BizJournals Portfolio

Tall Order

Cupful of Fame Cupful of Fame

The Starbucks chief's life has been brimming over with success. See All Video & Multimedia

It's a Starbucks World It's a Starbucks World

Starbucks serves up lattes in more than 15,000 stores across the globe. Here, a look at the spread of the java chain. See All Video & Multimedia
PREV 3 of 12 NEXT

Another distraction was Starbucks’ music business, the one that plants all those CDs en route to the cash register. With breathtaking speed and even a bit of masochism, Schultz scuttled most of the division in May. “Howard is just really focused entirely—manically—on getting the business back on track, and he will do anything or eliminate anyone to help him do that,” says one victim of the music purge.

“He’s literally trying a do-over,” one Starbucks executive tells me. “He wants to go back to the point where everyone was happy and everyone loved us and then make a left turn instead of a right.”

Despite all the turmoil, Schultz is in a fine mood the day I see him, even before enjoying the mysterious Italian confection. He’s optimistic. Whatever Starbucks is going through now, he suggests, is really but a blip. Skeptics say that for reasons of ego or habit, he’s foolishly addicted to growth, but he doesn’t buy that criticism. Though he’s no longer tossing around numbers, it takes little prodding for him to hint that Starbucks’ expansion has only temporarily been retarded. I ask him whether he ever fears that Starbucks’ moment might have passed. “That does not enter my mind whatsoever,” he replies.

He’s resolute. Starbucks is already selling new energy drinks and plans to introduce new health-and-wellness beverages. There’s another hush-hush concoction—“a game-changer in the coffee space, something in a cup,” he says—that he only hints at. There will be new, more varied store designs and improved, less McDonald’s-like drive-throughs. Then there’s the pastry, heaps of which they couldn’t even give away at the annual meeting. I’d heard that, not long ago, two women sitting in a Seattle Starbucks were griping about how horrible the breakfast items were, when a tall, well-dressed man sitting near them—Schultz himself, or so it was said—chimed in that he agreed. All true, Schultz says. “I have been embarrassed by the food,” he goes on. “The food is going to be completely reinvented by fall. With a stake in the ground. Done.”

He’s also defiant. A survey last year in Consumer Reports concluding that McDonald’s drip coffee actually tasted better than Starbucks coffee was, he says, “a joke.” He’s tried the coffee at McDonald’s and Dunkin’ Donuts—outside Seattle, wearing a hat for camouflage—and it’s “swill.” Many of the independent coffeehouses the purists so love are “charlatans,” who cut their top beans with cheaper varieties and then mislabel them.

Schultz’s office is on the eighth floor of the Starbucks Center, a gigantic former Sears warehouse with a mermaid at the top, in industrial South Seattle. Outside, to the left of the sprawling rail yards, is the port through which comes a large part of Starbucks’ coffee; 352 million pounds of it were imported in fiscal year 2007, which ended on September 30. This is not the only incredible statistic. There are, for example, nearly 16,000 Starbucks stores, in 44 countries. (In the next few years, Starbucks will continue its growth overseas—particularly in places like China.) Nearly 50 million people enter those stores weekly. Last year, they generated almost $10 billion in revenue.

On display in Schultz’s office is a signed glove used by Seattle Mariners outfielder Ichiro Suzuki, whom Schultz and his wife, Sheri, hosted for his first Thanksgiving dinner. Truth be told, Schultz would probably rather have Mickey Mantle’s mitt; as a kid in Brooklyn, he wrote Mantle’s number in Magic Marker on all his clothes, even his underwear. He’d been tempted to bid against Billy Crystal not long ago when the glove came up for auction, and with what Forbes has said is a net worth of around $1 billion, Schultz probably would have won. He says he finds his very appearance on Forbes’ list of the 400 richest Americans—No. 354 in 2006—“somewhat embarrassing.” Last year, there were so many billionaires that he didn’t make the list, so that particular embarrassment remedied itself.

Comments

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

Connect With Portfolio.com

Come on, like us—you know you want to.

Follow us and if you're an innovative entrepreneur, we'll return the favor.

Today's top stories, conversation starters, and the back nine business bites.

spotlight on

Slideshows

500 Startups Hits New York

Dave McClure's brainchild makes its way to New York and introduces East Coast money folks to some intriguing new companies. View Slideshow