Starbucks – The Start Up Story Of The Coffee Empire
Starbucks (www.starbucks.com) was founded in Seattle in 1971 by Jerry Baldwin, Gordon Bowker, and Zev Siegl. It has become the world’s leading coffeehouse and its record label division called Hear Music has developed into a successful way to distribute artists like Paul McCartney. John Mellencamp, Joni Mitchell, Carly Simon, Elvis Costello and The Cars.
The Starbucks chain began with one store in the Pike Place Market, a popular haven of independent businesses in Seattle. That first store remained in that location through 1976 then moved to another area of Pike Place. Starbucks got its name from a character in the Herman Melville novel Moby-Dick. The initial purpose of Starbucks was to sell quality coffee beans not found in other coffee shops.
The three founders had been influenced by San Francisco Bay Area coffeehouse pioneer Alfred Peet, who started Peet’s Coffee & Tea in 1966. Peet taught the founders of Starbucks secrets about roasting coffee beans. At first, the Starbucks founders bought their coffee beans directly from Peet, then after a year, they started buying from growers. Then Baldwin and the other two founders bought Peet’s in 1984.
Howard Schultz discovered Starbucks in 1981. A few years later Schultz traveled to Italy and was captivated by their coffeehouses. Schultz was attracted to the idea that a coffeehouse could provide a community connection with like-minded individuals. Romance also was part of the vision of a new type of coffeehouse. He began to experiment with his own coffeehouses, then purchased Starbucks in 1988 with help from other Seattle investors. Starbucks then began its rapid growth, expanding to Chicago and other markets.
By the time Starbucks became a publicly traded company on the stock market in 1992, the chain had 165 store locations. By 1996 Starbucks began aiming at international expansion, opening a store in Tokyo then a U.K. store in 1998. By 2003 Starbucks had over 6,000 locations following the acquisitions of Seattle’s Best Coffee and a store from AFC Enterprises called Torrefazione Italia. That same year Starbucks announced its purchase of Diedrich Coffee, leading to even more stores being converted to Starbucks. Throughout 2011 Starbucks opened several stores in China.
The company expanded further into Europe, South America, Russia, and Africa. India’s arabica green coffee bean giant Tata Coffee announced an alliance with Starbucks in 2011. The companies began to explore the possibilities of what Starbucks has come to be known for: serving quality coffee in convenient locations. The agreement involved collaboration on farming as well as marketing the product. Tata Coffee’s facilities became the site of this collaboration.
Howard Schultz wrote a book called Pour Your Heart Into It with Dori Jones Yang. Released in 1997, the book was about how Schultz turned Starbucks into a global empire. Schultz had a successful real estate background that helped shape his ideas on business expansion. He was committed to owning every Starbucks store instead of making franchise agreements. In 2012 Forbes Magazine reported that Schultz had a net worth of $1.5 billion and was among the top 500 richest people in the country.
In 2012 Starbucks is the world’s number one specialty coffee business, owning over 17,000 stores in over 50 nations. In the United States alone, the chain operates over 6,700 stores. Starbucks is the owner of several brand names such as Seattle’s Best Coffee, Ready Brew, Tazo Tea and Hear Music.
Starbucks’ role in pop culture broadened into music, seizing definitive market share in the uncertain world of music sales. Hear Music had started out as a music catalog service in the early 1990s. It was purchased by Starbucks in 1999. The service then teamed up with Concord Music in 2007 to launch as Starbucks’ record label called Hear Music. The label’s first signing was Paul McCartney, who left EMI like many major label artists were leaving their big contracts to explore independent deals. Within its first year, the label had also signed James Taylor, Carly Simon, and Joni Mitchell.
Starbucks has become known for its support of environmental causes, such as recycling. The company has shown to have a broader purpose than just selling premium coffee. It has shown to be a company with many products that point to eco-friendly awareness. In 2012 Starbucks was reported to be working with scientists in Hong Kong to develop eco-friendly laundry detergent out of coffee grounds. The environmental collaborators were also working on developing eco-friendly plastics and other recyclable materials.