STARBUCKS COFFEE | HISTORY

Starbucks Corporation is an American coffeecompany and coffeehouse chain as we all know. Starbucks was founded in Seattle, Washington in 1971. As of early 2019, the company operates over 30,000 locations worldwide.

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.^[6] Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons.^[6][7]

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,^[8] Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips and crackers; some offerings (including their annual fall launch of the 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.^[9] 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.^[10] Despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s,^[11] the company experienced revitalized prosperity with its entry into California in the early 1990s.^[12] The first Starbucks location outside North America opened in Tokyo in 1996; overseas properties now constitute almost one-third of its stores.^[13] The company opened an average of two new locations daily between 1987 and 2007.^[14]

On December 1, 2016, Howard Schultzannounced he would resign as CEO effective April 2017 and would be replaced by Kevin Johnson. Johnson assumed the role of CEO on April 3, 2017,^[15] and Howard Schultz retired to become Chairman Emeritus effective June 26, 2018.^[16]

History

Interior of the Pike Place Marketlocation in 1977

Founding

The first Starbucks opened in Seattle, Washington, on March 31, 1971,^[17] by three partners who met while they were students at the University of San Francisco:^[18] 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.^[19] 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.^[20] Bowker said, "Moby-Dick didn't have anything to do with Starbucks directly; it was only coincidental that the sound seemed to make sense."^[20][21]

The first Starbucks store was located in Seattle at 2000 Western Avenue from 1971–1976. This cafe was later moved to 1912 Pike Place.^[22] During this time, the company only sold roasted whole coffee beans and did not yet brew coffee to sell.^[23] During their first year of operation, they purchased green coffee beans from Peet's,^[24] then began buying directly from growers.^{[citation needed]}

Sale and expansion

A Chinese-style Starbucks in Chinatown, Manhattan, New York

In 1984, the original owners of Starbucks, led by Jerry Baldwin, purchased Peet's.^[25] 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.^[26] By 1986, the company operated six stores in Seattle^[26] and had only just begun to sell espresso coffee.^[27]

In 1987, the original owners sold the Starbucks chain to former manager^[28]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.^[29] 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.^[26]

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.^[30] By September 1992, Starbucks' share price had risen by 70% to over 100 times the earnings per share of the previous year.^[23]

In July 2013, over 10% of in-store purchases were made on customer's mobile devices using the Starbucks app.^[31] 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.^[32][33] As of 2018, Starbucks is ranked 132nd on the Fortune 500 list of the largest United States corporations by revenue.^[34]