Starbucks (with Howard Schultz)

Jun 4, 2024 193m

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Episode Description

Starbucks. You’d be hard pressed to name any brand that’s more ubiquitous in the world today. With nearly half a billion global customer purchases per week across its stores and 3rd party retail channels, a significant portion of the human population gets their daily fix in the green and white paper cup. (Including our own Ben Gilbert who famously enjoys his daily spinach feta wrap. :)

But it wasn’t always this way. Long before the frappuccinos and the PSLs and the cake pops, Starbucks was just a small-time Seattle roaster that only sold beans — and was started not by Howard Schultz but rather the guys who later ran Peet’s (!). Starting from six tiny stores when Howard took over in 1987, this quirky coffee company named after a character from Moby Dick has scaled to nearly 40,000 locations worldwide.

Today, in a first for Acquired, the protagonist himself joins us as a third cohost to tell the whole story of Starbucks. And Howard is in the perfect moment to do this — after three separate stints as CEO he’s now retired, off the board of directors, and in his own words “not coming back.” So place a mobile order (or not! as you’ll hear Howard speak about), sit back with your own favorite Starbucks items, and enjoy.

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‍Note: Acquired hosts and guests may hold assets discussed in this episode. This podcast is not investment advice, and is intended for informational and entertainment purposes only. You should do your own research and make your own independent decisions when considering any financial transactions.

AI-Generated Summary

The Growth and Evolution of Starbucks

The podcast begins with Ben Gilbert and David Rosenthal discussing the astonishing growth of Starbucks, from its humble beginnings as a bean seller in Seattle to its global presence with nearly 40,000 stores. Howard Schultz, who was integral in this evolution, highlights how Starbucks has become the default coffee provider for a significant population, contributing to nearly 500 million customer purchases per week. Schultz reflects on the initial challenges faced by Starbucks, including persistence and the goal of spreading coffee culture.

Importance of Customer Experience and Humanity

Schultz emphasizes that Starbucks has always focused on creating a unique customer experience. He explains the importance of the barista-customer relationship and how even a small interaction can lead to customer loyalty. The human touch is seen as a core value, and Schultz believes that Starbucks should remain a coffee company serving people and not simply a business focused on transactions.

The Resilience and Challenges of a Public Company

The conversation explores the challenges of being a public company like Starbucks, particularly in times of crisis. Schultz describes his return as interim CEO during difficult financial times, explaining that the focus on employee welfare and culture should guide company decisions. The podcast also touches on Starbucks' stock performance, the importance of remaining true to the brand, and navigating investor expectations while honoring employee needs.

Innovation and Adaptation in a Competitive Market

The podcast discusses the role of innovation in Starbucks’ success, including the introduction of mobile ordering and how technology can enhance the customer experience. However, Schultz warns that relying too much on technology can lead to a loss of personal connection, an aspect that should never be diminished in the Starbucks experience. He also mentions how Starbucks has adapted to shifts in consumer preferences, like the rise of cold beverages and the importance of customization.

Starbucks' International Strategy and Cultural Impact

Schultz shares insights about Starbucks' international expansion, particularly in China and Italy. He describes how adapting to local cultures has been key to Starbucks’ success in new markets. The importance of local partnerships and understanding cultural nuances is highlighted, showcasing how Starbucks maintains its identity while respecting and embracing diverse coffee cultures.