I haven’t been in a Starbucks for years – but clearly 15 million people a week do. Howard Shultz, the 56 year old New Yorker seemed relaxed to tell his story about how Starbucks has grown to 16,000 stores globally. He grew up in a tough neighborhood in Brooklyn, in the equivalent of a council house. And regrets going public with the company in 1992, to pay back early investors. He is man who loves what he does and is on a mission to reengage staff with the customer.
In front of an audience of some 500 top UK marketers at a Marketing Society event, he said he knew nothing about traditional business or marketing when he began in 1982. He failed to inspire the then owners to sell a ‘Milan style’ coffee experience, unheard of in the US at that time, alongside selling their staple of coffee beans. He left and started his own café called Il Giornale and a few years later took over Starbucks. He has strived to create a company with a soul. There have been detractors along the way; a constant target for anti-globalists and 16,000 employees started a campaign to get union rights in the US. More recently in the UK there was ‘dipper wellsgate’ in 2008, were stores were exposed for using continuous fresh-running water to clean utensils (although they’ve stopped now). Howard isn’t afraid to speak his mind, upsetting Lord Mandelson with recent remarks about the UK being in an economic “spiral” down.
He is experimenting to recreate ‘the community’ (very much the early focus) that many feel has been lost; the new London store in Conduit Street has second hand furniture. And stores have even gone unbranded in NY trials, selling alcohol and opening late. A challenging job when you are in 44 countries with a US centric view. Consultants said it would fail in Japan where they have just opened their 1,000th store. Howard was quick to defend his CSR – not as marketing, but as the heart of the company. He was surprised by a question from Café Direct about how they were supporting African workers and their plans for Fairtrade tea. Tea is 1.5% of total sales and he explained their conversion to Fairtrade coffee last year. RED featured heavily in how the company is ‘bigger than coffee’. As did the campaign to encourage young Americans to use their vote last January. And Weyclef’s film asked people to get behind the Haiti campaign. Our host said ‘London was the world capital of cynicism’. I was surprised he didn’t feel the need to explain the inter related elements of all the good work they are doing. He mentioned micro lending, water projects and that the ‘coffee for a votes’ scheme would run during our general election. I hope these are the bedrock of their business and not just new fads. Starbucks could mean much more. Ethical Consumer ranked them at the bottom of the café survey in 2005, which demonstrates how much still has to be told about the Starbuck story. Particularly in the UK.