How Starbucks Became An $80B Business

CNBC
10 Jan 201907:40

Summary

TLDRStarbucks, a $80 billion coffee giant, has seen impressive growth with nearly 30,000 cafes globally, capturing 57% of the cafe market. Founded in 1971, it evolved from a coffee bean shop to serving beverages, with Howard Schultz's vision of turning it into cafes. Despite challenges like the 2007 financial crash and over-saturation, Starbucks adapted by focusing on customer experience and innovative concepts like Starbucks Reserve Roasteries. It now faces changing consumer preferences, responding with healthier options and delivery services.

Takeaways

  • 🌟 Starbucks has grown to a global presence with nearly 30,000 cafes and dominates the cafe market with 57% share.
  • 🚀 The company's rapid expansion has led to over 14,000 locations in the U.S., causing profit cannibalization due to over-saturation.
  • 💡 Starbucks was founded in 1971 by three friends in Seattle, inspired by the coffee roasting expertise of Alfred Peet.
  • ☕ The introduction of espresso-based drinks and the transformation into cafes began after Howard Schultz's visit to Italy in 1983.
  • 📈 Schultz's aggressive expansion strategy led to Starbucks going public in 1992 with 165 stores, growing to over 15,000 by 2007.
  • 📉 The 2007 financial crisis hit Starbucks hard, causing a halt in growth and a 50% drop in stock price.
  • 🛠 Howard Schultz's return as CEO in 2008 focused on improving customer experience and closing underperforming stores.
  • đŸȘ Starbucks closed all U.S. locations for an afternoon in 2008 for barista retraining to enhance the in-store coffee experience.
  • 🍰 The company shifted focus from sugary drinks to lighter options like cold brew and Refreshers to align with changing consumer preferences.
  • 🏬 Starbucks plans to open more upscale Starbucks Reserve Roasteries, which are large-format stores designed as tourist destinations.
  • 📩 The company is also expanding its delivery service to a quarter of its company-owned stores by mid-2019.

Q & A

  • How many cafes does Starbucks have worldwide?

    -Starbucks has nearly 30,000 cafes across the globe.

  • What percentage of the total cafe market sales does Starbucks account for?

    -Starbucks sales account for 57 percent of the total cafe market.

  • How many locations does Starbucks have in the U.S.?

    -Starbucks has more than 14,000 locations in the U.S. alone.

  • Who founded Starbucks and when was it founded?

    -Starbucks was founded by Zev Siegl, Jerry Baldwin, and Gordon Bowker in 1971.

  • Who was Starbucks' mentor and what was his contribution?

    -Alfred Peet, founder of Peet's Coffee, was Starbucks' mentor. He provided roasted coffee beans and connected them with coffee brokers.

  • What was the initial focus of Starbucks before Howard Schultz joined?

    -The initial focus of Starbucks was to bring high-quality beans to consumers who were more accustomed to instant or canned coffee.

  • What significant change did Howard Schultz bring to Starbucks?

    -Howard Schultz turned the coffee bean stores into cafes, introducing coffee beverages like lattes.

  • What was the impact of the 2007 financial crash on Starbucks?

    -The 2007 financial crash caused Starbucks' rapid growth to screech to a halt and its stock price plummeted by 50 percent.

  • What measures did Howard Schultz take to improve Starbucks' performance after returning as CEO?

    -Schultz halted growth, focused on customer experience, shuttered underperforming cafes, laid off baristas, and retrained the staff to enhance the in-store experience.

  • What is Starbucks doing to address the issue of over-saturation and changing consumer preferences?

    -Starbucks is closing some stores, focusing on growth in targeted areas, promoting lighter drinks, and introducing new upscale stores like Starbucks Reserve Roasteries.

  • What is the concept behind Starbucks Reserve Roasteries?

    -Starbucks Reserve Roasteries are massive stores designed to be a tourist destination where baristas and bartenders experiment with different brewing methods and craft new beverages.

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Étiquettes Connexes
Starbucks HistoryCafe MarketCoffee CultureBusiness GrowthHoward SchultzEconomic CrisisCustomer ExperienceFranchise ExpansionHealth TrendsInnovation Strategy
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