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.huffingtonpost.com/2011/02/15/starbucks-green-mountain-partnership-keurig_n_823348.html?ir=Business

By Lisa Baertlein and Mihir Dalal

LOS ANGELES, Feb 14 (Reuters) – Starbucks Corp (SBUX.O) and Green Mountain Coffee Roasters (GMCR.O) are in partnership negotiations, a source close to the talks told Reuters on Monday, sending Green Mountain shares surging.

Starbucks, the world’s biggest coffee chain, wants to be a big player in the new and fast-growing single-serve coffee segment that Green Mountain currently dominates with its Keurig one-cup brewers.
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Starbucks on Sunday said it planned to announce a new product for the single-cup coffee market in the near future, reviving speculation of a tie-up between the two companies.

The person close to the partnership talks would not say if the pending announcement would involve Green Mountain.

A Starbucks spokesman declined comment on the negotiations. Before news of the talks broke, Green Mountain spokeswoman Suzanne DuLong said the company had no comment on speculations around potential partnerships.

Green Mountain shares surged as much as 13.5 percent to a new lifetime high of $47.81 before backtracking. Shares, which were briefly halted after Reuters reported the talks, closed up 6.7 percent to $46.35.

Shares of Starbucks rose 0.7 percent to $33.58.

IRRESISTIBLE OPPORTUNITY

Canaccord Genuity analyst Scott Van Winkle said: “Keurig is the dominant brand in single-serve coffee with rapidly rising consumer adoption of its brewers seeding a market opportunity that Starbucks can’t resist.”

On Sunday, Starbucks said it wants to keep all its options open, including partnerships with other firms, extensions to its Via instant coffee line or even selling single-cup brewing machines. [ID:nN13250152]

The news came as Starbucks prepares for the March 1 termination of an agreement by which it provides coffee discs for Kraft Foods Inc’s (KFT.N) Tassimo one-cup home brewer. Starbucks is also ending its grocery distribution agreement with Kraft on March 1.

Green Mountain enjoys a near monopoly in the single-cup coffee sector — with more than 80 percent market share — and has hammered competition from bigger companies such as Kraft and Sara Lee (SLE.N), which sells the Senseo brewer.

JPMorgan analyst John Ivankoe said in a December note to clients that a single-cup product could easily be a $1 billion revenue opportunity for Starbucks in the U.S. alone.

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://blogs.bnet.com/business-news/?p=3025

As it plots its comeback from the great store-count implosion of 2008, Starbucks Corp. (SBUX) is doing some tinkering with its stores. It’s great to see, even if not all the ideas seem like winners.

On the plus side, the company is toning down its corporate green-and-white color scheme and building stores that look more like homey neighborhood coffeehouses, done in more subtle earth tones. Starbucks’ 15th Avenue Coffee & Tea store in Seattle started this trend, which another experimental store in Seattle’s busy Capitol Hill neighborhood, Olive Way, will continue when it reopens in the fall after a remodel.

Another winner was Starbucks’ decision to go to free Wi-Fi — it had to happen.

Also good: expansion into beer and wine at the Olive Way store, to accompany an expanded menu. The liquor additions seem natural — after jittering up on coffee all day, you might want to come down with a glass of wine.

But here’s one innovation that’s more questionable — Olive Way’s move into a layout described as “coffee theater.” That is, the espresso machines will be smack in the middle of the restaurant instead of behind a counter. Surrounded by narrower counters, the idea is to bring customers closer and turn coffee making into entertainment.

That sounds great if you’re a latte-seeking mom with a couple of squirmy toddlers. The kids would probably be entranced, though you might have to child-leash them to keep their fingers off the machinery. But here’s the bigger problem: Espresso machines are loud. And lots of people hang out at Starbucks to do business — working on laptops or calling clients from cellphones. It sounds like this store design will leave no quiet corner from which to make a call or think about that proposal you’re writing.

However that works out, we’ll hear more about it, as Starbucks is quietly ramping up its advertising. Historically, Starbucks advertised very little, allotting only about 1 percent of revenue to marketing, but it recently indicated its marketing spending will increase this year.

We’ll have to wait and see those ads to determine whether more advertising is a good move. It’s an opportunity to help renovate the brand, though — for a couple of years now, the company has been best known for closing stores, or for letting gun-nuts wave their pistols around while waiting in line for lattes. With a new ad campaign, Starbucks has a chance to redefine what it stands for in customers’ eyes.

by ASHLEY M. HEHER

Source: http://www.google.com/hostednews/ap/article/ALeqM5g9Xj4HqqJPY85EkUQpqPloCnWYHwD9GIAPI00

As experiments go, this one isn’t flashy.

But the success — or failure — of one Starbucks cafe on the edge of a trendy Seattle neighborhood could ripple through the nation’s coffee house industry.

Because where Starbucks goes, others follow.

Dubbed “Olive Way,” the store is the biggest percolator yet for ideas that the world’s largest coffee company has been testing separately at nearly a dozen locations around the globe. And what succeeds at Olive Way will most likely be spread to other Starbucks stores around the country.

With muted, earthy colors, an indoor-outdoor fireplace, cushy chairs, and a menu with wine from the Pacific Northwest’s vineyards and beer from local craft brewers, this 2,500-square-foot shop in the Capitol Hill neighborhood will reopen in the fall with espresso machines in the middle.

“It’s going to feel very different,” said Kris Engskov, Starbucks’ regional vice president.

The machines at Olive Way will be part of what executives call a coffee theater. Counters will be narrower — a slim as a foot in some places — to bring customers closer to baristas; the machines will brew one cup at a time to extract deeper flavor from beans.

The store will be the chain’s only location that sells beer and wine in the U.S., though another Seattle test cafe that doesn’t carry the Starbucks brand began selling alcohol last year. The menu at Olive Way will be bigger, full of savory foods that pair with coffee, wine and beer. And customers will be able to customize the offerings, some of which will be freshly made.

The decor is to offer a departure from Starbucks’ sometimes formulaic green-and-tan — with local artists’ work, regionally reclaimed building materials, a community work table and a meeting area set off by a sliding door.

As at any restaurant chain using its stores as real-life laboratories, there’s no guarantee every idea from Olive Way will be successful or be implemented across the company. And the company wouldn’t say how much it’s spending on the effort, or how soon elements from the shop might expand to other locations.

But executives are optimistic that some will find their way to other locations, especially in vibrant urban neighborhoods where the chain can attract affluent customers who may prefer a low-key hangout over a crowded bar.

The pilot shows how hard Starbucks is working reinvigorate its brand, which stumbled under the weight of hyper-paced over-expansion. The chain closed hundreds of stores and cut scores of jobs, and founder Howard Schultz returned to help the company re-emerge.

Now, Starbucks plans more measured growth and is working to relax its corporatized image by returning to its days as a place where people want to linger for hours sipping coffee. It plans to offer free, unlimited Wi-Fi in all company-run stores; it’s letting customers tailor drinks even more, and it’s opening stores with more community flavor. A Seattle shop uses an old bleacher from a nearby high school for shelving, and a New York City store’s floors and counters are made of wood reclaimed from a century-old Pennsylvania barn.

All the changes are part of an appeal for more afterwork customers at a chain that gets the bulk of its in-store business before 11 a.m.

“The key in the restaurant business is to differentiate themselves, and clearly they’re making a move to do that,” said Morningstar restaurant analyst R.J. Hottovy. “I think the idea of trying to localize the business, that’s an aspect that will certainly work and help differentiate the brand and make it a lot less cookie-cutter than what you see in standard Starbucks.”

It will be a challenge. Gourmet coffee shops still sold 53 percent of specialty coffee drinks like mochas and lattes last year, but that was down from 57 percent a year earlier, according to data from market research firm The NPD Group.

The coffee business has become increasingly competitive as restaurants — from independent doughnut shops to Goliath’s like McDonald’s Corp. — go after Starbucks. Servings of specialty drinks rose 17 percent at fast-food chains and 23 percent at doughnut shops this year, and they fell 8 percent at gourmet cafes.

Starbucks plans to file building permits Friday with Seattle city officials to renovate the store.