Starbucks
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| Company type | Public (NASDAQ: SBUX) |
|---|---|
| ISIN | US8552441094  |
| Industry | Restaurants |
| Founded | In 1971 across from Pike Place Market in Seattle, Washington |
| Founder | Gordon Bowker Jerry Baldwin Zev Siegl |
| Headquarters | Seattle, Washington |
Key people | Howard Schultz, Chairman Jim Donald, President & CEO |
| Products | Starbucks Seattle's Best Coffee Frappuccino Tazo Tea Torrefazione Italia Coffee Starbucks Hear Music Pasqua Coffee |
| Revenue |  $5.294 billion USD (2004) |
| 4,617,800,000 United States dollar (2022) | |
| 3,281,600,000 United States dollar (2022) | |
| Total assets | 31,392,600,000 United States dollar (2021) |
Number of employees | 96,700 |
| Website | starbucks.com |
Starbucks (Nasdaq: SBUX, SEHK: 4337), is a large multinational chain of coffee shops, often serving pastries, popular in the U.S. especially among students and young urban professionals. The corporate headquarters are in Seattle, Washington. The company was in part named after Starbuck, a character in Moby-Dick, and its insignia is a stylized cartoon Siren.
According to the company's fact sheet, as of February 2006, Starbucks had 6,216 company-operated outlets worldwide: 5,028 of them in the United States and 1,188 in other countries and U.S. territories. In addition, the company has 4,585 joint-venture and licensed outlets, 2,633 of them in the United States and 1,952 in other countries and U.S. territories.
Company history
The first Starbucks was opened in Seattle in 1971 by three partners, english teacher Jerry Baldwin, history teacher Zev Siegel and writer Gordon Bowker. Wanting to sell high-quality coffee beans and machines, they opened its still-operating first location in Pike Place Market. The three knew Alfred Peet personally and were inspired by him to open a high quality coffee bean retailer. During their first year of operation they purchased green beans from Peet's Coffee & Tea. Entrepreneur Howard Schultz joined the company in 1982 and, inspired by Italian espresso bars he had visited, started the Il Giornale coffee bar chain in 1985. In 1984 the original owners, led by Baldwin, took the opportunity to purchase Peet's. The original owners sold the Starbucks chain to Howard Schultz in 1987. Baldwin went on to run Peet's, where he still works. Schultz's Il Giornale outlets were rebranded as Starbucks. Starbucks opened its first locations in Vancouver, British Columbia (at Waterfront Station) and Chicago, Illinois in 1987. Its first location outside of North America was opened in Tokyo, Japan, in 1996, and now Starbucks has outlets in 30 additional countries. Starbucks entered the U.K. market in 1998 with the acquisition of the then 60-outlet Seattle Coffee Company. All of its stores were then re-branded as Starbucks.
There are currently close to 10,595 locations worldwide, although none, as yet, in Italy, Schultz's original inspiration.
By the time of its initial public offering on the stock market in 1992, it had grown to 165 outlets. In April 2003 Starbucks added 150 new outlets in one day, by completing the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises. As of May 2003, Starbucks operated more than 6,400 locations worldwide. Stung by criticism of the conditions in which its coffee was grown, the company introduced a line of fair trade products, of which there are now three options available.
Despite the criticism it has endured for its purported monopoly on the coffee bean market, Starbucks Coffee Company purchases only 3% of the coffee beans grown worldwide.
Starbucks' success in the U.S. market has often, though not always, been replicated around the world; it has faced competition in markets which are already saturated with coffee products, though Starbucks consistently distinguishes itself with its quality of service and of product. A number of retailers have emulated Starbucks' business model, many owned by former Starbucks employees who have left the company and started their own businesses with the knowledge they gained while with Starbucks.
This rapid proliferation of the company has been the subject of much comment and occasional parody, for instance in the Austin Powers films, The Simpsons, South Park, Shrek 2, and Best in Show. An article in the satirical newspaper The Onion announced that "Starbucks begins sinister phase II of operations." Starbucks had indeed started an expansion plan known as "Phase II." http://www.theonion.com/content/node/28657
As a general rule, Starbucks does not offer promotional prices on its products, which tend to be higher than those of competitors.
There have been a lot of rumours circulated about the origin of the Starbucks name. The correction to the widely circulated mistake about the origin of Starbucks name can be found here.
In 2000 San Francisco cartoonist Kieron Dwyer was sued by Starbucks for copyright and trademark infringement after creating a parody of its famous mermaid logo. Starbucks won a preliminary injunction prohibiting Dwyer from selling items bearing his version of the trademark. The case later settled.
Company pioneer Howard Schultz has written a book, Pour Your Heart Into It, chronicling his perspective on the success of the company.
Starbucks serves a variety of freshly brewed coffees, which rotate on a weekly basis in order to provide customers with an easy way to sample many of its best-selling single-origin coffees and blends. However, most of its revenue does not come from coffee, but from blended products that combine coffee or other flavors with large amounts of milk, sugar, and/or granulated ice. Starbucks whole bean product is roasted in one of two Starbucks' roasting plants, either in Kent, Washington, or York, Pennsylvania. These whole beans are available for purchase at all Starbucks store locations.
Starbucks baristas who don a black apron are known as "Coffee Masters". In addition to comprehensive training in coffee brewing and serving, they are educated in the growing and roasting aspects of the coffee industry.
The company is noted for its non-smoking policy at all its outlets, despite predictions that this would never succeed in markets such as Germany, where there are few restrictions on smoking elsewhere. A single outlet in Vienna, which has a smoking room separated by double doors from the coffee shop itself, is the closest the company has come to making an exception. However, Starbucks generally does not prohibit smoking in outside seating areas.
For similar reasons, the company asks its employees to refrain from using strong perfumes that might adversely affect the coffee aroma in its stores.
Corporate governance
Current members of the board of directors of Starbucks are: Jim Donald, Barbara Bass, Howard Behar, Bill Bradley, Mellody Hobson, Olden Lee, Greg Maffei, Howard Schultz, James Shennan, Javier Teruel, Myron Ullman, and Craig Weatherup.
Inside Starbucks
The baristas (employees are referred to as 'Partners') in each store work in different shifts throughout the day, usually divided into two (AM and PM), or three (morning, afternoon, evening) shifts. Each shift usually has two or four baristas (the number may change, depending on customer flow of the specific store), who share different duties throughout the shift.
Usually, stores are internally divided into the backline, where the baristas work and serve customers; and the back, usually referred to as the back room, bathrooms, and so on. Unless very small, the store also has a café section, where the customers can sit down with their drinks.
Behind the counter, the floor is divided into several sections. These are:
- The POS (Point of Sale, aka The Register) - This is where orders are placed, called, and paid for. Pastries are served from here as well as brewed coffees and teas.
- The Beverage Station - This area is usually broken down into two sections, The Espresso Bar and the Cold Beverage Station.
- The Espresso Bar - This is where most hot beverages are put made/put together, all except for the Coffee of the Week and the brewed tea. A large majority of drinks served at Starbucks go through this station even if they don't require espresso shots.
- The Cold Beverage Station - This is where Frappucino® Blended Coffee Beverages, Frappucino® Blended Creme Beverages, and Iced Teas and Iced Coffees are made and then served. This station is not always manned unless there is a high volume of sales for cold beverages at a specific location or time of the year (i.e. Summer in certain markets). Otherwise the Barista manning the Beverage Station "slides" to the Cold Beverage station as necessary, or alternatively the Barista in the Floater role may slide to assist at the Cold Beverage station if there are a high volume of both hot and cold beverages to be made.
- The Digital Brewer and Pastry Case - These two elements are usually placed close to each other and on the opposite side of the Register/POS than the Espresso bar. The Digital Brewer is where all the Coffees of the Week (COW) are brewed and served from. Due to the lower demand and level of difficulty involved in the pastry station and digital brewer this is never a primary position, unlike the Register and Beverage Station. Usually the employee manning the Register will slide to retrieve items from these stations as necessary, otherwise the floater will handle these stations if they are not more needed elsewhere.
There are three primary roles that Baristas take at the various areas on the floor:
- Register/POS (Point of Sale) – The barista in this station rings up customers and calls drinks, as well as serving pastries from the pastry case and retrieving COW when needed.
- Beverages – The actual "barista" is the one behind the bar that makes espresso drinks. This barista will call out the prepared drinks, and serve them to customers.
- Floater – This barista, as the name implies, floats about the store and takes care of miscellaneous duties, such as making Frappuccino® Blended Beverages, cleaning, filling the milk and shakers, changing the garbage, and tending to customers. This is also referred to as "expediting". The duty of cleaning tables and taking care of the floor is known as 'cafe'.
Other common stations might include a barista at the Frappuccino bar (also known as "Frappland" among baristas), an inventory barista at the back of the store, and others – depending on the local requirements of the store. Busy stores might also have two baristas at one station; this is especially common at the espresso bar on busy days, or the Frappuccino station during the summer. Also, in recent years, Starbucks has begun opening drive-through stores; these stores typically have one to three baristas assigned solely to drive-through.
A regular shift's workers includes the baristas and the shift supervisor, often a more experienced barista promoted to the position. The shift supervisor (referred to as "shift" for short) is in charge of managing the store when the assistant manager is not working. The SS also tends to take the role of the floater, sliding to assist and resolve bottlenecks, as necessary.
In the handbook issued to new employees, the rules as to the conduct and behaviour of employees are written. For example:
- When an employee has another job, other than with Starbucks, he or she must inform the company, who will then decide whether a 'conflict of interest' exists. In the event that the second job is for a rival company, the employee's status with Starbucks may come under question.
- Employees are not allowed to form 'close relationships' with anyone whom they supervise, or by whom they are supervised, and in such an event, one of the pair must be moved to another store.
- Acceptance of gifts or invitations from customers is forbidden, except where refusal 'may cause offence'.
- In line with Starbucks' anti-smoking policy, when staff members take a break and smoke, they must cover the Starbucks logo on their clothes.
The cafe section is often provided with several comfortable stuffed chairs, and several tables with hard backed chairs. There are ample electrical outlets providing free electricity for patrons using or charging their portable music devices or laptop computers. It is not uncommon to see people conducting their work from a Starbucks cafe section for hours at a time.
Starbucks logo
The siren (sometimes referred to as a mermaid, but is more likely to be a melusine since it has two tails) in the Starbucks logo changed over the years, to avoid giving offense. In the first version she had naked breasts and a fully visible double fish tail. In the second, streamlined version, the breasts were covered by hair, but the navel was still visible, and the fish tail was cropped slightly. In the current version, the navel is not visible, and only vestiges remain of the fish tails. The original logo may still be seen on the Starbucks store in Seattle's Pike Place Market.
Starbucks and globalization
Starbucks has pursued an ambitious campaign of expansion in international markets beyond its North American base. As such it has come to be regarded, particularly by the anti-globalization movement, as a poster child of the problems posed by globalization. Several online campaign groups maintain websites decrying the company, criticizing its fair-trade policies, labor relations, environmental impact, and holding it as a paragon of what they see as U.S. cultural and economic imperialism. Branches of Starbucks have been attacked during protests, including those against the WTO (see also WTO Ministerial Conference of 1999 protest activity).
Starbucks franchise is represented by Al Shaya Group in United Arab Emirates. http://www.alshaya.com/index.jsp
Starbucks' focus over the years
Of Starbucks' many drinks, the Starbucks Espresso was the company's first focus. Howard Schultz had suggested that the company should focus on coffee, espresso, and cappuccino after his trip to Milan, but the owners said no. Starbucks was a retailer, not a restaurant or bar. The owners thought that serving espresso drinks would put them into the beverage business instead of the focus of a coffee store.
Hear Music
Hear Music is the brand name of Starbucks' retail music concept. Hear Music began as a catalog company in 1990 and was purchased by Starbucks in 2000.
The Hear Music brand currently has three components: the music that each location plays and accompanying XM radio channel (XM 75); in-store CD sales, including Starbucks exclusives; and specially-branded retail stores.
There is a Starbucks Hear Music Coffeehouse in Santa Monica, California on the Third Street Promenade, there are two recently opened locations: one in Miami, Florida in South Beach and one in San Antonio on the Riverwalk. There is also a Hear Music Store in Berkeley, California. Forty Starbucks locations also have a Hear Music "media bar," a service which uses tablet-based PCs to allow customers to create their own mix CDs. The media bars are currently located in Seattle and in Austin, Texas.
The music section in Chapters, a Canadian retail chain, was at one time a licensed version of the Hear Music concept. The company no longer uses the brand name.
Wireless Internet access
Starbucks offers wireless Internet access at its coffee shops. The service is provided by T-Mobile; and unlike the wireless Internet offered by many independent coffeeshops, it is a fee-based service.
In the United Arab Emirates, wireless Internet access is provided for by [Etisalat]. Starbucks has stores in Sharjah, Dubai and Abu Dhabi and couple of other cities in the U.A.E.
Starbucks in pop culture
Starbucks has had many references in pop culture. Among them:
- In an episode of The Simpsons Bart goes into the mall to get an ear piercing. On his way to the ear piercing place, Bart passes at least two Starbucks, then a soon-to-be-opening Starbucks, all adjacent to each other. When he gets to the ear-piercing place, he tells the guy that he wants his ear pierced, then the guy tells him "Better hurry up! In five minutes, this place is becoming a Starbucks!" Bart then walks out with his new piercing (and a Starbucks beverage) with every single store in the mall a Starbucks.
- The movie Fight Club depicts anti-capitalist guerrillas destroying a chain coffee house (clearly a thinly-veiled Starbucks) similar to the attack on a branch of Starbucks during the WTO meeting in Seattle
- Comedian Lewis Black's rants about "a Starbucks across the street from a Starbucks" in his 2002 special and album The End of the Universe. One of the stores referred to by Black is located at Westheimer Rd and Post Oak Blvd in Houston which is across from the Galleria Mall which has two locations. Two fictional Starbucks across the street from each other was also the basis for a joke in the movie Best in Show in 2000, as well as the parody Farbucks coffee chain in the movie Shrek 2.
- Nick Hornby satires Starbucks' pervasiveness in A Long Way Down.
- In the 1998 film You've Got Mail, Tom Hanks' character claims the power that Starbucks and other similar places have on people: "The whole purpose of places like Starbucks is for people with no decision-making ability whatsoever to make six decisions just to buy one cup of coffee. Short, tall, light, dark, caf, decaf, low-fat, non-fat, etc. So people who don't know what the hell they're doing or who on earth they are can, for only $2.95, get not just a cup of coffee but an absolutely defining sense of self: Tall! Decaf! Cappuccino!"
- In the 1999 movie Austin Powers: the Spy Who Shagged Me, Number 2 (Robert Wagner) was suggesting to Dr. Evil about investing in Starbucks.
- Underpants Gnomes, a South Park episode dealing with a Starbucks-like coffee chain.
- The long closed-off Forbidden City in China (accessible in the past only by Chinese royalty) now features a Starbucks location for the benefit of Western tourists.
- Singer-songwriter Mike Doughty has written and recorded a song titled "Busting up a Starbucks".
- In Shrek 2, during the attack by the giant gingerbread man, various townspeople can be seen fleeing from one Starbucks to another.
Controversies
In 2005, the company began to print quotations on its paper coffee cups. One of these drew criticism from groups including Concerned Women for America:
- The Way I See It #43: My only regret about being gay was that I repressed it for so long. I surrendered my youth to the people that I feared when I could have been out there loving someone. Don't make that mistake yourself. Life's too damn short. — Armistead Maupin, author of the Tales of the City series and the novel The Night Listener.
Although the other cups displayed a wide range of ideas, these critics singled out this quotation for allegedly promoting homosexuality. The Starbucks at Baylor University removed cups featuring it after complaints from a staff member. Starbucks, however, has no plan to pull the cup from the program.
In August 2005, pro-life groups criticized Starbucks for including Planned Parenthood in their employee matching funds program. [1] It is not clear whether this policy is still in effect; it is no longer mentioned on Starbucks' or Planned Parenthood's websites.
Labor disputes
On May 17, 2004, Starbucks' workers at the 36th and Madison store in midtown Manhattan organized for the first Starbucks barista union in the United States. The twelve workers, with assistance from the Industrial Workers of the World IU/660 submitted union cards to the National Labor Relations Board (NLRB) for a certification election. The baristas complained that a starting wage of $7.75 an hour was not a living wage in New York City and that Starbucks refused to guarantee regularity of hours per week, which leads to extreme precarity.
On July 22, 2004, the Retail Workers' Union IU/660 filed an unfair labor practice charge against Starbucks for allegedly making threats of wage cuts, giving bribes, and selectively enforcing no-distribution policies to alter the results of the barista's union vote. The IU/660 has also joined with Global Exchange in calling on Starbucks to purchase at least 5% of the store's coffee from fair trade certified sources. Currently only 1% of Starbucks' coffee is fair trade certified, although they claim to pay fair, above-average prices for all their coffee.
On January 14, 2005 charges stemming from a march at the 2004 Republican National Convention were dropped against Starbucks' baristas' union co-founder Daniel Gross. Witnesses allege Starbucks' managers coordinated with the NYPD to single out Daniel Gross and another union activist from a crowd of 200 peaceful protesters. Witnesses also claim to have incontrovertible video tape evidence that shows the arresting police officer(s) fabricated evidence including filing a false police report. The dismissal charges came two weeks after the NLRB issued a complaint against the company [Starbucks] alleging that management made threats, gave bribes, and created an impression of surveillance in a failed effort to defeat the first-ever union of Starbucks café workers in the United States.
The world's first Starbucks strike happened in Auckland, New Zealand at 2pm November 23, 2005. Organised by Unite Workers Union [2] it took place as the opening industrial action of the Supersizemypay.com campaign, which is fighting for the abolition of youth rates and for secure hours and a minimum wage of NZ$12 an hour. The strike began at the Karangahape Road store and involved several other Auckland branches.
See also
- Coffee house
- Peet's Coffee & Tea
- Tall Latte index, an informal way of measuring whether one currency is at the theoretically correct exchange rate with another currency.
External links
- Official website
- Online Coffee Store
- The Way I See It
- Starbucks Holiday website - The Red Cup
- Hear Music
- Hear Music on XM Radio
- Starbucks Everywhere - webpage of man attempting to visit every Starbucks
- Coffee Food Pairings- List of Starbucks Seasonal and Regular Coffee (Official Canadian Website)
- Starbucks Spoof Website
- SuperSizeMyPay.Com campaign website
- Starbucks union website
- Voice of dissent
- Modesto Bee Community Columnist, Lisa Masson, notes that Starbucks is addicting.
- Website chronicling WiFi interference problems at Starbucks
- CASEScontact.org tip - securing your notebook for Wi-Fi use at Starbucks
- A starbucks in the Forbidden City of China!
- Starbucks Card Collectors Group
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