Charbucks
"Growth had a life of its own -- and that's O.K., when you're hitting the cover off the ball every time, but at some point, nothing lasts forever."
One thing hasn't changed: the man dreams big. In that same interview, Mr. Schultz spoke of expanding into still more products and in markets like China. He is pushing, of all things, a brand of instant coffee. The words "Starbucks Coffee" were just removed from the company's green mermaid logo because he wants to waltz his brand up and down the grocery aisles. On Thursday, he announced that the company had struck a deal with Green Mountain Coffee Roasters to distribute Starbucks coffee and teas for Keurig single-serving systems. Shares of Starbucks jumped nearly 10 percent on the news, reaching their highest level since 2006. The stock closed at $36.56 on Friday.
Mr. Schultz and his colleagues say Starbucks will keep its feet on the ground this time, but some outsiders have doubts. Detractors say Starbucks long ago ceded its role as a gourmet tastemaker to become a "billions-and-billions served" chain like McDonald's. Starbucks -- "Charbucks," to those who complain that its heavily roasted coffee tastes burned -- will never rekindle the old romance, these people say.
"Has anybody said they came back because people love the coffee again?" asks Bryant Simon, a history professor at Temple University and author of "Everything but the Coffee: Learning About America From Starbucks."
"They came back because they're remaking themselves as a brand that competes on value, largely -- a brand that's everywhere, easily accessible, predictable," Mr. Simon says.
HOWARD SCHULTZ, now 57, is a tall, sinewy man with a toothy grin and a silky sales pitch. He rarely sticks to script, preferring to speak off the cuff, whatever his audience. In conversations, he leans in, locks eyes and gives the impression that, right now, there is no one else in the world he would rather be talking to. When he speaks of "soul" and "authenticity" and "love," you could almost forget that he runs a multibillion-dollar business that has become an uneasy symbol of globalization. Or that the British actor Rupert Everett once likened Starbucks to a metastasizing cancer.
The story of Mr. Schultz's life and career has been told many times, not least by Mr. Schultz. (His second book, "Onward: How Starbucks Fought for Its Life Without Losing Its Soul," is to be published on March 29.) But some highlights bear repeating:
He grew up poor in the Bay View housing projects in Canarsie, Brooklyn, received a football scholarship to Northern Michigan University and, after a variety of jobs, joined the fledging Starbucks in 1982, as head of marketing. Inspired by Italy's coffee culture, he left Starbucks and opened his own coffee shop. Then, in 1987, he bought Starbucks, which at the time had all of six shops. By 1995, Starbucks had 677 shops. By 2000, it had 3,501, and that year Mr. Schultz stepped aside as C.E.O.
And so it went for Starbucks, one success after another, until the recession hit and exposed the company's overreach to the world.
Whether Starbucks can recapture a neighborhood feel, as Mr. Schultz insists, is anyone's guess. For many people, especially in areas where carefully made, lighter-roast coffee from the likes of Stumptown and Intelligentsia is trendy, Starbucks has become a place to go for free Wi-Fi, or to use the restroom, or to buy a coffee on the go.
Mr. Simon of Temple University says: "When you're selling stuff people don't need, you've got to be selling something else, and that's what Starbucks lost. There's a kind of dissonance between the messaging and the actual practice."
Mr. Schultz no longer plans to blanket the United States with new Starbucks stores, sometimes with multiple locations on one block -- a practice that inspired a contest on Flickr to see how many Starbucks shops people could fit into a single photograph. Instead, like so many other executives, he has his sights on China. Starbucks already has roughly 430 stores in mainland China and plans to have 1,500 there by 2015. India beckons as well. The company also plans to sell a wider variety of drinks and foods in grocery stores and its own shops, like Kind fruit and nut bars, which Starbucks put on the map.
IT may be difficult to believe, but there was a time when McDonald's was a novelty. But, like Ray Kroc, who took over a small hamburger business and built it into the most successful fast food operation in the world, Mr. Schultz has learned that growth can be seductive, and that it can exact a price.
BUSINESS DAY
A Changed Starbucks. A Changed C.E.O.
By CLAIRE CAIN MILLER
Published: March 12, 2011
Howard Schultz was humbled as Starbucks closed stores in the recession. Now he is thinking more like a manager and less like an entrepreneur.