How Starbucks Became an International Coffee House Sensation
Considered by many coffee lovers to serve the best coffee in the world, Starbucks is an international conglomerate that took over the coffee scene in bold and unexpected ways. After starting with one little store in Seattle, the coffee giant climbed their way to the top in just a few short decades.
With more than 27,000 locations worldwide, Starbucks is ready to make your favorite cup of joe, no matter where you go. Let’s learn more about the history of Starbucks and how it became an international coffee house sensation.
Starbucks Was Founded in 1971
The very first Starbucks store opened at 2000 Western Avenue in Seattle on March 31, 1971, right across the street from Pike Place Market. Jerry Baldwin, Gordon Bowker and Zev Siegl founded the company after meeting in college and realizing they all loved coffee and tea. It didn't hurt that they were all academics.
The Name Was Taken from Moby Dick
The three men sat down and tried to brainstorm names that would speak to local coffee and tea lovers to help them get their store off the ground. They didn't offer brewed coffee to customers, so they had to have a name that would draw people in to buy their coffee beans and equipment.
Starbucks Originally Sold Coffee Beans and Machinery
Considering Starbucks is now one of the biggest chains in the world for espresso beverages, it's hard to picture it as anything besides the unique coffee shop brand it is today. Nonetheless, the company didn't start out like that. Back when it first opened, the main attractions were the locally sourced coffee beans and machinery.
They Gave Away Free Samples of Brewed Coffee
The best way to get customers to give their coffee a chance was to give them free samples. They didn't charge anyone for coffee and only had small samples for people to try so they could decide to purchase (or not purchase) the coffee beans and brewing equipment.
It All Began with a Single Store
Baldwin, Bowker and Siegl had no business experience and little to no money for a startup, but that didn't stop them from following their dreams. They managed to pool the funds they had, get a bank loan and rent out the location across from Pike Place Market.
Coffee Roasting Entrepreneur Alfred Peet Inspired the Idea
If it wasn't for Alfred Peet, a Dutch American entrepreneur and the founder of Peet's Coffee and Tea, Starbucks might not exist today. The coffee and tea magnate grew up in the coffee brewing business and brought his own special style to roasting coffee beans.
Howard Schultz Joined the Brand
Howard Schultz originally worked for a Swedish company called Hammarplast, a manufacturer of kitchen equipment, housewares and, of course, coffee bean roasters. He was blown away by the number of orders the small shop consistently placed, so he paid them a visit.
A Trip to Italy Led to Big Ideas
In 1983, Schultz went to an international housewares show in Italy on a business trip for the brand. During this visit, he spent a lot of time in cafés, and the idea of turning Starbucks into a European-style café hit him hard. When he got back to Seattle, he pitched the idea to the owners.
Schultz Left Starbucks and Opened Il Giornale
Still convinced the idea of a European-style café was gold, Schultz decided to leave Starbucks and go it alone. In 1985, he started his own venture by opening Il Giornale, the first in a chain of coffee shops.
Starbucks Went Up for Sale
When the Starbucks partners decided to sell the Starbucks store and brand in 1987 to focus on Peets, Schultz knew exactly what to do. He snatched the company up quickly, combining Il Giornale and Starbucks and adopting the Starbucks name to create the international sensation everyone knows and loves today.
Starbucks Stock Went Public
In June 1992, Schultz decided to take Starbucks public to further expand the brand by giving people the option to buy into the growing business. The brand was making more than $73 million a year at that point, and raising funds through an IPO allowed the company to expand even further.
Starbucks Experienced Fast Growth
When Starbucks stock opened on the market, it was only $17 per share, and the company's market value was $271 million. This was huge for the coffee roasting industry. Over the course of the next couple of years, Starbucks grew exponentially.
Starbucks Made a Deal with The Coffee Connection in Alberta
To expand the business outside the States, Starbucks went into business with The Coffee Connection, a family-owned business in Alberta, Canada. The company was a huge supplier of branded coffees, and the decision to partner with each other proved to be a good one.
The Starbucks Frappuccino Arrived on the Scene
The Frappuccino is one of the most successful drinks that Starbucks has offered over the years along with the traditional espresso. After a Starbucks employee noticed that other coffee shops in their area had started offering cold brews, they took the idea to do something similar to corporate.
International Expansion Began After National Success
The very first store outside the U.S. was in Tokyo, Japan. It opened in 1996 and kicked off the early stage of global dominance. The next market tackled was the Philippines, and then expansion moved to the U.K. with the purchase of Seattle Coffee Company — ironically, a U.K.-based company.
Starbucks Set Out to Be Different
The original idea for Starbucks may have come from several different inspirational sources, such as Peet's Coffee and the many charming cafés in Italy, but the company’s business model for the States took on a whole new form. They wanted to stand out from the crowd, and they managed to do that almost effortlessly.
The Company Pushed for a Sense of Community
Walking into a local Starbucks offers a different feeling. The employees, the vibe, the music, it all seems very local and very friendly. The reason for that was a calculated idea from the very beginning. Their mission was to "inspire and nurture the human spirit — one person, one cup and one neighborhood at a time."
They Made a Promise for Ethical Sourcing
Over the last two decades, Starbucks has forged ahead in the sustainability-conscious marketplace with a commitment to offering 100% ethically sourced products. They partnered with Conservation International to offer customers full transparency about the sources of their coffee beans.
The Indie Vibes Remain Strong
When Starbucks first began changing from a retail coffee shop into a café, the special niche targeted consisted of like-minded individuals who didn't necessarily know a lot about coffee but appreciated a good cup of joe, regardless of their knowledge on the subject.
They Took Cafe Culture from Europe to America
Prior to the existence of Starbucks, chain cafés in North America were rare. Coffee shops were sometimes successful, but they didn't have the same vibe that's offered in all Starbucks locations. Their goal to bring people together was put into action and caused a global phenomenon.
The Starbucks App Was Born
In true Starbucks fashion, the company grew with the times. From offering accessible and delicious coffee beverages and creating new drinks to giving people a place to hang out, Starbucks always focused on long-term success. That included keeping up tech advances, and the Starbucks app was created to make it even easier for customers to enjoy their espresso beverage of choice.
Bad Reviews Didn't Stop Them
Like any good business, Starbucks inspired plenty of haters to come out of the shadows. Scorned customers have voiced their opinions on review sites and social media, and Twitter user @iHateRei even went so far as to say that "drinking Starbucks coffee feels like oppression if you're used to good coffee."
Healthy Food Options Boosted Sales
In an attempt to gain some ground in the healthy lifestyle niche that has taken over in recent years, Starbucks began offering more healthy options in addition to their regular food choices of pastries, bagels and muffins. They expanded their menu to serve ready-made salads, wraps and bento boxes.
Conservation Remains a Focus
At Starbucks, they have plenty of take-home cups and travel mugs for sale alongside your coffee beverages to help keep waste down. They are starting to eliminate straws and have created new lids that are designed to work without them.
Support for Social Responsibility Furthered the Brand
The social responsibility aspect of the Starbucks brand is one of the most important missions. The company has launched several different coalitions, including the Opportunity for Youth 100,000 Opportunities Initiative, and is a leading employer of youth and refugees. They also have a 100% commitment to rescuing food for donation.
Celebrities Rave Over Starbucks
Perhaps one of the main pillars of Starbucks’ word-of-mouth success is that many celebrities have raved over their coffee or been spotted by paparazzi grabbing their own cappuccinos. Once celebrities jumped on board, the brand became classy and revered by people who may not have otherwise heard of it or spent a lot of money on coffee.
Social Media Tactics Drive Sales
Starbucks is a company that understands the use of social media in business, and they use it to their advantage. Releases of new drinks are always liked and shared across all platforms, including Facebook, Instagram and Twitter, among others.
Staying on Trend
When the world fell in love with unicorns all over again, Starbucks released a Unicorn Frappuccino. When there are holidays to celebrate, they release special holiday cups and seasonal brews. Staying on trend is one of the biggest strengths Starbucks has when it comes to holding on to the coffee crown and staying ahead of rival competitors.
Starbucks Is Way More Than Just Coffee
Starbucks doesn't just offer beverages and food. The store also has mugs, tumblers, special seasonal ornaments and even CD's from various artists. The goal to sell the best coffee in the world wasn't the only idea they had in mind, and it wasn't the only goal they achieved.
Starbucks Is an International Coffee Giant
After almost 50 years in business, Starbucks has gone through the normal ups and downs that businesses see, but strength and commitment toward customers are what keeps them surpassing their goals. With new initiatives coming out all the time that are in line with what society and the world wants, they are much more than a simple coffee business.