Starbucks

Starbucks Corporation is an American coffee company and coffeehouse chain. Starbucks was founded in Seattle, Washington in 1971. Today it operates 23,768 locations worldwide, including 13,107 (+170) in the United States, 2,204 (+86) in China, 1,418 (-12) in Canada, 1,160 (+2) in Japan and 872 in South Korea (bumping United Kingdom from 5th place) (Differences reflect growth since Jan 8, 2016). Starbucks is considered the main representative of "second wave coffee", initially distinguishing itself from other coffee-serving venues in the US by taste, quality, and customer experience, while popularizing darkly roasted coffee. Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays used automated espresso machines for efficiency and safety reasons. Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, pastries, and snacks; some offerings (including their Pumpkin Spice Latte) are seasonal or specific to the locality of the store. Many stores sell pre-packaged food items, hot and cold sandwiches, and drinkware including mugs and tumblers; select "Starbucks Evenings" locations offer beer, wine, and appetizers. Starbucks-brand coffee, ice cream and bottled cold coffee drinks are also sold at grocery stores. Starbucks first became profitable in Seattle in the early 1980s, and despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced revitalized prosperity with its entry into California in the early 1990s. The first Starbucks location outside North America opened in Tokyo in 1996; overseas properties now constitute almost one third of its stores. The company had opened an average of two new locations daily between 1987 and 2007. History- Founding: The first Starbucks opened in Seattle, Washington, on March 31, 1971, by three partners who met while they were students at the University of San Francisco: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. The three 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. The company took the name of the chief mate in the book Moby-Dick: Starbuck, after considering "Cargo House" and "Pequod". 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". Someone pulled out an old mining map of the Cascade Range and saw a mining town named "Starbo", which immediately put Bowker in mind of the character "Starbuck". 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 at 2000 Western Avenue from 1971–1976 in Seattle. This cafe was later moved to 1912 Pike Place Market; never to be relocated again. During this time, the company only sold roasted whole coffee beans and did not yet brew coffee to sell. The only brewed coffee served in the store were free samples. During their first year of operation, they purchased green coffee beans from Peet's, then began buying directly from growers. Sale and expansion: In 1984, the original owners of Starbucks, led by Jerry Baldwin, purchased Peet's. During the 1980s, total sales of coffee in the US were falling, but sales of specialty coffee increased, forming 10% of the market in 1989, compared with 3% in 1983. By 1986 the company operated six stores in Seattle and had only just begun to sell espresso coffee. In 1987, the original owners sold the Starbucks chain to former employee Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and quickly began to expand. In the same year, Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois. By 1989, 46 stores existed across the Northwest and Midwest and annually, Starbucks was roasting over 2,000,000 pounds (907,185 kg) of coffee. At the time of its initial public offering (IPO) on the stock market in June 1992, Starbucks had 140 outlets, with a revenue of US$73.5 million, up from US$1.3 million in 1987. The company's market value was US$271 million by this time. The 12% portion of the company that was sold raised around US$25 million for the company, which facilitated a doubling of the number of stores over the next two years. By September 1992, Starbucks' share price had risen by 70% to over 100 times the earnings per share of the previous year. In July 2013, over 10% of in-store purchases were made on customer's mobile devices using the Starbucks app. The company once again utilized the mobile platform when it launched the "Tweet-a-Coffee" promotion in October 2013. On this occasion, the promotion also involved Twitter and customers were able to purchase a US$5 gift card for a friend by entering both "@tweetacoffee" and the friend's handle in a tweet. Research firm Keyhole monitored the progress of the campaign and a December 6, 2013 media article reported that the firm had found that 27,000 people had participated and US$180,000 of purchases were made to date. Expansion to new markets and products: The first Starbucks location outside North America opened in Tokyo, Japan, in 1996. Starbucks entered the U.K. market in 1998 with the $83 million USD acquisition of the then 56-outlet, UK-based Seattle Coffee Company, re-branding all the stores as Starbucks. In September 2002, Starbucks opened its first store in Latin America, at Mexico City. Currently there are over 500 locations in Mexico. In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia. These restaurants were soon "outed" as Starbucks establishments and converted to Starbucks cafes. 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 completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises for $72m. The deal only gained 150 stores for Starbucks, but according to the Seattle Post-Intelligencer the wholesale business was more significant. In September 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks. This sale included the company-owned locations of the Oregon-based Coffee People chain. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland International Airport Coffee People locations were excluded from the sale. In August 2003, Starbucks opened its first store in South America in Lima, Peru. In 2007, the company opened its first store in Russia, ten years after first registering a trademark there. In March 2008 they purchased the manufacturer of the Clover Brewing System. They began testing the "fresh-pressed" coffee system at several Starbucks locations in Seattle, California, New York and Boston. In early 2008, Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers. Other users comment and vote on suggestions. Journalist Jack Schofield noted that "My Starbucks seems to be all sweetness and light at the moment, which I don't think is possible without quite a lot of censorship". The website is powered by Salesforce.com software. In May 2008, a loyalty program was introduced for registered users of the Starbucks Card (previously simply a gift card) offering perks such as free Wi-Fi Internet access, no charge for soy milk and flavored syrups, and free refills on brewed drip coffee, iced coffee or tea. In 2009, Starbucks began beta testing its mobile app for the Starbucks card, a stored value system in which consumers access pre-paid funds to purchase products at Starbucks. Starbucks released its complete mobile platform on January 11, 2011. On November 14, 2012, Starbucks announced the purchase of Teavana for US$620 million in cash and the deal was formally closed on December 31, 2012. On February 1, 2013, Starbucks opened its first store in Ho Chi Minh City, Vietnam, and this was followed by an announcement in late August 2013 that the retailer will be opening its inaugural store in Colombia. The Colombian announcement was delivered at a press conference in Bogota, where the company's CEO explained, "Starbucks has always admired and respected Colombia's distinguished coffee tradition." In August 2014, Starbucks opened their first store in Williamsburg, Brooklyn. This location will be one of 30 Starbucks stores that will serve beer and wine. In September 2014, it was revealed that Starbucks would acquire the remaining 60.5 percent stake in Starbuck Coffee Japan that it does not already own, at a price of $913.5 million. In August 2015, Starbucks announced that it will enter Cambodia, its 16th market in the China/Asia Pacific region. The first location will open in the capital city of Phnom Penh by the end of 2015. In February 2016, Starbucks announced that it will enter Italy, its 24th market in Europe. The first location will open in Milan by 2017. Corporate governance: Starbucks' chairman, Howard Schultz, has talked about making sure growth does not dilute the company's culture and the common goal of the company's leadership to act like a small company. Howard Schultz served as the company's CEO until 2000. Orin C. Smith was President and CEO of Starbucks from 2001 to 2005. In January 2008, Schultz resumed his roles as President and CEO after an eight-year hiatus, replacing Jim Donald, who took the posts in 2005 but was asked to step down after sales slowed in 2007. Schultz aims to restore what he calls the "distinctive Starbucks experience" in the face of rapid expansion. Analysts believe that Schultz must determine how to contend with higher materials prices and enhanced competition from lower-price fast food chains, including McDonald's and Dunkin' Donuts. Starbucks announced it would discontinue the warm breakfast sandwich products they originally intended to launch nationwide in 2008 and refocus on coffee, but they reformulated the sandwiches to deal with complaints and kept the product line. As of January 2015, the chief operating officer of Starbucks was Troy Alstead, though at that time he announced he was taking an extended leave of absence of undetermined length. Subsequently, Kevin Johnson was appointed to succeed Alstead as president and COO. In October 2015, Starbucks hired its first Chief Technology Officer, Gerri Martin-Flickinger, to lead their technology team. 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’ Coffee and Farmer Equity Practices require suppliers to inform Starbucks what portion of wholesale prices paid reaches farmers. Products: In 1994, Starbucks bought 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 as of 2012, Starbucks had annual Frappuccinos sales of over $2 billion. The company began a "skinny" line of drinks in 2008, 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. Starbucks stopped using milk originating from rBGH-treated cows in 2007. In June 2009, the company announced that it would be overhauling its menu and selling salads and baked goods without high-fructose corn syrup or artificial ingredients. This move was expected to attract health- and cost-conscious consumers and will not affect prices. Starbucks introduced a new line of instant coffee packets, called VIA "Ready Brew", in March 2009. 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 fresh brewed coffee. Analysts speculated that by introducing instant coffee, Starbucks would devalue its own brand. Starbucks began selling beer and wine at some US stores in 2010. As of April 2012, it is available at seven locations and others have applied for licenses. In 2011, Starbucks introduced its largest cup size, the Trenta, which can hold 31 ounces. 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. On November 10, 2011, Starbucks Corporation announced that it had bought juice company Evolution Fresh for $30 million in cash and planned to start a chain of juice bars starting in around 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 2012, Starbucks began selling a line of iced Starbucks Refresher beverages that contain an extract from green arabica coffee beans. The beverages are fruit flavored and contain caffeine but advertised as having no coffee flavor. Starbucks' green coffee extraction process involves soaking the beans in water. On June 25, 2013, Starbucks began to post calorie counts on menus for drinks and pastries in all of their U.S. stores. In 2014, Starbucks began producing their own line of "handcrafted" sodas, dubbed "Fizzio". In 2015, Starbucks began serving coconut milk as an alternative to dairy and soy. Tea: Starbucks entered the tea business in 1999 when it acquired the Tazo brand for US$8,100,000. In late 2012, Starbucks paid US$620 million to buy Teavana. As of November 2012, there is no intention of marketing Starbucks' products in Teavana stores, though the acquisition will allow the expansion of Teavana beyond its current main footprint in shopping malls. In January 2015, Starbucks began to roll out Teavana teas into Starbucks stores, both in to-go beverage and retail formats. Coffee quality: Kevin Knox, who was in charge of doughnuts 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. 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. Although pour over coffee options are available at every Starbucks location, the company generally does not advertise them conspicuously, because preparation times are much higher and thus profits are lower than for espresso-based variations. Other products: In 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." Technology: Starbucks launched an update to their mobile app in 2015 labelled Cuerden and Proctor App. The App allows customers to place their orders, pay and pick up. The mobile feature is integrated with Starbuck’s existing mobile app and My Starbucks reward loyalty program. Starbucks Mobile Order is available for customers using a Starbucks app for iPhone (version 3.2) in markets where the feature is available. Starbucks tried launching a delivery service that can be used by a mobile app in Seattle by way of showing an example in 2015. Locations: The company's headquarters is located in Seattle, Washington, United States, where 3,501 people worked as of January 2015. Current: As of June 9, 2016, Starbucks is present in 72 countries and territories. Licensed locations: Independently operated Starbucks locations exist. Stores that independently operate locations include Target, Tom Thumb, and Barnes & Noble. As of 2015, 4,962 licensed locations exist. In 2008, Starbucks continued its expansion, settling in Argentina, Belgium, Brazil, Bulgaria, the Czech Republic and Portugal. European and Scandinavian expansion continued in 2009 with Poland (April), Utrecht, Netherlands (August), and Sweden at Arlanda airport outside Stockholm (October). In 2010, growth in new markets continued. In May 2010, Southern Sun Hotels South Africa announced that they had 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 June 2010, Starbucks opened its first store in Budapest, Hungary and in November the company opened the first Central American store in El Salvador's capital, San Salvador. In December 2010, Starbucks debuted their first ever Starbucks at sea, where with 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. Starbucks is planning to open its fourth African location, after South Africa, Egypt and Morocco, in Algeria. A partnership with Algerian food company Cevital will see Starbucks open its first Algerian store in Algiers. 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. Despite a false start in 2007, in January 2012, Starbucks announced a 50:50 joint venture with Tata Global Beverages called Tata Starbucks. Tata Starbucks will own and operate Starbucks outlets in India as Starbucks Coffee "A Tata Alliance". Starbucks opened its first store in India in Mumbai on October 19, 2012.