Sydney. After a massive downturn in 2008, the remaining Australian Starbucks stores were sold to the Withers family in 2014, with the company planning a more restrained expansion.
In October 2002, Starbucks established a coffee trading company in Lausanne, Switzerland to handle purchases of green coffee. All other coffee-related business continued to be managed from Seattle.
In April 2003, Starbucks acquired Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises for $72 million. The deal only gained 150 stores for Starbucks, but according to the Seattle Post-Intelligencer, the wholesale business was more significant.
In April 2003, after losing $6 million on the six Starbucks opened between 2001 and 2003, and having struggled with fierce local competition, Starbucks, along with its partner Delek, Starbucks Israel closed all six of its locations in Israel, citing "on-going operational challenges" and a "difficult business environment."
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 July 2007, the Starbucks location in the Forbidden City in Beijing closed. The location was controversial since its opening in 2000 with protesters objecting that the presence of the American chain in this location "was trampling on Chinese culture."
In September 2007, the company opened its first store in Russia, ten years after first registering a trademark there.
In January 2008, Starbucks began a "skinny" line of drinks, offering lower-calorie and sugar-free versions of the company's offered drinks that use skim milk, and can be sweetened by a choice of natural sweeteners (such as raw sugar, agave syrup, or honey), artificial sweeteners (such as Sweet'N Low, Splenda, Equal), or one of the company's sugar-free syrup flavors.
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 March 2008, Starbucks acquired Coffee Equipment Company, 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 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 2008, Starbucks opened in Argentina, Belgium, Brazil, Bulgaria, the Czech Republic, and Portugal.
In July 2008, during the Great Recession, the company 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. Starbucks also announced in July 2008 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, commented that "Starbucks failed to truly understand Australia's cafe culture." In May 2014, Starbucks announced ongoing losses in the Australian market, which resulted in the remaining stores being sold to the Withers Group. 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 March 2009, Starbucks introduced a line of instant coffee packets, called VIA "Ready Brew". It was first unveiled in New York City with subsequent testing of the product also in Seattle, Chicago, and London. The first two VIA flavors include Italian Roast and Colombia, which were then rolled out in October 2009, across the U.S. and Canada with Starbucks stores promoting the product with a blind "taste challenge" of the instant versus fresh roast, in which many people could not tell the difference between the instant and freshly brewed coffee. Financial analysts speculated that by introducing instant coffee, Starbucks would devalue its own brand.
In April 2009, Starbucks opened in Poland.
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 in January 2011. By December 2011, the number of mobile transactions exceeded 26 million.
In 2010, Starbucks began selling beer and wine at some stores in the United States.
In May 2010, Southern Sun Hotels South Africa signed an agreement with Starbucks to brew Starbucks coffees in select Southern Sun and Tsonga Sun hotels in South Africa. The agreement was partially reached so Starbucks coffees could be served in the country in time for the 2010 FIFA World Cup hosted by South Africa.
In December 2010, Starbucks debuted their first-ever Starbucks at sea, wherewith a partnership with Royal Caribbean International; Starbucks opened a shop aboard their Allure of the Seas Royal Caribbean's second-largest ship, and also the second-largest ship in the world.
In January 2011, Starbucks and Tata Coffee, Asia's largest coffee plantation company, announced plans for a strategic alliance to bring Starbucks to India and also to source and roast coffee beans at Tata Coffee's Kodagu facility. In January 2011, Starbucks introduced its largest cup size, the Trenta, which can hold 31 US fluid ounces (920 ml).
In February 2011, Starbucks started selling its coffee in Norway by supplying Norwegian food shops with their roasts. The first Starbucks-branded Norwegian shop opened in February 2012, at Oslo Airport, Gardermoen.
In October 2011, Starbucks opened another location in Beijing, China, at the Beijing Capital International Airport's Terminal 3, international departures hall; making the company's 500th store in China. The store is the 7th location at the airport.
On November 10, 2011, Starbucks acquired juice company Evolution Fresh for $30 million in cash and planned to start a chain of juice bars starting in around the middle of 2012, venturing into territory staked out by Jamba Inc. Its first store released in San Bernardino, California and plans for a store in San Francisco were to be launched in early 2013.
In January 2012, despite a false start in 2007, Starbucks created a 50:50 joint venture with Tata Global Beverages called Tata Starbucks. Tata Starbucks owned and operated Starbucks outlets in India as Starbucks Coffee "A Tata Alliance." Starbucks opened its first store in India in Mumbai on October 19, 2012.
In March 2012, Starbucks began selling a line of iced Starbucks Refresher beverages that contain a green coffee extract. The beverages are fruit flavored and contain caffeine but advertised as having no coffee flavor. Starbucks's green coffee extraction process involves soaking the beans in water.
In August 2012, the largest Starbucks in the US opened at the University of Alabama's Ferguson Center.
In September 2012, Starbucks announced the Verismo, a consumer-grade single-serve coffee machine that uses sealed plastic cups of coffee grounds, and a "milk pod" for lattes.
In October 2012, Starbucks and Duracell Powermat announced a pilot program to install Powermat charging surfaces in the tabletops in selected Starbucks stores in the Boston area. Furthermore, Starbucks announced its support in the Power Matters Alliance (PMA) and its membership in the PMA board, along with Google and AT&T, in an effort to create "a real-world ecosystem of wireless power" through a universal wireless charging standard that customers could use to recharge smartphones.
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 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; a December 2013 media article reported that 27,000 people had participated and US$180,000 of purchases had been made to date.
In August 2013, Starbucks's CEO Howard Schultz personally announced the opening of Starbucks stores in Colombia. The first café was set to open in 2014 in Bogotá and add 50 more stores throughout Colombia's main cities in a 5-year limit. Schultz also stated that Starbucks will work with both the Colombian Government and USAID to continue "empowering local coffee growers and sharing the value, heritage and tradition of its coffee with the world." Starbucks noted that the aggressive expansion into Colombia was a joint venture with Starbucks's Latin partners, Alsea and Colombia's Grupo Nutresa that has previously worked with Starbucks by providing coffee through Colcafe. This announcement came after Starbucks's Farmer Support Center was established in Manizales, Colombia the previous year making Colombia an already established country by the corporation.
In late August 2013, Starbucks announced its first store in Colombia at a press conference in Bogota, where the company's CEO explained, "Starbucks has always admired and respected Colombia's distinguished coffee tradition."
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, the Starbucks operations in South Korea launched a mobile ordering system named Siren Order, accessible through a local version of Starbucks smartphone application. In December 2014, Starbucks launched a similar system named Mobile Order & Pay, in Portland, Oregon. The expanded nationwide in 2015, and in late March 2018, the company opened the system, previously available to Starbucks Rewards members only, to all customers.
In June 2014, Starbucks began producing its own line of sodas, dubbed "Fizzio."
In September 2014, it Starbucks announced the acquisition of the remaining 60.5% stake in Starbucks Coffee Japan that it did not already own, for $913.5 million.
On April 21, 2015, Kesko, the second largest retailer in Finland, announced its partnership with Starbucks, with stores opened next to K-Citymarket hypermarkets. As of June 2017, 3 stores had been opened next to K-Citymarkets: In Sello in Espoo and in Myyrmanni and Jumbo in Vantaa.
On June 19, 2015, a Starbucks opened at Disney's Animal Kingdom on Discovery Island. Since the park does not allow plastic straws due to the animals, this location features special green eco-friendly straws with their cold drinks. This was the sixth Starbucks to open in Walt Disney World, following locations in the Magic Kingdom (Main Street, U.S.A.), Epcot (Future World), Disney's Hollywood Studios (Hollywood Boulevard), and two in Disney Springs (Marketplace and West Side). In addition to these six, there are locations in Disneyland (Main Street, U.S.A.), Disney California Adventure (Buena Vista Street), Anaheim's Downtown Disney, and Disney Village at Disneyland Paris. The Downtown Disney and Disney Springs locations are Starbucks-operated, while the locations inside of the theme parks are Disney-operated.
In February 2016, Howard Schultz announced the opening of stores in Italy. The first Italian Starbucks store was inaugurated in Milan on September 6, 2018, at which point Starbucks already had locations in 78 countries.
In April 2016, after TASTE Holdings acquired outlet licensing for South African stores, Starbucks opened its first stores in South Africa in Rosebank, Gauteng, Johannesburg and the Mall of Africa.
In September 2016, Starbucks announced a debut of its first-ever original content series called "Upstanders," which aimed to inspire Americans with stories of compassion, citizenship, and civility. The series featured podcasts, written word, and video, and was distributed via the Starbucks mobile app, online, and through the company's in-store digital network.
In March 2017, Starbucks announced the launch of two new limited-edition specialty drinks made from beans aged in whiskey barrels at its Seattle roastery. Starbucks's barrel-aged coffee will be sold with a small batch of unroasted Starbucks Reserve Sulawesi beans, which are then hand-scooped into whiskey barrels from Washington state.
In July 2017, Starbucks acquired the remaining 50% stake in its Chinese venture from long-term joint venture partners Uni-President Enterprises Corporation (UPEC) and President Chain Store Corporation (PCSC) for $1.3 billion.
In November 2017, Starbucks commenced operations in Jamaica, where the first store opened in the resort city of Montego Bay on the shores of the world-famous Doctor's Cave Beach Club, offering views of the Caribbean Sea. The company also reaffirmed its commitment to working with local coffee farmers to "implement systems to increase productivity and yields, while also increasing compliance to international standards." Starbucks Jamaica opened its first store on November 21, 2017, with plans to open 15 locations islandwide over a 5-year period. Starbucks Jamaica opened stores at the Sangster International Airport in Montego Bay and at the Historic Falmouth Pier, in Falmouth, Jamaica. Starbucks Jamaica announced its intention to open 2 stores in Kingston, Jamaica in 2018, with plans for up to 6 stores by 2019. The first of the Kingston, Jamaica stores opened on June 21, 2018. The second store is in Kingston's central business district, New Kingston. Starbucks opened its first in-store location in the flagship location for Jamaica's largest Pharmacy chain, Fontana Pharmacy, also located in Kingston; making it Starbucks's third location.
On March 21, 2018, Starbucks announced that it was 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 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.
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 cafes. 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.
On March 20, 2020, due to the COVID-19 pandemic, Starbucks closed all the cafe-only stores in the United States for two weeks. During that time, only drive-thru and delivery-only were to function. According to the company representatives, all workers were to be paid for the next 30 days whether they went to work or stayed home. COVID-19 lockdowns caused Starbucks to suffer a general 10% sales decrease, and a 50% decrease in China where quarantine measures were especially strict.
In June 2020, during the COVID-19 pandemic in the United States, the company announced that it would close 400 of its locations in the US/Canada region over the subsequent 18 months as it moves from the coffee house concept to what it calls "convenience-led" formats with drive-through and curbside pickup; the new stores will work with the Starbucks mobile app for pre-payment by the customer before arrival to pick up the order. The layout of some stores will also be modified with a separate counter for picking up mobile orders. The company also announced that it planned to open 300 stores that will primarily focus on carryout and pickup orders.
In November 2020, Starbucks announced that it plans to open an outlet in Laos.
In December 2020, Starbucks announced that it is planning to increase its store count to about 55,000 by 2030, up from roughly 33,000.
Development since 2005
in mil. US$
in mil. US$
in mil. US$
Price per Share
Coffee cup sizes
|Short||8 US fl oz (240 ml)||Smaller of the two original sizes|
|Tall||12 US fl oz (350 ml)||Larger of the two original sizes|
|Grande||16 US fl oz (470 ml)||Italian for "large"|
|Venti||20 US fl oz (590 ml) - Hot
26 US fl oz (770 mL) - Iced
|Italian for "twenty"|
|Trenta||30 US fl oz (890 ml)||Italian for "thirty"|
Non-dairy milk offerings
In 2007, Starbucks stopped using milk originating from rBGH-treated cows. In June 2009, the company began to sell salads and baked goods without high fructose corn syrup or artificial ingredients. This move was expected to attract health- and cost-conscious consumers and prices.
In 2015, Starbucks began serving coconut milk. In 2016, it began serving almond milk. In January 2020, oat milk became available nationally. The company also offers non-dairy creamers at retail in partnership with Nestle SA.
CEO Kevin Johnson said in a 2020 interview that, milk substitutes will be a big part of reducing carbon emissions. That effort has prompted vegans, environmentalists, people with lactose intolerance and others to urge the company to eliminate the upcharge for drinks made with dairy-free milk. PETA encouraged sit-ins at Starbucks locations and purchased Starbucks stock to draw attention to what they believe is an unfair charge. A Starbucks Canada spokesperson told ET Canada that customizations such as added flavours, non-dairy beverages or an additional shot of espresso, will incur an additional charge.
Ethos water, a brand of bottled water acquired by Starbucks in 2003, is sold at locations throughout North America. Ethos bottles feature prominent labeling stating "helping children get clean water," referring to the fact that US$0.05 from each US$1.80 bottle sold (US$0.10 per bottle in Canada) is used to fund clean water projects in under-developed areas. Although sales of Ethos water have raised over US$6.2 million for clean water efforts, the brand is not incorporated as a charity. Critics have argued that the claim on the label misleads consumers into thinking that Ethos is primarily a charitable organization when it is actually a for-profit brand and only 5 cents per bottle supports clean-water projects. The founders of Ethos have stated that the brand is intended to raise awareness of third-world clean water issues and provide socially responsible consumers with an opportunity to support the cause by choosing Ethos over other brands. Starbucks has since redesigned the American version of the Ethos water bottles, stating the amount of money donated per bottle in the description.
Coffee makers and coffee capsules
In November 2012, Starbucks introduced Starbucks Verismo, a line of coffee makers that brew espresso and regular chocolate from coffee capsules, a type of pre-apportioned single-use container of ground coffee and flavorings utilizing the K-Fee pod system.
In a brief review of the 580 model, Consumer Reports described the results of a comparative test of the Verismo 580 against two competitive brands: "Because you have to conduct a rinse cycle between each cup, the Verismo wasn't among the most convenient of single-serve machines in our coffeemaker tests. Other machines we've tested have more flexibility in adjusting brew-strength—the Verismo has buttons for coffee, espresso, and latte with no strength variation for any type. And since Starbucks has limited its coffee selection to its own brand, there are only eight varieties so far plus a milk pod for the latte."
The company's headquarters is in Seattle, Washington, United States, where 3,501 people worked as of January 2015. The main building in the Starbucks complex was previously a Sears distribution center.
As of September 2020, Starbucks had 32,660 locations spanning 79 countries and territories on six continents:
Licensed and franchise operations
Stores that independently operate locations include Ahold Delhaize, Barnes & Noble, Target Corporation, Albertsons and, more recently, Publix stores. In the EMEA (Europe, Middle East, and Africa) markets, Starbucks operates a franchising program. Different from the licensing program in which existing corporations may apply to operate a Starbucks kiosk within an existing store, franchises can enable new, freestanding stores.
Starbucks has automation systems in some areas. These machines have 280 possible drink combinations to choose from. They have touchscreens and customers can play games while they wait for their order.
In 2009, at least three stores in Seattle were de-branded to remove the logo and brand name, and remodel the stores as local coffee houses "inspired by Starbucks." CEO Howard Schultz called the unbranded stores a "laboratory for Starbucks". The first, 15th Avenue Coffee and Tea, opened in July 2009 on Capitol Hill. It served wine and beer and hosted live music and poetry readings. It has since been remodeled and reopened as a Starbucks-branded store. Another is Roy Street Coffee and Tea at 700 Broadway E., also on Capitol Hill. Although the stores have been called "stealth Starbucks" and criticized as "local-washing," Schultz says that "It wasn't so much that we were trying to hide the brand, but trying to do things in those stores that we did not feel were appropriate for Starbucks."
Starbucks entered the tea business in 1999 when it acquired the Tazo brand for US$8,100,000. In December 2012, Starbucks paid US$620 million to buy Teavana. Starbucks did not market Teavana products in its stores, though the acquisition allowed the expansion of Teavana beyond shopping malls. In January 2015, Starbucks began to roll out Teavana teas into Starbucks stores, both in to-go beverage and retail formats. Starbucks shut down Teavana in early 2018.
Corporate governance and identity
Kevin Johnson, who served as president and chief operating officer from 2015 to 2018, has been the chief executive of Starbucks since April 2017. Myron E. Ullman became the firm's chairman in June 2018. Both Johnson and Ullman succeeded Howard Schultz, who served in both capacities from 2008 to 2017. Orin C. Smith was president and CEO of Starbucks from 2001 to 2005, after which Jim Donald took over as CEO until 2008. Since 2018, Schultz has served as the firm's first Chairman emeritus.
Analysts have long believed that the firm's corporate governance must determine how to contend with higher materials prices and enhanced competition from lower-priced fast-food chains, including McDonald's and Dunkin' Donuts. In October 2015, Starbucks hired its first chief technology officer, Gerri Martin-Flickinger, to lead its technology team. 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.
Board of directors
As of March 2021:
- Howard Schultz, chairman emeritus
- Mellody Hobson, chair of Starbucks, president and co-CEO of Ariel Investments
- Richard Allison, CEO of Domino's Pizza
- Rosalind Brewer, COO of Starbucks
- Andrew Campion, COO of Nike, Inc.
- Mary Dillon, CEO of Ulta
- Isabel Ge Mahe, executive at Apple Inc.
- Kevin Johnson, president and CEO of Starbucks
- Jørgen Vig Knudstorp, former chairman and CEO of LEGO Group
- Satya Nadella, CEO of Microsoft
- Joshua Cooper Ramo, vice chairman and co-CEO of Kissinger Associates
- Clara Shih, CEO and co-founder of Hearsay Social
- Javier Teruel, former vice-chairman of Colgate-Palmolive
In 2006, Valerie O'Neil, a Starbucks spokeswoman, said that the logo is an image of a "twin-tailed mermaid, or siren as she's known in Greek mythology." The logo has been significantly streamlined over the years. In the first version, the Starbucks siren was topless and had a fully visible double fish tail. The image also had a rough visual texture and has been likened to Melusine. The image is said by Starbucks to be based on a 16th-century "Norse" woodcut, although other scholars note that it is apparently based on a 15th-century woodcut in Juan Eduardo Cirlot's Dictionary of Symbols. In the second version, which was used from 1987 to 1992, her breasts were covered by her flowing hair, but her navel was still visible. The fish tail was cropped slightly, and the primary color was changed from brown to green, a nod to the Alma Mater of the three founders, the University of San Francisco. In the third version, used between 1992 and 2011, her navel and breasts are not visible at all, and only vestiges remain of the fish tails. The original "woodcut" logo has been moved to the Starbucks's Headquarters in Seattle.
At the beginning of September 2006, and then again in early 2008, 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 in part to the siren's bare breasts, but the temporary switch garnered little attention from the media. Starbucks had drawn similar criticism when it reintroduced the vintage logo in 2006. The logo was altered when Starbucks entered the Saudi Arabian market in 2000 to remove the siren, leaving only her crown, as reported in a Pulitzer Prize-winning column by Colbert I. King in The Washington Post in 2002. The company announced three months later that it would be using the international logo in Saudi Arabia. In January 2011, Starbucks announced that it would make small changes to the company's logo, removing the Starbucks wordmark around the siren, enlarging the siren image, and making it green.
In 1999, Starbucks started "Grounds for your Garden" to make their business environmentally friendlier. This gives leftover coffee grounds to anyone requesting it for composting. Although not all stores and regions participate, customers can request and lobby their local store to begin the practice. In October 2008, The Sun newspaper reported that Starbucks was wasting 6.2 million U.S. gallons (23.4 million liters) of water a day by leaving a tap constantly running for rinsing utensils in a 'dipper well' in each of its stores, but this is often required by governmental food safety codes.
In June 2009, in response to concerns over its excessive water consumption, Starbucks re-evaluated its use of the dipper well system. In September 2009, company-operated Starbucks stores in Canada and the United States successfully implemented a new water saving solution that meets government health standards. Different types of milk are given a dedicated spoon that remains in the pitcher and the dipper wells were replaced with push button metered faucets for rinsing. This will reportedly save up to 150 U.S. gallons (570 liters) of water per day in every store.
Starbucks began using 10% recycled paper in its beverage cups in 2006—the company claimed that the initiative was the first time that recycled material had been used in a product that came into direct contact with a food or beverage. Allen Hershkowitz of the Natural Resources Defense Council called the 10% content "minuscule," but Starbucks received the National Recycling Coalition Recycling Works Award in 2005 for the initiative. In a 2008 media article, Starbucks's vice president of corporate social responsibility acknowledged that the company continued to struggle with environmental responsibility, as none of its cups were recyclable and stores did not have recycling bins. At the time that the article was published, Starbucks gave customers who brought in their own reusable cup a 10-cent discount, in addition to using corrugated cup sleeves made from 85% post-consumer recycled fiber, which is 34% less paper than the original. During the same period, Starbucks entered into a partnership with Conservation International—pledging US$7.5 million over three years—to help protect the natural environment of coffee-growing communities in Mexico and Indonesia.
Plastic straw ban
On July 9, 2018, Starbucks President and CEO Kevin Johnson announced that Starbucks will ban the single-use plastic straws by January 1, 2020 on all cold drinks from all locations worldwide due to climate change concerns, pollution, and sea turtle endangerment as the single-use plastic straws failed to be designed for recycling when they were invented. Frappucinos will get straws made from a different material that is sustainable and environmentally friendly such as paper or compostable plastic, while other cold drinks will get straw-less lids. However, the new lids will actually have more plastic than the old lid-straw combination but they are recyclable unlike the old lid-single-use straw combination. The Starbucks locations in Europe, China, Taiwan, Japan, Thailand, Vietnam, India, Canada, Hawaii, Alaska, Washington D.C., New Mexico, California, New York, Washington State, New Jersey, Oregon, Maryland, Delaware, Vermont, Massachusetts, Connecticut, and Rhode Island already eliminated plastic straws by the end of 2018. South Korea is the first country to introduce paper straws to all stores among 78 countries in the world that Starbucks has entered.
Starbucks is trying to reduce its use of plastic every year. After successfully completing the campaign to provide the Reusable Cup in Vietnam in 2020, it held the same event in Korea in 2021. Along with a picture of throwing away a cleanly washed recycled PET bottle on Instagram, a hashtag designated by Starbucks was written and uploaded, and a reusable cup was provided instead of a disposable cup. Starbucks is phasing out disposable cups in Korea entirely by 2025.
Farmer equity practices
Starbucks began drafting plans for corporate social responsibility in 1994. Since Starbucks has partnered with Conservation International (CI) to draft plans and audit its coffee and farmer equity (C.A.F.E.) program, Starbucks's C.A.F.E. practices are based on a rating system of 249 indicators. Farmers who earn high overall scores receive higher prices than those who achieve lower scores. Ratings categories include economic accountability, social responsibility, environmental leadership in coffee growing and processing. Indicators for social responsibility have evolved and now include 'zero tolerance' indicators that require workers to be paid in cash, check, or direct deposit, ensure that all workers are paid the established minimum wage, that workplaces are free of harassment and abuse, that workplaces are nondiscriminatory and do not employ persons under the age of 14, and several more. Starbucks has moved 90% of its coffee purchases to preferred C.A.F.E. certified providers, and the company is approaching its stated goal to purchase 100% of its coffee through C.A.F.E. or other 'ethically sourced' certification systems.
Washington State University Assistant Professor Daniel Jaffee argues that Starbucks's C.A.F.E. practices merely 'green wash' "to burnish their corporate image." Additionally, Professor Marie-Christine Renard of Rural Sociology of Chapingo University in Mexico wrote a case study of Starbucks's, Conservation International's, and Agro-industries United of Mexico (AMSA)'s joint conservation effort in Chiapas, Mexico in which she concluded that "[w]hile the CI-Starbucks-AMSA Alliance paid better prices, it did not allow the producers to appropriate the knowledge that was necessary for the organizations to improve the quality of their coffee."
In 2000, the company introduced a line of fair trade products. Of the approximately 136,000 tons[clarification needed] (300 million pounds) of coffee Starbucks purchased in 2006, about 18 million pounds (8.2 million kilograms) or 6% was certified as fair trade. All espresso roast sold in the United Kingdom and Ireland is Fairtrade. Groups such as Global Exchange called for Starbucks to further increase its sales of fair trade coffees.
After a long-running dispute between Starbucks and Ethiopia, Starbucks agreed to support and promote Ethiopian coffees. An article in BBC News, states that Ethiopian ownership of popular coffee designations such as Harrar and Sidamo is acknowledged, even if they are not registered. Ethiopia fought hard for this acknowledgement mainly to help give its poverty-stricken farmers a chance to make more money. In 2006, Starbucks said it paid $1.42 per pound ($3.1/kg) for its coffee, more than 33% higher than the commodity price at the time. However, the coffee Starbucks bought for $1.42 per pound ($3.1/kg), had a selling price—after transportation, processing, marketing, store rentals, taxes, and staff salary and benefits—of $10.99 per pound ($24.2/kg). As of 2013, the Starbucks website sells only one Ethiopian coffee. In addition, Starbucks is an active member of the World Cocoa Foundation.
Food bank donations
Since 2010, Starbucks has been donating leftover pastries in the United States to local food banks through a food collection service named Food Donation Connection. In March 2016, Starbucks unveiled a five-year plan to donate 100 percent of unsold food from its 7,600 company-operated stores in the U.S. to local food banks and pantries. Perishable food will be transported in refrigerated trucks to area food banks through the company's partnerships with the Food Donation Connection and Feeding America. This program, called FoodShare, is expected to provide up to 50 million meals over the next five years. As of 2017, the program was in 10 different markets, including New York City. In New York, Starbucks works with Feeding America and City Harvest, both non-profits, to donate food from 45 locations. It plans to expand the program to all 305 Manhattan stores. In September 2019, 60% of Starbucks stores are participating in FoodShare. This level of participation contributed to 20 million meals served to those in need.
In 2008, Starbucks announced a comprehensive new animal welfare policy banning many inhumane farming practices, including the caging of hens. In 2009, they established a buying preference in North America to use industry best practices for animal husbandry and processing, including egg production.
In 2015, Starbucks made a public announcement that they will switch to 100% cage-free eggs by 2020. However, later, the company altered its commitment to just company-owned locations, excluding around 40% of its licensed restaurants.
In 2018, Starbucks committed to reaching the goal of using 100% cage-free eggs and egg products in company-operated stores globally by 2020, including Starbucks branded products and those supplied to licensed partners in the North America. They stated their goal to be for all their products to meet high quality and ethical standards, with a commitment to social responsibility standards with animal welfare as a primary focus
Organizations such as World Animal Protection and Compassion in World Farming have stated that Starbucks hasn’t shown any demonstrable improvement in animal welfare since 2012. According to the Humane Society of the United States, Starbucks no longer qualifies as having an actual cage-free commitment. Due to Starbucks' failure to meet its own cage-free goals, many nonprofit, charitable organizations have been publicly critical of Starbucks. Amongst the criticism is a current campaign by animal rights and consumer interest group Equitas, which strives to inform Starbucks’ customers of the company’s caged-egg use through a website and other social media actions.
Music, film, and television
Hear Music began as a music catalog company in 1990, adding a few retail locations in the San Francisco Bay Area. Hear Music was purchased by Starbucks in 1999. In 2002, it produced a Starbucks opera album, featuring artists such as Luciano Pavarotti, followed in March 2007 by the hit CD Memory Almost Full by Paul McCartney, making McCartney the first artist signed to the new Hear Music label sold in Starbucks outlets. In 2006, the company created Starbucks Entertainment, one of the producers of the 2006 film Akeelah and the Bee. Starbucks stores advertised the film before its release and sold the DVD.
Starbucks has become the subject of a protest song, "A Rock Star Bucks a Coffee Shop" by Neil Young and his band, Promise of the Real. This single from the album The Monsanto Years criticized both Starbucks's alleged use of genetically modified food and the GMO company Monsanto.
Starbucks has partnered with Apple Inc. to collaborate on selling music as part of the "coffeehouse experience." In October 2006, Apple added a Starbucks Entertainment area to the iTunes Store, selling music similar to that played in Starbucks stores. In September 2007, Apple announced that customers would be able to browse the iTunes Store at Starbucks via Wi-Fi in the US—with no requirement to log into the Wi-Fi network—targeted at iPhone, iPod touch, iPad, and MacBook users. The iTunes Store automatically detects recent songs playing in a Starbucks and offer users the opportunity to download the tracks. Some stores feature LCD screens with the artist name, song, and album information of the current song playing. This feature has been rolled out in Seattle, New York City, and the San Francisco Bay Area, and was offered in limited markets during 2007–2008. During the fall of 2007, Starbucks also began to sell digital downloads of certain albums through iTunes. Starbucks gave away 37 different songs for free download through iTunes as part of the "Song of the Day" promotion in 2007, and a free "Pick of the Week" download is available from the App Store.
Starting on June 1, 2009, the MSNBC morning news program Morning Joe has been presented as "brewed by Starbucks" and the show's logo changed to include the company logo. Although the hosts have previously consumed Starbucks coffee on air "for free" in the words of MSNBC president Phil Griffin, it was not paid placement at that time. The move was met with mixed reactions from rival news organizations, viewed as both a clever partnership in an economic downturn and a compromise of journalistic standards. The endorsement deal ended in August 2013.
Starbucks and Kraft Foods entered into a partnership in 1998 to sell Starbucks products in the Mondelez grocery stores owned by the latter. Starbucks claimed that Kraft did not sufficiently promote its products and offered Kraft US$750 million to terminate the agreement; however, Kraft declined the offer, but Starbucks proceeded with the termination anyway. Starbucks wanted to terminate the agreement because at the time, single coffee packs were beginning to become popular. In their agreement, Starbucks was confined to selling packs that only worked in Kraft's Tassimo machines. Starbucks didn't want to fall behind in the market opportunities for K-Cups. In mid-November 2013, an arbitrator ordered Starbucks to pay a fine of US$2.8 billion to Mondelez International, a corporate spin-off of Kraft, for its premature unilateral termination of the agreement.
In June 2014, Starbucks announced a partnership with Arizona State University (ASU) that would allow Starbucks employees in their Junior and Senior years of college to complete four years of college at Arizona State University's online program for only around $23,000. Starbucks employees admitted into the program will receive a scholarship from the college, that will cover 44% of their tuition. The remaining balance and all other expenses would be paid by the student or through traditional financial aid. In April 2015, Starbucks and ASU announced an expansion of the College Achievement Program. The program would now allow all eligible part-time and full-time employees working in a U.S. Starbucks to enroll in the program for full-tuition reimbursement. After the completion of each semester, Starbucks reimburses the student their portion of the tuition. The student can then use the reimbursement to pay any loans or debt incurred during the semester.
In May 2015, Starbucks entered a partnership with music streaming service Spotify. The partnership entailed giving U.S.-based employees a Spotify premium subscription and to help influence the music played in store via playlists made using Spotify. Starbucks was also given its own curated Spotify playlist to be featured on Spotify's mobile app.
In March 2020, Starbucks announced that starting from April 6, employees could use up to two free mental health therapy sessions for themselves or their family members, such as a partner/spouse or children. They can meet with a counselor face-to-face or video call and will also have unlimited access to self-care apps through Lyra Health Inc.
Reviews and reception
Kevin Knox, who was in charge of doughnuts food quality at Starbucks from 1987 to 1993, recalled on his blog in 2010 how George Howell, coffee veteran and founder of the Cup of Excellence, had been appalled at the dark roasted beans that Starbucks was selling in 1990. Talking to The New York Times in 2008, Howell stated his opinion that the dark roast used by Starbucks does not deepen the flavor of coffee, but instead can destroy purported nuances of flavor.
The March 2007 issue of Consumer Reports compared American fast-food chain coffees and ranked Starbucks behind McDonald's Premium Roast in the middle of a coffee war. The magazine called Starbucks coffee "strong, but burnt and bitter enough to make your eyes water instead of open."
As reported by Time in 2010, third wave coffee proponents generally criticize Starbucks for over-roasting beans. As a result, Starbucks retrained its baristas and changed its roasting methods in 2010 in order to "standardize quality over quantity." The Atlantic reported that this push for higher-quality coffee slowed down orders, but stated "[they] move their product pretty quickly, and with surprising accuracy." Forbes corroborated this trade off between efficiency and quality at Starbucks.
In 2018, Business Insider conducted a test of Starbucks coffee judged by 100 coffee experts. It concluded that although staples of the menu were "too sugary", coffee quality materially improved with particularly strong showings in the firm's iced coffee and nitro cold brew coffee offerings. Insider experts, however, did note that the coffee quality in Starbucks Reserves far surpassed that of the typical retail store.
Parodies and trademark infringements
Starbucks has been a target of parodies and imitations of its logo, particularly the 1992 version, and has used legal action against those it perceives to be infringing its intellectual property.
In 2000, San Francisco cartoonist Kieron Dwyer was sued by Starbucks for copyright and trademark infringement after creating a parody of its siren logo and putting it on the cover of one of his comics, later placing it on coffee mugs, T-shirts, and stickers that he sold on his website and at comic book conventions. Dwyer felt that since his work was a parody it was protected by his right to free speech under U.S. law. The case was eventually settled out of court, as Dwyer claimed he did not have the financial ability to endure a trial case with Starbucks. The judge agreed that Dwyer's work was a parody and thus enjoyed constitutional protection; however, he was forbidden from financially "profiting" from using a "confusingly similar" image of the Starbucks siren logo. Dwyer was allowed to display the image as an expression of free speech, but he can no longer sell it.
Starbucks did not open any stores after first registering its trademark in Russia in 1997, and in 2002 a Russian lawyer successfully filed a request to cancel the trademark. He then registered the name with a Moscow-based company and asked for $600,000 to sell the trademark to Starbucks, but was ruled against in November 2005.
In 2003, Starbucks sent a cease-and-desist letter to "HaidaBucks Coffee House" in Masset, British Columbia, Canada. The store was owned by a group of young Haida men, who claimed that the name was a coincidence, due to "buck" being a Haida word for "young man" (a claim that cannot be substantiated). After facing criticism, Starbucks dropped its demand after HaidaBucks dropped "coffee house" from its name.
In 2005, an anti-Starbucks website, starbuckscoffee.co.uk, which encouraged people to deface the Starbucks logo was transferred to Starbucks, but has since resurfaced at www.starbuckscoffee.org.uk.
In December 2005, Sam Buck Lundberg, who owns a coffee store in Oregon, was prohibited from using "Sambuck's Coffee" on the shop front.
In January 2006, Starbucks won a case against the Xingbake chain in Shanghai, China for trademark infringement, because the chain used a green-and-white circular logo with a name that sounded phonetically similar to the Chinese for Starbucks.
A bar owner in Galveston, Texas, USA won the right to sell "Star Bock Beer" after a lawsuit by Starbucks in 2003 after he registered the name, but the 2005 federal court ruling also stated that the sale of the beer must be restricted to Galveston, a ruling upheld by the Supreme Court in 2007.
In January 2007, Starbucks lost a trademark infringement case against a smaller coffee vendor in South Korea that operates coffee stations under the name Starpreya. The company, Elpreya, says Starpreya is named after the Norse goddess, Freja, with the letters of that name changed to ease pronunciation by Koreans. The court rejected Starbucks's claim that the logo of Starpreya is too similar to their own logo.
In March 2007, Starbucks launched action against an Indian cosmetics business run by Shahnaz Husain, after she applied to register the name Starstruck for coffee and related products. She said she aimed to open a chain of stores that would sell coffee and chocolate-based cosmetics.
In April 2008, Starbucks claimed that Seattle's Rat City Rollergirls logo by a Washington artist was too similar to its own. Starbucks requested an extension to further examine the issue and possibly issue a complaint, which was granted by the Trademark Office. The case was terminated.
In 2009, a cafe in Al-Manara Square, Ramallah, Palestinian Territories, opened with the name "Stars and Bucks" and a logo using a similar green circle and block lettering. Like Starbucks, the Stars and Bucks serves cappuccinos in ceramic cups, and offers free Wifi. According to speculation cited in the Seattle Post Intelligencer, the cafe's name and imitation Starbucks style may be a political satire of American consumerism. Starbucks is not known to have taken action against this business.
In 2014, Nathan Fielder, a Canadian comedian behind Nathan for You, opened a store called "Dumb Starbucks Coffee" in Los Feliz, Los Angeles. The store resembled a typical Starbucks with one exception: everything was preceded by the word "dumb." For example, the drinks he carried included Dumb Skinny Vanilla Lattes and Dumb Frappuccinos. The store carried music titled "Dumb Jazz Standards" and "Dumb Norah Jones Duets." He thought he could bypass infringement and copyright claims through the "Parody Law," referring to the parody aspect of Fair Use laws (that protect parodists such as "Weird Al" Yankovic and SNL). No lawsuits were filed though because the store was short-lived. The Los Angeles Health Department shut it down after 4 days because Fielder lacked the proper permits.
In October 2016, the company prevailed in a trademark infringement case against bongs that look like Frappuccinos, winning over $500,000 after the pipe designer did not show up to court.
In May 2017, a coffee shop in Brooklyn sued Starbucks for $10 million, claiming that its "Unicorn Frappuccino" overshadows the shop's "Unicorn Latte". The case was settled in September 2017.
In November 2017, the company lost a trademark infringement dispute against Morinaga Milk Industry, which used a black-and-white circular logo, with Mount Rainier branding. The case was thrown out by the Intellectual Property Office of Singapore.
Businesses that used the Starbucks logo unaltered and without permission, include a café in Pakistan and a cafe in Cambodia in 2009, the owner saying that "whatever we have done we have done within the law."
Starbucks has been accused of racial bias and discrimination on several occasions.
In 1994, Starbucks settled a lawsuit after two employees were fired because of their race, age, and sex. A black woman filed a suit after her direct supervisor, a regional vice president, said he would like to call her Toby, a slave name which was given to African Kunta Kinte in a TV mini-series “Roots”. Her co-worker spoke on her behalf, after which she was fired.
In 2008, a former African American Starbucks engineer sued the company for discrimination after his supervisor failed to address racist bullying he was experiencing at the workplace, instead giving him extra work due to his complaining. Starbucks settled in 2009.
In 2014, a Milwaukee Starbucks employee called the police when they noticed a black man sleeping in a park, which resulted in the police officer killing the man by shooting him 14 times, prompting protests.
The 2015 Starbucks “Race Together” campaign, when baristas were instructed to write the phrase “Race Together” on customer’s cups with the aim to start a national dialogue about race, was heavily criticized and received backlash.
In 2018, two black men were arrested and escorted out of a Philadelphia Starbucks after the staff called the police because they refused to leave. The video of the incident quickly became viral and sparked widespread outrage.
In another 2018 incident, a black man was denied the code for the restroom for not being a customer, even though at the same time a white man was given that code before ordering anything.
In 2020, Starbucks employees were prohibited from wearing “Black Lives Matter” symbols or phrases on their clothing or accessories.
In 2021, a Starbucks in Ireland was fined €12,000 after a customer received her order with a racist drawing on the cup.
The Equal Employment Opportunity Commission has raised allegations against Starbucks for racial bias in its promotions, allegedly based on workforce data from 2007 to 2011 that showed that minority retail partners in the United States received fewer promotions than statistically expected.
- Coffee culture
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- List of coffee companies
- List of coffeehouse chains
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- Multinational corporation
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