Starbucks Corporation (NASDAQ: SBUX) is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world, with 17,009 stores in 50 countries, including over 11,000 in the United States, over 1,000 in Canada, and over 700 in the United Kingdom.
Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches and panini, pastries, snacks, and items such as mugs and tumblers. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores.
From Starbucks' founding in later forms in Seattle as a local coffee bean roaster and retailer, the company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-1990s, and overseas stores now constitute almost one third of Starbucks' stores. The company planned to open a net of 900 new stores outside of the United States in 2009, but has announced 900 store closures in the United States since 2008.
Starbucks has been a target of protests on issues such as fair-trade policies, labor relations, environmental impact, political views, and anti-competitive practices.
Starbucks Corporation is the leading roaster, retailer, and marketer of specialty coffee in North America. Its operations include upwards of 2,400 coffee shops and kiosks in the United States and Canada, more than 100 in the United Kingdom, and more than 200 in other countries, including China, Japan, Kuwait, Lebanon, New Zealand, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. In addition to a variety of coffees and coffee drinks, Starbucks shops also feature Tazo teas; pastries and other food items; and espresso machines, coffee brewers, and other assorted items. The company also sells many of these products via mail order and online at starbucks.com. It also wholesales its coffee to restaurants, businesses, education and healthcare institutions, hotels, and airlines. Through a joint venture with Pepsi-Cola Company, Starbucks bottles Frappuccino beverages and sells them through supermarkets and convenience and drugstores. Through a partnership with Kraft Foods, Inc., the company sells Starbucks whole bean and ground coffee into grocery, warehouse club, and mass merchandise stores. A third joint venture is with Dreyer's Grand Ice Cream. In addition, it distributes Starbucks premium coffee ice creams to U.S. supermarkets. From a single small store that opened in 1971 to its status as a gourmet coffee giant at the turn of the millennium, Starbucks has led a coffee revolution in the United States and beyond.
Starbucks Corporation (Starbucks) is the roaster and retailer of specialty coffee in the world, operating in more than 50 countries. Starbucks purchases and roasts whole bean coffees and sells them, along with handcrafted coffee and tea beverages and a variety of fresh food items, through Company-operated retail stores. It also sells coffee and tea products and license its trademarks through other channels, such as licensed retail stores and, through certain of its licensees and equity investees, the Company produces and sells a variety of ready-to-drink beverages. In addition to its flagship Starbucks brand, its portfolio includes brands, such as Tazo Tea, Seattle’s Best Coffee, and Starbucks VIA Ready Brew. Starbucks has three operating segments: United States (US), International, and Global Consumer Products Group (CPG). In October 2010, the Company acquired Magic Johnson Enterprise’s remaining 50% interest in Urban Coffee Opportunities.
The US and International segments both include Company-operated retail stores and certain components of specialty operations. Specialty operations within the US include licensed retail stores. International specialty operations include retail store licensing operations in nearly 40 countries and foodservice accounts primarily in Canada and the United Kingdom. Its International segment’s markets are Canada, Japan and the United Kingdom. The CPG segment includes packaged coffee and tea, Starbucks VIA Ready Brew and other branded products sold worldwide through channels, such as grocery stores, warehouse clubs and convenience stores, and the United States foodservice accounts. CPG operates a portion of its business through licensing arrangements and a joint venture with a large consumer products business partner.
The Company purchases green coffee beans from multiple coffee-producing regions worldwide. Starbucks operates Farmer Support Centers in Costa Rica and Rwanda. In addition to coffee, it also purchases dairy products, particularly fluid milk, to support the needs of its company-operated retail stores. Products other than whole bean coffees and coffee beverages sold in Starbucks retail stores are obtained through a number of different channels. Beverage ingredients other than coffee and milk, including leaf teas, as well as its selection of ready-to-drink beverages, are purchased from several specialty suppliers, usually under long-term supply contracts. Food products, such as fresh pastries, breakfast sandwiches and lunch items, are purchased from national, regional and local sources. It also purchases a range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of its retail stores, as well as its manufacturing and distribution operations.
The following year--in addition to continued North American expansion into Rhode Island, Idaho, North Carolina, Arizona, Utah, and Ontario--the company ventured overseas for the first time. Its initial foreign forays were launched through joint venture and licensing arrangements with prominent local retailers. With the help of SAZABY Inc., a Japanese retailer and restaurateur, the first market developed in 1996 was Japan; through other partnerships, Hawaii and Singapore also received their first Starbucks that year. The Philippines followed in 1997. Meantime, Starbucks entered into a partnership with Dreyer's Grand Ice Cream, Inc. in 1996 to develop and sell Starbucks Ice Cream. Within eight months of introduction, the product became the number one coffee ice cream in the United States. Starbucks' expansion into Florida, Michigan, and Wisconsin in 1997 helped the total number of units reach an astounding 1,412 by year-end, more than double the previous two-year total. Sales approached the $1 billion mark that year, while net income hit $57.4 million, more than five times the result for 1994.
As this rapid growth continued, the company began to be needled by late night talk show hosts for its seeming Starbucks-on-every-corner expansion strategy, while a number of owners and patrons of local coffee shops began speaking out and demonstrating against what they considered overly aggressive and even predatory moves into new territory. Critics complained that the company was deliberately locating its units near local coffee merchants to siphon off sales, sometimes placing a Starbucks directly across the street. In 1996 and 1997 residents in Toronto, San Francisco, Brooklyn, and Portland, Oregon, staged sidewalk protests to attempt to keep Starbucks out of their neighborhoods. One of the company's responses to the scattered resistance was to try to enhance its image through stepped-up advertising. Still, like Wal-Mart Stores, Inc. and its reputation in some quarters as a destroyer of Main Street, Starbucks remained the object of snickers from comedians and derision from a vocal minority of protesters. This undercurrent of hostility burst into the spotlight in late 1999 when some of the more aggressive protesters against a World Trade Organization meeting took their anger out on several Starbucks stores in the company's hometown of Seattle, tagging a number of the 26 downtown locations with graffiti and inflicting more serious vandalism on three stores, which were then temporarily closed.
The anti-multinational protesters in Seattle also singled out stores operated by McDonald's Corporation and Nike, Inc. The lumping of the once-modest purveyor of gourmet coffee in with these global giants was in part an outgrowth of the company's aggressive overseas expansion in the late 1990s. Growth in the Pacific Rim continued with the opening of locations in Taiwan, Thailand, New Zealand, and Malaysia in 1998 and in China and South Korea in 1999. By early 2000 the number of Starbucks in Japan had reached 100. The company aimed to have 500 stores in the Pacific Rim by 2003. The Middle East was another target of global growth, with stores opened in Kuwait and Lebanon in 1999, but it was the United Kingdom that was the object of the company's other big late 1990s push. In 1998 Starbucks acquired Seattle Coffee Company, the leading U.K. specialty coffee firm, for about $86 million in stock. Starbucks began rebranding Seattle Coffee's locations under the Starbucks name. Aggressive expansion in the United Kingdom yielded more than 100 units by late 1999. Starbucks hoped to use its U.K. base for an invasion of the Continent, aiming for 500 stores in Europe by 2003.
Growth was not slowing back home either. Areas receiving their first Starbucks in 1998 and 1999 included New Orleans, St. Louis, Kansas City, and Memphis and Nashville, Tennessee. The number of North American locations approached 2,200 by early 2000. Always searching for new revenue streams, Starbucks in 1998 entered into a long-term licensing agreement with Kraft Foods, Inc. for the marketing and distribution of Starbucks whole bean and ground coffee into grocery, warehouse club, and mass merchandise stores. The company also began experimenting with a full-service casual restaurant called Café Starbucks. A further move into food came in early 1999 through the purchase of Pasqua Coffee Co., a chain of coffee and sandwich shops with 56 units in California and New York. Starbucks had already developed its own in-house tea brand, Infusia, but it was replaced following the early 1999 acquisition of Tazo Tea Company, a Portland, Oregon-based maker of premium teas and related products with distribution through 5,000 retail outlets.
Starbucks had also launched a web site featuring an online store in 1998, and Schultz began talking about Starbucks becoming a mega-cybermerchant offering everything from gourmet foods to furniture. To this end, the company attempted, but failed, to acquire Williams-Sonoma, Inc., a specialty retailer of high-end kitchenware. Wall Street analysts began questioning the wisdom of moving so far afield from the company's core coffee business. In mid-1999, following Starbucks' announcement of an earnings shortfall, the company's stock plunged 28 percent, leading Schultz to pull back on his ambitious cyber plans. In early 2000, however, the company did enter into an agreement with Kozmo.com Inc., an operator of an Internet home-delivery service providing its customers with videos, snacks, magazines, books, and other items. Kozmo.com agreed to pay Starbucks $150 million over a five-year period to place drop boxes in Starbucks stores for the return of videos and other items, and to begin delivering Starbucks coffee, Tazo teas, and other items to its customers.
Other developments included an agreement with Albertson's, Inc. to open more than 100 Starbucks coffee bars in Albertson's supermarkets in the United States; and the acquisition of the five-store San Francisco-based Hear Music chain, in an extension of Starbucks' music retailing ventures. Image problems continued to crop up for the rapidly growing company, whose fiscal 1999 revenues of $1.68 billion were nearly six times the figure of five years earlier. In April 2000 a San Francisco-based human rights group called Global Exchange was readying a large protest at Starbucks in 29 cities to publicize its allegations that the coffee company was buying its beans from wholesalers who were paying farmers what amounted to poverty wages. In a preemptive move, which staved off the protests and the resultant bad publicity, Starbucks announced that it would buy more coffee certified as 'fair trade,' meaning that the farmers who grew it received more than market price for their crop, sometimes as high as three times the 30 cents per pound they typically received.
In the early 21st century, Starbucks was working to achieve Schultz's ambitious goals of 500 stores in both Japan and Europe by 2003, as well as his ultimate goal of 20,000 units worldwide. With about half of that total envisioned to be located outside North America, Schultz decided to spend more time on the company's overseas operations. In June 2000 he stepped down as CEO of the company to become its chief global strategist, while remaining chairman. Schultz would work closely with Peter Maslen, who had taken charge of the international division in late 1999, following the retirement of Howard Behar. Assuming the CEO title was Orin Smith, who retained his previous responsibility for domestic retail and wholesale operations, alliances, and coffee roasting and distribution.
Principal Subsidiaries: The Coffee Connection, Inc.; Starbucks New Venture Company; Starbucks Coffee International, Inc.; Starbucks Holding Company; Starbucks Manufacturing Corporation; SBI Nevada, Inc.; Circadia Corporation; Starbucks U.S. Brands Corporation; Starbucks Asset Management Corporation; Starbucks Foreign Sales Corporation; Starbucks Coffee Holdings (UK) Limited; Starbucks Coffee Company (UK) Limited; Seattle Coffee Company International (U.K.); Torz & Macatonia Limited (U.K.); Tazo Tea Company; Pasqua Inc.; Starbucks Coffee France, EURL; Starbucks Coffee Asia Pacific Ltd.; Starbucks Coffee Company (Australia) Pty Ltd (90%); Tympanum, Inc.
Principal Competitors: ABP Corporation; AFC Enterprises, Inc.; Allied Domecq PLC; BAB Holdings, Inc.; Diedrich Coffee, Inc.; Einstein/Noah Bagel Corp.; Farmer Bros. Co.; Green Mountain Coffee, Inc.; Kraft Foods, Inc.; Nestlé S.A.; New World Coffee-Manhattan Bagel, Inc.; New York Bagel Enterprises, Inc.; Panera Bread Company; Peet's Coffee & Tea; The Procter & Gamble Company; Sara Lee Corporation; Tully's Coffee Corporation.
OVERALL
Beta: 1.24
Market Cap (Mil.): $27,322.92
Shares Outstanding (Mil.): 749.60
Annual Dividend: 0.52
Yield (%): 1.43
FINANCIALS
SBUX.O Industry Sector
P/E (TTM): 25.52 24.24 21.07
EPS (TTM): 42.75 -- --
ROI: 22.60 3.98 1.78
ROE: 27.86 6.01 2.74
Statistics:
Public Company
Incorporated: 1985 as Il Giornale
Employees: 37,000
Sales: $1.68 billion (1999)
Stock Exchanges: NASDAQ
Ticker Symbol: SBUX
NAIC: 722213 Snack and Nonalcoholic Beverage Bars; 311920 Coffee and Tea Manufacturing; 312111 Soft Drink Manufacturing; 422490 Other Grocery and Related Products Wholesalers; 454110 Electronic Shopping and Mail-Order Houses
Key Dates:
1971: Gordon Bowker, Jerry Baldwin, and Zev Siegl open the first Starbucks in Seattle's Pike Place Market.
1982: Howard Schultz is hired to manage retail sales and marketing.
1983: Peet's Coffee is acquired.
1985: Schultz leaves the company to found Il Giornale, an operator of coffee bars.
1987: Schultz buys the six-unit Starbucks chain from the original owners for $4 million, merges them into Il Giornale, renames his company Starbucks Corporation, and begins a national expansion by opening stores in Chicago. Baldwin remains president of the now separate Peet's Coffee and Tea business.
1988: A mail-order catalog is introduced.
1992: Company goes public.
1993: First East Coast store opens, in Washington, D.C.
1995: Frappuccino beverages are introduced.
1996: Overseas expansion begins with units in Japan, Hawaii, and Singapore. Partnership with Dreyer's begins selling Starbucks Ice Cream. Partnership with Pepsi-Cola begins selling bottled Frappuccino beverages.
1998: U.K.-based Seattle Coffee Company is acquired. Partnership with Kraft Foods is formed for the distribution of Starbucks coffee into supermarkets.
1999: Pasqua Coffee Co. and Tazo Tea Company are acquired.
2000: Schultz steps aside as CEO to become chief global strategist, while remaining chairman; Orin Smith takes over as CEO.
Name Age Since Current Position
Howard Schultz 57 2008 Chairman of the Board, President, Chief Executive Officer
Arthur Rubinfeld 57 2008 President - Global Development
Clifford Burrows 51 2008 President - Starbucks Coffee US
Michelle Gass 43 2009 President - Seattle's Best Coffee
John Culver 50 2009 President - Starbucks Coffee International
Jeffery Hansberry 46 2010 President - Global Consumer Products and Foodservice
Stephen Gillett 34 2010 Chief Information Officer, Executive Vice President, General Manager - Digital Ventures
Paula Boggs 51 2002 Executive Vice President, General Counsel, Secretary
Peter Gibbons 49 2008 Executive Vice President - Global Supply Chain Operations
Kalen Holmes 44 2009 Executive Vice President - Partner Resources
Vivek Varma 44 2010 Executive Vice President - Public Affairs
Troy Alstead 47 2008 Chief Financial Officer, Chief Administrative Officer, Executive Vice President
Annie Young-Scrivner 42 2009 Chief Marketing Officer
Myron Ullman 64 2003 Lead Independent Director
Joshua Ramo 42 2011 Director
James Shennan 69 1990 Independent Director
Craig Weatherup 65 1999 Independent Director
William Bradley 67 2003 Independent Director
Olden Lee 69 2009 Independent Director
Javier Teruel 60 2005 Independent Director
Mellody Hobson 41 2005 Independent Director
Kevin Johnson 50 2009 Independent Director
Sheryl Sandberg 41 2009 Independent Director
Address:
2401 Utah Avenue South
Seattle, Washington 98134
U.S.A.
Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches and panini, pastries, snacks, and items such as mugs and tumblers. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores.
From Starbucks' founding in later forms in Seattle as a local coffee bean roaster and retailer, the company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-1990s, and overseas stores now constitute almost one third of Starbucks' stores. The company planned to open a net of 900 new stores outside of the United States in 2009, but has announced 900 store closures in the United States since 2008.
Starbucks has been a target of protests on issues such as fair-trade policies, labor relations, environmental impact, political views, and anti-competitive practices.
Starbucks Corporation is the leading roaster, retailer, and marketer of specialty coffee in North America. Its operations include upwards of 2,400 coffee shops and kiosks in the United States and Canada, more than 100 in the United Kingdom, and more than 200 in other countries, including China, Japan, Kuwait, Lebanon, New Zealand, Malaysia, the Philippines, Singapore, South Korea, Taiwan, and Thailand. In addition to a variety of coffees and coffee drinks, Starbucks shops also feature Tazo teas; pastries and other food items; and espresso machines, coffee brewers, and other assorted items. The company also sells many of these products via mail order and online at starbucks.com. It also wholesales its coffee to restaurants, businesses, education and healthcare institutions, hotels, and airlines. Through a joint venture with Pepsi-Cola Company, Starbucks bottles Frappuccino beverages and sells them through supermarkets and convenience and drugstores. Through a partnership with Kraft Foods, Inc., the company sells Starbucks whole bean and ground coffee into grocery, warehouse club, and mass merchandise stores. A third joint venture is with Dreyer's Grand Ice Cream. In addition, it distributes Starbucks premium coffee ice creams to U.S. supermarkets. From a single small store that opened in 1971 to its status as a gourmet coffee giant at the turn of the millennium, Starbucks has led a coffee revolution in the United States and beyond.
Starbucks Corporation (Starbucks) is the roaster and retailer of specialty coffee in the world, operating in more than 50 countries. Starbucks purchases and roasts whole bean coffees and sells them, along with handcrafted coffee and tea beverages and a variety of fresh food items, through Company-operated retail stores. It also sells coffee and tea products and license its trademarks through other channels, such as licensed retail stores and, through certain of its licensees and equity investees, the Company produces and sells a variety of ready-to-drink beverages. In addition to its flagship Starbucks brand, its portfolio includes brands, such as Tazo Tea, Seattle’s Best Coffee, and Starbucks VIA Ready Brew. Starbucks has three operating segments: United States (US), International, and Global Consumer Products Group (CPG). In October 2010, the Company acquired Magic Johnson Enterprise’s remaining 50% interest in Urban Coffee Opportunities.
The US and International segments both include Company-operated retail stores and certain components of specialty operations. Specialty operations within the US include licensed retail stores. International specialty operations include retail store licensing operations in nearly 40 countries and foodservice accounts primarily in Canada and the United Kingdom. Its International segment’s markets are Canada, Japan and the United Kingdom. The CPG segment includes packaged coffee and tea, Starbucks VIA Ready Brew and other branded products sold worldwide through channels, such as grocery stores, warehouse clubs and convenience stores, and the United States foodservice accounts. CPG operates a portion of its business through licensing arrangements and a joint venture with a large consumer products business partner.
The Company purchases green coffee beans from multiple coffee-producing regions worldwide. Starbucks operates Farmer Support Centers in Costa Rica and Rwanda. In addition to coffee, it also purchases dairy products, particularly fluid milk, to support the needs of its company-operated retail stores. Products other than whole bean coffees and coffee beverages sold in Starbucks retail stores are obtained through a number of different channels. Beverage ingredients other than coffee and milk, including leaf teas, as well as its selection of ready-to-drink beverages, are purchased from several specialty suppliers, usually under long-term supply contracts. Food products, such as fresh pastries, breakfast sandwiches and lunch items, are purchased from national, regional and local sources. It also purchases a range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of its retail stores, as well as its manufacturing and distribution operations.
The following year--in addition to continued North American expansion into Rhode Island, Idaho, North Carolina, Arizona, Utah, and Ontario--the company ventured overseas for the first time. Its initial foreign forays were launched through joint venture and licensing arrangements with prominent local retailers. With the help of SAZABY Inc., a Japanese retailer and restaurateur, the first market developed in 1996 was Japan; through other partnerships, Hawaii and Singapore also received their first Starbucks that year. The Philippines followed in 1997. Meantime, Starbucks entered into a partnership with Dreyer's Grand Ice Cream, Inc. in 1996 to develop and sell Starbucks Ice Cream. Within eight months of introduction, the product became the number one coffee ice cream in the United States. Starbucks' expansion into Florida, Michigan, and Wisconsin in 1997 helped the total number of units reach an astounding 1,412 by year-end, more than double the previous two-year total. Sales approached the $1 billion mark that year, while net income hit $57.4 million, more than five times the result for 1994.
As this rapid growth continued, the company began to be needled by late night talk show hosts for its seeming Starbucks-on-every-corner expansion strategy, while a number of owners and patrons of local coffee shops began speaking out and demonstrating against what they considered overly aggressive and even predatory moves into new territory. Critics complained that the company was deliberately locating its units near local coffee merchants to siphon off sales, sometimes placing a Starbucks directly across the street. In 1996 and 1997 residents in Toronto, San Francisco, Brooklyn, and Portland, Oregon, staged sidewalk protests to attempt to keep Starbucks out of their neighborhoods. One of the company's responses to the scattered resistance was to try to enhance its image through stepped-up advertising. Still, like Wal-Mart Stores, Inc. and its reputation in some quarters as a destroyer of Main Street, Starbucks remained the object of snickers from comedians and derision from a vocal minority of protesters. This undercurrent of hostility burst into the spotlight in late 1999 when some of the more aggressive protesters against a World Trade Organization meeting took their anger out on several Starbucks stores in the company's hometown of Seattle, tagging a number of the 26 downtown locations with graffiti and inflicting more serious vandalism on three stores, which were then temporarily closed.
The anti-multinational protesters in Seattle also singled out stores operated by McDonald's Corporation and Nike, Inc. The lumping of the once-modest purveyor of gourmet coffee in with these global giants was in part an outgrowth of the company's aggressive overseas expansion in the late 1990s. Growth in the Pacific Rim continued with the opening of locations in Taiwan, Thailand, New Zealand, and Malaysia in 1998 and in China and South Korea in 1999. By early 2000 the number of Starbucks in Japan had reached 100. The company aimed to have 500 stores in the Pacific Rim by 2003. The Middle East was another target of global growth, with stores opened in Kuwait and Lebanon in 1999, but it was the United Kingdom that was the object of the company's other big late 1990s push. In 1998 Starbucks acquired Seattle Coffee Company, the leading U.K. specialty coffee firm, for about $86 million in stock. Starbucks began rebranding Seattle Coffee's locations under the Starbucks name. Aggressive expansion in the United Kingdom yielded more than 100 units by late 1999. Starbucks hoped to use its U.K. base for an invasion of the Continent, aiming for 500 stores in Europe by 2003.
Growth was not slowing back home either. Areas receiving their first Starbucks in 1998 and 1999 included New Orleans, St. Louis, Kansas City, and Memphis and Nashville, Tennessee. The number of North American locations approached 2,200 by early 2000. Always searching for new revenue streams, Starbucks in 1998 entered into a long-term licensing agreement with Kraft Foods, Inc. for the marketing and distribution of Starbucks whole bean and ground coffee into grocery, warehouse club, and mass merchandise stores. The company also began experimenting with a full-service casual restaurant called Café Starbucks. A further move into food came in early 1999 through the purchase of Pasqua Coffee Co., a chain of coffee and sandwich shops with 56 units in California and New York. Starbucks had already developed its own in-house tea brand, Infusia, but it was replaced following the early 1999 acquisition of Tazo Tea Company, a Portland, Oregon-based maker of premium teas and related products with distribution through 5,000 retail outlets.
Starbucks had also launched a web site featuring an online store in 1998, and Schultz began talking about Starbucks becoming a mega-cybermerchant offering everything from gourmet foods to furniture. To this end, the company attempted, but failed, to acquire Williams-Sonoma, Inc., a specialty retailer of high-end kitchenware. Wall Street analysts began questioning the wisdom of moving so far afield from the company's core coffee business. In mid-1999, following Starbucks' announcement of an earnings shortfall, the company's stock plunged 28 percent, leading Schultz to pull back on his ambitious cyber plans. In early 2000, however, the company did enter into an agreement with Kozmo.com Inc., an operator of an Internet home-delivery service providing its customers with videos, snacks, magazines, books, and other items. Kozmo.com agreed to pay Starbucks $150 million over a five-year period to place drop boxes in Starbucks stores for the return of videos and other items, and to begin delivering Starbucks coffee, Tazo teas, and other items to its customers.
Other developments included an agreement with Albertson's, Inc. to open more than 100 Starbucks coffee bars in Albertson's supermarkets in the United States; and the acquisition of the five-store San Francisco-based Hear Music chain, in an extension of Starbucks' music retailing ventures. Image problems continued to crop up for the rapidly growing company, whose fiscal 1999 revenues of $1.68 billion were nearly six times the figure of five years earlier. In April 2000 a San Francisco-based human rights group called Global Exchange was readying a large protest at Starbucks in 29 cities to publicize its allegations that the coffee company was buying its beans from wholesalers who were paying farmers what amounted to poverty wages. In a preemptive move, which staved off the protests and the resultant bad publicity, Starbucks announced that it would buy more coffee certified as 'fair trade,' meaning that the farmers who grew it received more than market price for their crop, sometimes as high as three times the 30 cents per pound they typically received.
In the early 21st century, Starbucks was working to achieve Schultz's ambitious goals of 500 stores in both Japan and Europe by 2003, as well as his ultimate goal of 20,000 units worldwide. With about half of that total envisioned to be located outside North America, Schultz decided to spend more time on the company's overseas operations. In June 2000 he stepped down as CEO of the company to become its chief global strategist, while remaining chairman. Schultz would work closely with Peter Maslen, who had taken charge of the international division in late 1999, following the retirement of Howard Behar. Assuming the CEO title was Orin Smith, who retained his previous responsibility for domestic retail and wholesale operations, alliances, and coffee roasting and distribution.
Principal Subsidiaries: The Coffee Connection, Inc.; Starbucks New Venture Company; Starbucks Coffee International, Inc.; Starbucks Holding Company; Starbucks Manufacturing Corporation; SBI Nevada, Inc.; Circadia Corporation; Starbucks U.S. Brands Corporation; Starbucks Asset Management Corporation; Starbucks Foreign Sales Corporation; Starbucks Coffee Holdings (UK) Limited; Starbucks Coffee Company (UK) Limited; Seattle Coffee Company International (U.K.); Torz & Macatonia Limited (U.K.); Tazo Tea Company; Pasqua Inc.; Starbucks Coffee France, EURL; Starbucks Coffee Asia Pacific Ltd.; Starbucks Coffee Company (Australia) Pty Ltd (90%); Tympanum, Inc.
Principal Competitors: ABP Corporation; AFC Enterprises, Inc.; Allied Domecq PLC; BAB Holdings, Inc.; Diedrich Coffee, Inc.; Einstein/Noah Bagel Corp.; Farmer Bros. Co.; Green Mountain Coffee, Inc.; Kraft Foods, Inc.; Nestlé S.A.; New World Coffee-Manhattan Bagel, Inc.; New York Bagel Enterprises, Inc.; Panera Bread Company; Peet's Coffee & Tea; The Procter & Gamble Company; Sara Lee Corporation; Tully's Coffee Corporation.
OVERALL
Beta: 1.24
Market Cap (Mil.): $27,322.92
Shares Outstanding (Mil.): 749.60
Annual Dividend: 0.52
Yield (%): 1.43
FINANCIALS
SBUX.O Industry Sector
P/E (TTM): 25.52 24.24 21.07
EPS (TTM): 42.75 -- --
ROI: 22.60 3.98 1.78
ROE: 27.86 6.01 2.74
Statistics:
Public Company
Incorporated: 1985 as Il Giornale
Employees: 37,000
Sales: $1.68 billion (1999)
Stock Exchanges: NASDAQ
Ticker Symbol: SBUX
NAIC: 722213 Snack and Nonalcoholic Beverage Bars; 311920 Coffee and Tea Manufacturing; 312111 Soft Drink Manufacturing; 422490 Other Grocery and Related Products Wholesalers; 454110 Electronic Shopping and Mail-Order Houses
Key Dates:
1971: Gordon Bowker, Jerry Baldwin, and Zev Siegl open the first Starbucks in Seattle's Pike Place Market.
1982: Howard Schultz is hired to manage retail sales and marketing.
1983: Peet's Coffee is acquired.
1985: Schultz leaves the company to found Il Giornale, an operator of coffee bars.
1987: Schultz buys the six-unit Starbucks chain from the original owners for $4 million, merges them into Il Giornale, renames his company Starbucks Corporation, and begins a national expansion by opening stores in Chicago. Baldwin remains president of the now separate Peet's Coffee and Tea business.
1988: A mail-order catalog is introduced.
1992: Company goes public.
1993: First East Coast store opens, in Washington, D.C.
1995: Frappuccino beverages are introduced.
1996: Overseas expansion begins with units in Japan, Hawaii, and Singapore. Partnership with Dreyer's begins selling Starbucks Ice Cream. Partnership with Pepsi-Cola begins selling bottled Frappuccino beverages.
1998: U.K.-based Seattle Coffee Company is acquired. Partnership with Kraft Foods is formed for the distribution of Starbucks coffee into supermarkets.
1999: Pasqua Coffee Co. and Tazo Tea Company are acquired.
2000: Schultz steps aside as CEO to become chief global strategist, while remaining chairman; Orin Smith takes over as CEO.
Name Age Since Current Position
Howard Schultz 57 2008 Chairman of the Board, President, Chief Executive Officer
Arthur Rubinfeld 57 2008 President - Global Development
Clifford Burrows 51 2008 President - Starbucks Coffee US
Michelle Gass 43 2009 President - Seattle's Best Coffee
John Culver 50 2009 President - Starbucks Coffee International
Jeffery Hansberry 46 2010 President - Global Consumer Products and Foodservice
Stephen Gillett 34 2010 Chief Information Officer, Executive Vice President, General Manager - Digital Ventures
Paula Boggs 51 2002 Executive Vice President, General Counsel, Secretary
Peter Gibbons 49 2008 Executive Vice President - Global Supply Chain Operations
Kalen Holmes 44 2009 Executive Vice President - Partner Resources
Vivek Varma 44 2010 Executive Vice President - Public Affairs
Troy Alstead 47 2008 Chief Financial Officer, Chief Administrative Officer, Executive Vice President
Annie Young-Scrivner 42 2009 Chief Marketing Officer
Myron Ullman 64 2003 Lead Independent Director
Joshua Ramo 42 2011 Director
James Shennan 69 1990 Independent Director
Craig Weatherup 65 1999 Independent Director
William Bradley 67 2003 Independent Director
Olden Lee 69 2009 Independent Director
Javier Teruel 60 2005 Independent Director
Mellody Hobson 41 2005 Independent Director
Kevin Johnson 50 2009 Independent Director
Sheryl Sandberg 41 2009 Independent Director
Address:
2401 Utah Avenue South
Seattle, Washington 98134
U.S.A.