Invest in Starbucks

In 1971 a writer, Gordon Bowker and two teachers, Zev Siegel and Jerry Baldwin opened a new and unique coffee company, which they named Starbucks Coffee, Tea, and Spice. This unique store was opened in Seattle’s Pikes Place Market.  The three were inspired by Alfred Peet, the Dutch immigrant who had a successful coffee store in Berkeley, California where he sold fine, dark roasted European teas and coffees and taught  customers how to make their own freshly ground coffee at home. The three were so impressed with Peet that they even bought their supplies from him.  Every since Starbucks first opened, it quickly became a household name, even non-coffee drinkers know about Starbucks.  Starbucks moved beyond the Seattle area and beyond selling just coffee. Since it opened, it has gone a long way in producing fine quality products, even with the difficulties that the company has faced.  

The first Starbucks store was immediately successful. They sold whole beans, showed people how to grind their own coffee. The store did not sell coffee by the cup in their store. However, they did offer samples of the coffee for customers to taste. A first the company purchased its beans from Alfred Peet who continued to give them advice on how to roast coffee. Eventually the owners of Starbucks bought a used roaster and started roasting their own beans. They experimented with what they had learned from Peet and eventually came up with their own flavors and blends.  In 1972, Starbucks opened its second store in the Seattle area.

The company had four very successful Starbucks stores by the 1980’s, all in the Seattle area. The stores did undergo some executive changes, facing burnout Zev Siegel left the company. The day-to-day management of the company was taken over by Jerry Baldwin and Gordon Bowker still owned an interest in the company but remained a silent partner.

In 1981, the general manager and vice president for the Swedish company Hammaplast, Howard Schulz, visited Starbucks and fell in love with the passion and commitment of the company. The rich flavor and aroma of the coffee and the ambiance of the whole Starbucks experience took him in.  Form the first time he visited the Seattle store, Howard Schulz wanted to become a part of the Starbucks Corporation. 

The owners of Starbucks were hesitant at adding Schultz to the company but after much persistence and dedication on his part to convince them that he would be an asset to the company and that he had their passion for the product Howard Schultz was hired as the Head of Marketing.

Schulz spent several months becoming familiar with the company, learned how to roast coffee, and became an important part of the stores future success. Customer service was not one of the stores strong points, many customers felt uncomfortable in the store because the employees would come across as arrogant. Schulz helped them work on their customer service skills so that the company would be more welcoming.

Starbucks would undergo a huge transformation in 1983 when Schulz visited Italy and got the idea that the store needed to start selling its coffee in the form of a coffee bar. They should sell espresso and other blends of their special beans to give the customers a special experience. From this point on the company began to expand to more than fifty countries around the world where they not only sell coffee beans, they also offer tea products, healthy food items and souvenirs which are not only sold in their retail stores but national stores around the world. Starbucks, which make the company an excellent investment. 

Starbucks began offering health plans to its employees in 1988 and 1999. They also began offering full time and part time employee’s stock options, which was the first time an employer made this type of an offer to employees in the United States.

In 2000 Schulz stepped down and CEO of Starbucks. Starbucks went through a rough economic crisis in the year 2008, which brought Schulz back to the company where he re-focused the company’s efforts on customer service. Starbucks had planned to close at least 600 stores and cut thousands of jobs in 2009. However, due to the return of Schulz, the store’s success began to improve and its shares rose to above $24.00 per share.

Starbucks re-designed its logo in March of 2011 and added two new types of coffee and calorie conscious foods.

Kraft Foods tried to stop Starbucks from selling its products in grocery stores but lost that appeal in 2011.

Starbucks has come a long way from a small store in the Seattle area. Current shares sell for above $47.00 per share and continue to rise. Investing in Starbucks is a wise choice. The company has overcome obstacles and continues to grow at a profitable rate.