Starbucks CEO Howard Schultz on First Roastery in Italy

TL;DR

Starbucks enters Italian market with Milan roastery.

Transcript

Howard sches thank you so much for speaking to Bloomberg Milan does this bring you back to 1983 uh this is the quintessential moment for Starbucks and as you know it started in ' 83 when I came here as a Young Man uh walking around the streets of Milan and Verona and I became enamored with the Italian coffee bar and was fortunate enough to realize ... Read More

Key Insights

• Howard Schultz's inspiration for Starbucks originated from his visit to Milan in 1983, where he observed the Italian coffee culture and community, which he aimed to replicate in the U.S.
• Starbucks began with three stores in Seattle, focusing on selling coffee for home use, but Schultz shifted the focus to creating a community-centered coffee experience.
• The opening of the Milan Roastery marks a full-circle moment for Schultz, emphasizing respect and humility towards Italian coffee culture.
• Starbucks plans to expand in Italy with standalone stores, leveraging partnerships with local artisans like Rocco Princi for an authentic culinary experience.
• Schultz stresses the importance of technology in Starbucks' business model, with a significant portion of U.S. customers using mobile payment and ordering systems.
• China is a major growth market for Starbucks, with plans to expand beyond the U.S. in the number of stores, demonstrating the company's global strategy.
• Schultz emphasizes the balance between profit and social impact, highlighting Starbucks' initiatives like hiring refugees and providing employee benefits.
• Schultz reflects on his personal journey from a poor background to leading a global company, driven by values of empathy, compassion, and opportunity.

Questions & Answers

Q: What inspired Howard Schultz to create Starbucks?

Howard Schultz was inspired to create Starbucks after visiting Milan in 1983. He was captivated by the Italian coffee bar culture and the sense of community it fostered. This experience led him to envision a similar coffee experience in the U.S., focusing on creating a 'third place' between home and work.

Q: Why is the Milan Roastery significant for Starbucks?

The Milan Roastery is significant for Starbucks as it marks the company's entry into Italy, a country with a rich coffee culture. For Schultz, it represents a full-circle moment, returning to the place that inspired Starbucks' concept. The roastery aims to honor Italian coffee traditions while presenting Starbucks' unique interpretation.

Q: How does Starbucks plan to expand in Italy?

Starbucks plans to expand in Italy by opening standalone stores following the Milan Roastery. The company is partnering with local artisans, like Rocco Princi, to offer authentic culinary experiences. Schultz emphasizes the need to approach the Italian market with humility and respect for its coffee culture.

Q: What role does technology play in Starbucks' business model?

Technology plays a crucial role in Starbucks' business model, with over 25% of U.S. customers using mobile payment and ordering systems. The company has invested in creating a mobile ecosystem that enhances customer convenience and loyalty. Starbucks plans to expand its technological innovations globally, including social gifting features.

Q: What is Starbucks' strategy for growth in China?

Starbucks' strategy for growth in China includes expanding the number of stores to eventually surpass the U.S. The company has been in China for 17 years, with a strong presence in over 125 cities. Starbucks is also introducing consumer products and fostering local partnerships to enhance its market relevance.

Q: How does Starbucks balance profit and social impact?

Starbucks balances profit and social impact by integrating values-driven initiatives into its business model. Schultz highlights programs like hiring refugees, providing employee benefits, and supporting education. The company aims to create a positive societal impact while achieving financial success, emphasizing the importance of empathy and compassion.

Q: What personal values drive Howard Schultz's leadership at Starbucks?

Howard Schultz's leadership at Starbucks is driven by values of empathy, compassion, and opportunity. His personal journey from a poor background influences his commitment to social responsibility and creating opportunities for others. Schultz believes in building a company that prioritizes humanity and values over mere financial gain.

Q: What challenges does Starbucks face in the Italian market?

Starbucks faces challenges in the Italian market due to the country's established coffee culture and skepticism towards foreign brands. Schultz acknowledges the need to earn success in Italy by respecting local traditions and offering a unique Starbucks experience. The company is conducting market research and leveraging brand awareness among younger Italians.

Summary & Key Takeaways

• Howard Schultz discusses Starbucks' entry into the Italian market with a new roastery in Milan, inspired by his initial visit to Italy in 1983. The roastery aims to blend Italian coffee culture with Starbucks' unique experience, emphasizing community and connection.

• Starbucks' global strategy includes significant expansion in China, where the company plans to surpass the U.S. in store numbers. Schultz highlights the importance of localizing the Starbucks experience while maintaining brand consistency worldwide.

• Schultz emphasizes Starbucks' commitment to social impact, discussing initiatives like hiring refugees and offering employee benefits. He reflects on his journey and the company's values-driven approach, aiming to balance profit with positive societal contributions.