Source: http://www.bnet.com/blog/best-business-books/need-a-turnaround-make-a-comeback-the-starbucks-way/123
By Herb Schaffner

It’s no surprise to me that the new memoir by Howard Schultz, the founder of Starbucks, is on the top of the best seller lists. Onward: How Starbucks Fought for Its Life Without Losing Its Soul is a comprehensive, step-by-step personal account of how an entrepreneurial, growth-driven CEO learned from others, changed his leadership style in a difficult time for his company, and reignited passion and confidence in his brand. Onward is a must-read for any manager and ranks as one of the best corporate memoirs written in recent years.

Yes, it has been criticized. Samantha Ettus, a branding blogger at Forbes, called the book misguided and ill-timed, “a marketing exercise which is using the hallowed Starbucks brand as a sacrificial lamb.” But I have no clue what book she and other critics are reading. Schultz’s book is far too transparent, detailed, and honest to be considered a marketing document. Schultz recounts in thorough detail the meetings, memos, consultants, studies, and personal experiences that drove the Starbucks reboot through the end of 2010.

In 2008, Schultz returned as CEO of the company and his agenda was simple: to bring the company back on track after it had badly stumbled, pursuing a high growth strategy. Rather than sacrificing the Starbucks brand, Schultz reveals himself to be consumed by the appeal of Starbucks’ connection to consumers and on a quest to restore every inch of its aura. As Schultz writes:

“outsiders failed to appreciate the nuances of invigorating a service-based business, especially a brand as emotionally charged as ours. Starbucks is not a coffee company that serves people. It is a people company that serves coffee, and human behavior is much more challenging to change than any muffin recipe or marketing strategy.”

So what do managers have to learn from the Starbucks transformation? Quite a lot. Here’s a couple I plucked from the book:

Never forget the basics. Schultz knew the appeal of Starbucks’ coffee was essential–and that the race for growth had undercut quality. Schultz and his team closed every Starbucks store for one day to train baristas in making the best espresso. They upgraded espresso machines to the Mastrena worldwide and improved training. Schultz and other executives visited restaurants and coffee houses, investigating high end food selling techniques. In fact, Schultz was drinking coffee in Seattle’s Ballard neighborhood, when he discovered the Clover, the french press single serving coffee marker, sought out its maker and put it in stores worldwide.

Be willing to listen and work with consultants, but know your North Star. Schultz brought a few management consultants into his trust and credits them heavily in the book. He also listened to friends such as Jim Sinegal, cofounder and CEO of Costco, who reminded Schultz to “protect and perserve your core customers” during a downturn. When the product lunch for Starbucks instant coffee hit a design snag, he turned to his most trusted design consultant. In each case, however, Schultz had to be convinced outsiders understood and shared the values and iconic power of the brand.

If you need to reduce operations to become leaner, make sure you cut enough. For Schultz, Starbucks’ commitment to workers, to health care benefits, and to the role of stores in local communities are hugely important. Burdened by too many stores as the recession dragged on, Schultz and his team knew they needed to close hundreds of doors and reduce the workforce. This was painful–but, after the initial analysis, Starbucks closed more stores and laid off more people than they’d originally planned. They needed to ensure that they would not have to go back and cut again.

Give customers a voice in your redirection. Schultz embraced social media and the idea sharing website, mystarbucksidea.com, which has over 250,000 registered members who have submitted 100,000 ideas since launch in 2008. A retail company that invites customers to cocreate their own drinks and use stores as a second living room must actively engage their ideas.

Communicate heavily–and communicate some more. Schultz’ capacity for hands-on communication is impressive. He blitzed each core constituency–senior managers, store managers, customers, media, analysts, shareholders, and employees–with various communications concisely presenting the case for change or a particular decision. He wrote a stream of internal memos, staged interactive presentations and multimedia displays at Starbucks conventions, made careful pitches to analysts, and invested time and energy in his corporate communications strategy.

Reinvigorate corporate responsibility and production practices. Starbucks’ hard times were not an excuse for the company to be less responsible, but an opportunity to do more. Schultz expanded partnerships with Fairtrade and Conservation International, reduced store environmental impact, and expanded local community service.

The next time you’re asked to turnaround a project, a team, a product or a division, get a cup of good coffee, a copy of Onward and make some notes. In the meantime, commenters: have you tried a turn around? What worked, or didn’t work, for you?

Source: http://www.huffingtonpost.com/2011/03/18/starbucks-ceo-coffee-prices_n_837831.html

(Reuters) – Starbucks Coffee Co (SBUX.O) Chief Executive Howard Schultz on Friday once again laid the blame for surging coffee prices at the feet of speculators, saying his chain had no problem getting beans.

Arabica coffee futures have rallied over the past nine months to a 34-year high this month at $2.9665 per lb, basis second position. The market initially climbed on fund buying but was sustained by tight supplies of washed beans. Many analysts expect it will soon climb to $3 per lb.

“Every supplier that I talk to, every producer, first thing I ask is, ‘Is there any problem with supply and demand?’” Schultz said. They tell him no, he said.

Global stocks are at the lowest level since the International Coffee Organization began keeping records in 1965. The ICO has said stocks could fall lower.

“I think it’s artificial. I think financial speculation has really stepped into the market,” Schultz said at the National Coffee Association meeting on Friday.

Coffee consumers will not “respond positively” to higher coffee prices, Schultz added.

“I think it’s a very hard dialogue with the consumer, face to face, as we have to as a retailer, when in fact there probably isn’t a substantive answer,” Schultz said.

Starbucks is the biggest coffee shop chain in the world.

Many roasters have been forced to pass along their increasing costs to consumers. Most recently, Kraft Foods (KFT.N) raised its list prices for most of its Maxwell House and Yuban roast coffees by 22 percent, its fourth and biggest increase in the past year.

Rival J.M. Smucker Co (SJM.N) hiked its price for Folgers by 10 percent last month.

BY LELIT AND SAVE!!!

Source: http://www.marketwatch.com/story/brazils-thirst-for-good-coffee-pressures-prices-2011-02-08?pagenumber=2

By Claudia Assis, MarketWatch

SAN FRANCISCO (MarketWatch) — Brazilian computer programmer Marcio Carneiro has spent about $4,000 in the last two years selecting just the right equipment to feed his passion: coffee.

To at least some of his countrymen, the object of his affection is so culturally ingrained it doesn’t merit more than a passing thought and a quick trip a corner store.

But Carneiro and other coffee enthusiasts are a big part of what is putting smiles on the faces of Brazilian coffee growers, who are already enjoying coffee prices at multi-year highs. A surge in domestic demand, which is keeping more of Brazil’s export-grade beans at home, may drive coffee prices even higher.

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March coffee contract
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“We will likely see new highs until the third quarter of this year,” said Rodrigo Costa, an analyst at brokerage Newedge in New York.

Coffee futures /quotes/comstock/21c!f2:kc\h11 (CC11H 260.35, +1.70, +0.66%) have gained 82% since January 2010. The rally in prices adds to worldwide concerns about inflation, rising food prices, and even a repeat of riots seen in 2008 amid a global food crisis.

In the U.S., several food conglomerates and coffee roasters have announced price increases, and on Tuesday J. M. Smucker Co. /quotes/comstock/13*!sjm/quotes/nls/sjm (SJM 62.86, +0.01, +0.02%) , the maker of Folgers coffee and the owner of the Dunkin Donuts brand, announced a price hike for the third time in less than year.

The benchmark Arabica coffee for March delivery on Tuesday fell 2.15 cents to $2.476 a pound on the ICE Futures exchange in New York. However, it posted a string of 13-year highs earlier this year, most recently on Thursday, when it settled at $2.51 a pound. At the start of 2010, the benchmark future trading around $1.42 a pound.

Even as prices have climbed, middle-class Brazilians are increasingly willing to pay top dollar for the best Arabica coffee beans grown by their country’s farmers. And mirroring a trend in other emerging markets, they’re now competing with consumers in the U.S. and Europe who have the same thirst for quality beans. Read more on what a rising middle class means for investing in emerging markets.

“We always consumed the worst coffee, but this has improved a little,” said Carneiro. In his city of Sao Paulo, a cosmopolitan, sprawling metropolis, high-end coffee places dishing out espressos and other specialty drinks are starting to replace traditional “cafeterias,” once-ubiquitous stores that served drip coffee in demitasses.
Running dry

Rising domestic demand in Brazil, if it accelerates further, threatens to cut into a global supply of coffee that’s already running lean due to tough weather conditions.

Crops in coffee-producing rival Colombia, for instance, have battled bad weather and disease. Productivity there has also suffered from a program to replace and rejuvenate coffee plants. Production in Colombia has fallen 26%, to 9 million 60-kilogram bags in December 2010 from 12.2 million in 2006-2007, according to the U.S. Department of Agriculture.

And concerns about Brazil’s crop, as plantations faced excessive rains, help drive coffee futures to their recent 13-1/2-year highs. Read earlier story about coffee futures.

Stocks of Arabica, the most common variety grown in the Americas, and robusta coffee stocks have been the lowest since the 2001-2002 crop. Robusta beans, usually used to make instant coffee, mostly come from Asia.
Brazil’s coffee production has actually been growing, setting the country apart from its rival coffee growers. Output has increased 17% to an estimated 54.5 million bags from 46.7 million in the 2006-2007 period, the USDA said.

That’s about on pace with rising domestic demand. Brazil’s consumption of coffee has risen 17% to 19.5 million from 16.7 million in 2006-2007, easily outpacing global demand growth and on track to match U.S. coffee drinkers’ thirst.

Coffee demand worldwide is rising at a rate of about 2% a year, says Newedge’s Costa.

Americans consumed about 24 million bags of coffee in 2010, a number that has remained steady in the last five years.

Even with newfound support from Brazilian drinkers, the rally in coffee prices may start to flag. Coffee prices have been in an uptrend for nearly a year, and Costa said they could stagnate after the third quarter.
Rich brew

Such a plateau would bring relief to coffee drinkers. Roasters and retailers have responded to the higher prices by passing the cost to consumers, and Smucker is just the latest.

Kraft Foods Inc. /quotes/comstock/13*!kft/quotes/nls/kft (KFT 30.62, +0.13, +0.42%) , which owns Maxwell House coffee brand and reports quarterly results later this week, raised prices 12% last month. Before Tuesday’s hike, Smucker raised prices by 13% in January.

Starbucks Corp. /quotes/comstock/15*!sbux/quotes/nls/sbux (SBUX 33.37, -0.21, -0.62%) last month warned higher prices for coffee, as well as for milk and sugar, will hit its bottom line. Starbucks raised prices last year. Read more on Starbucks.

For now, Brazilian farmers and consumers are enjoying the boom in quality coffee’s appreciation and availability.

“As the economy stabilized and the middle class grew, things that were once superfluous started to become more important,” Carneiro said, who has spent his money on grinders, roasters, and espresso machines, including two antique Italian contraptions he’s slowly bringing back to working order.

Carneiro also has bought award-winning green coffee direct from farming cooperatives and associations, and has taken barista and cupping courses.

Marcio Luiz Favaro, a farmer in southwest Sao Paulo state, says that nowadays even the poorest Brazilians dislike the cheap brews. “Pretty soon there will be no room for farmers who don’t invest in quality,” said Favaro, a son and grandson of coffee farmers.

Favaro bought a mechanical harvester two yeas ago, one of his most pressing needs since farm workers are increasingly hard to come by.

People want to live in the city, where new manufacturing plants have opened up, Favaro said. Nearby orange groves also compete for farm hands in his town, Piraju, 210 miles west of the city of Sao Paulo.

He plans to spend any windfall in the next few years on replanting some of his coffee plants to make more of his properties accessible to the harvester.

“I am happy, this is the line of work I chose, and my hopes are prices are going to continue to go up,” he said.

Source: http://economictimes.indiatimes.com/news/news-by-industry/cons-products/food/lavazza-to-invest-20-mn-euros-in-its-indian-facility-at-ap/articleshow/7379896.cms

HYDERABAD: Lavazza, world’s largest espresso coffee maker will invest 20 million Euros in its Indian manufacturing facility at Andhra Pradesh and expects it to become the second largest market for the company after Italy over next five years, a top official said here today.

Lavazza Group Vice President Giuseppe Lavazza said the operations in the existing facility in Chennai will be moved to the new plant being set up at Sri City multi-product Special Economic Zone (SEZ) in Nellore district.

“We will invest 20 million Euros in this region. Initially, the new facility will cater to the Indian sub-continent but will gradually export to all Asia-Pacific regions. Our target is to evolve the Indian market as our second largest market (after Italy) for us in the next five years. The current revenues from this region are 30 million Euros,” Lavazza told reporters.

According to the Italy-based company, at present, France is the second largest market for the company with 100 million Euros revenues after Italy which accounts for more than 600 million Euros.

Currently, the global turnover of Lavazza is at 1.13 billion Euros with 60 per cent from Italy, while the remaining 40 per cent is from outside Italy.

Giuseppe said the company intends to maximize revenues from abroad.

“We have a 50 per cent market share in Italy, a market which comprises 30 per cent of Espresso consumption. But going further, we would like to see our revenues 50:50 ration from Italy and international,” he explained.

The proposed facility, which will become functional by May 2012, will have a production capacity of 1,600 tons per annum and will employ over 150 people. In Italy alone, the company sells about 70,000 tons per annum, Lavazza said.

In 2008, the company acquired Barista brand of coffee outlets and Fresh & Honey stores in India. It has over 200 outlets across the country under Barista brand, besides an installed base of 5,000 away from home coffee vending machines.

Source:http://culturemap.com/newsdetail/01-17-11-starbucks-new-trenta-size-supports-american-obesity-the-coffee-chain-original-founders-should-be-ashamed/
By Dillon Sorensen

It’s only 17 days into 2011, and Starbucks Coffee CEO Howard Schultz and his team in Seattle have been a busy group. Two weeks ago, they unveiled a new logo, and Monday, they unveiled a brand new beverage size. Currently, Starbucks offers three sizes: Tall (354 mL), Grande (473 mL), and Venti (591 mL). And beginning May 3rd, you will be able to get your beverage of choice in a new 916 mL Trenta size.

How big is 916 mL, you ask? Well, an average bottle of wine is 750 mL, and the average capacity of the human stomach is 900 mL. In other words, the Trenta is Starbucks’ version of the Big Gulp.

No, this is not a joke. When a friend sent me this Gizmodo article, I immediately did some research to verify the authenticity of the tall (really tall) drink tale. On the official Starbucks Twitter, I found my answer: “Yes it is true — the Trenta is coming later this year. We’re only offering Iced Coffee and Iced Tea in this larger size.”

I haven’t been this disgusted since the last time I saw Ann Coulter’s face on TV. My hypothesis is finally coming true: Starbucks is the new McDonald’s.

In 1971, a couple of Seattle hipsters founded a small coffee store in Seattle’s Pike’s Place Market. They took lessons from Alfred Peet, a coffee guru hailing from The Netherlands. And they focused on a high quality product. Initially, they only offered coffee beans. There were no espresso machines at the original store.

Howard Schultz joined the company in 1982, and inspired by his recent trip to Europe, urged the company to start selling espresso-based beverages. They refused, and Schultz left. A few years later, he bought the company.

Schultz wanted to bring the European coffee house concept to America. He wanted Americans to have a “third place,” where they could go and enjoy high-quality gourmet coffee beverages with friends and family.

Unfortunately, in our capitalistic economy, quality doesn’t matter: the bottom line does. Driven by Schultz’s gargantuan ego, Starbucks started opening locations throughout the country, driving out competitors by saturating the market in a way that had never been done before. As time progressed, the manual espresso machines were replaced with ones that are merely vending machines — all the barista has to do is press a button to extract a shot of espresso.

And now, they have unveiled a drink size larger than a bottle of wine. This hardly fits in with Starbucks’s original goal of bringing the European coffee shop concept to America. In Italy, men in trim gray and navy suits stand in tiny espresso bars, sipping shots of expertly grown and prepared coffee. One of these men wouldn’t be caught dead drinking iced coffee out of a cup that approaches a liter in size.

My vehement opposition to the Trenta is not about my snobbery. It’s about what this symbolizes for America. In a nation where 75 percent of the adult population is overweight or obese, the Trenta is the last thing that is needed. Of course, drinking coffee in such large quantities is bad for the brain and heart alike. But the caffeine is the least of my concerns: I am more worried about the sugar-filled syrupy beverages that Starbucks distributes under the guise of coffee.

I want to like Starbucks, I really do. It’s so convenient, and the benefits they provide to their employees are fantastic.

But the Trenta is my last straw. I refuse to give money to a company that is supporting America’s health problems and rampant consumerism. Bigger is not better.

Source: http://indiepropub.com/starbucks-encouraging-baristas-to-slow-down/311061/

By Daniel Adair

If long lines at Starbucks are already one of the more annoying parts of your morning, well, you may want to reconsider where you get your coffee. Starbucks has rolled out new guidelines for its baristas that slow down the drink making process, leading to longer waits and longer lines.

Among the changes include a mandate to only make one drink a time; to only steam milk for one drink at a time, instead of one larger pitcher used for multiple drinks; more thoroughly cleaning pitchers and cups after each use; and remaining at a bar while making a drink, rather than moving elsewhere to work on other tasks or begin a new drink while waiting for a blender or espresso machine.

The reasons for the changes are multifaceted. One reason are complaints that the area behind a busy Starbucks bar is more akin to a factory floor than a coffee house, with endless lines of cups, constantly whirring machines, and ruthless speed and efficiency by the baristas. Starbucks believes the new method will result in more accurate, better tasting, and hotter drinks, and believes that once baristas are more comfortable, the new process will actually hasten how fast drinks come out.

Baristas themselves are generally far more skeptical about the changes. “While I’m blending a frappuccino, it doesn’t make sense to stand there and wait for the blender to finish running, because I could be making an iced tea at the same time,” said Tyler Swain, a barista from Omaha, Nebraska. Another claims that at his store, where the changes have already been adopted, it sometimes takes twice as long to get out drinks, dramatically lengthening lines.

Source:http://www.sevensidedcube.net/you-dont-need-to-pay-5-for-a-cup-of-espresso-get-an-espresso-machine-for-perfect-coffee-every-morning/

Anyone who lives in a metropolitan area in the great states of California, Texas or New York has likely fallen into the habit of buying $5 cups of coffee at our favorite local cafes. But the fact of the matter is—in this economy, being at the mercy of a businesses espresso machine may not be the way to go.

Available to consumers—there exist a wide variety of espresso machines available for purchase. And these commercial rated espresso machines are built to deliver equivalent, if not better flavor than your local coffee shop. So really, what can you do to avoid yourself from being in the position of wasting money on expensive espresso? Buy an espresso machine!

There are a wide variety of commercial espresso machines available, and knowing which one will perfectly suit your needs is the best course of action. So how do you know which espresso machine is the best, and how can you save cost on these sometimes costly machines?

An espresso machine comes in many forms. So one of the main questions you must ask what kind of extra features on an espresso machine will you actually be using? It is these various features, for example the ability to steam milk (perfect for cappuccinos or lattes)—that will ultimately make your investment more expensive. However, if you find yourself able to live without these features on your commercial espresso machine—then by all means there are easy ways to save money. Another aspect is the space you have available in your kitchen. Espresso machines are usually very large, if you have limited to space—you may be limited to basic functionality models and brands.

Now cost—cost is everything. An espresso machine will eventually pay for itself, especially if your hooked to Starbucks; but getting a good deal is still a must. If you’re in California, Texas or New York—there are many brick and mortar dealers. But it’s crucial to look for true Restaurant Equipment Suppliers—in order to save the most money. So definitely shop around—but know that finding a supplier is a must in order to get low prices.

So if you need an espresso machine at a low cost—there’s no reason you shouldn’t go with us. Not only that—but our trained team of staff can help you pick out the absolutely perfect machine for your needs and tastes. If you’re looking to make the perfect flavored latte—we have machines made to do that. If you’re looking for powerfully brewed espresso—we also have machines that can do that as well. The truth is, morning coffee is sometimes the most important thing we can treat ourselves to…so why pay expensive prices when you can make gourmet cups of espresso all from the comfort of your kitchen.