Starbucks

Lore & Background

The founders—Jerry Baldwin, Zev Siegl, and Gordon Bowker—first met as students at the University of San Francisco and were inspired by coffee roasting entrepreneur Alfred Peet. For its first ten years, Starbucks sold only coffee beans, not drinks. In 1987, the original owners sold the chain to former director of marketing Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and began expanding. Starbucks went public in June 1992 with 140 outlets and revenue of US$73.5 million. In the 2000s, Starbucks continued to grow through acquisitions, including Seattle's Best Coffee and Torrefazione Italia in 2003. During the Great Recession, the company closed hundreds of underperforming stores and cut jobs. In 2012, annual Frappuccino sales exceeded US$2 billion.

Reader's Guide

Starbucks transformed coffee consumption by popularizing espresso-based drinks and creating a 'third place' between home and work. Its aggressive expansion under Howard Schultz made it a global brand, though it faced controversies over business practices. The company's introduction of the Frappuccino and its embrace of mobile payments and Wi-Fi in stores shaped modern coffee culture. However, its entry into markets like Australia faltered due to a lack of understanding of local café culture. Starbucks remains a symbol of the second wave of coffee culture, with substantial brand loyalty and market share.

Did You Know?

• The name 'Starbucks' was inspired by the chief mate in Moby-Dick, after the founders considered words beginning with 'st'.
• Starbucks acquired the rights to the Frappuccino beverage in 1994 through its purchase of The Coffee Connection.
• In July 2008, Starbucks announced it would close 61 of its 84 stores in Australia, citing a failure to understand Australia's café culture.