106 . How a Poor Boy From New York Suburbs Created a Global Brand Called Starbucks .. $ 100 Billion.
Updated: 4 hours ago
Who is Howard Schultz ?
Howard Schultz took charge of Starbucks in the 1980s and turned a regional coffee company into one of the world's top brands.
Schultz expanded Starbucks from 11 stores to more than 30,000 worldwide and made it a social hub for many Americans.
In 2018, Schultz stepped down as executive chairman and board member of the company he joined in 1982. He is now chairman emeritus.
Schultz explored a 2020 presidential bid, but said in September 2019 that he would not run because it would risk the re-election of Donald Trump.
The Schultz Family Foundation invests in training and hiring veterans and youths with the goal of hiring 1 million young people by 2021.
Through his VC firm Maveron Capital, Schultz invests in other consumer businesses such as Groupon, Madison Reed, Allbirds and Lucy.
Pic : A Legend Called Howard Schultz
Real Time Networth
$5.2 Billion as of 6/11/21
$31 M | 0.60%
Reflects change since 5 PM ET of prior trading day
I. The Inspiring Journey
From Howard Schultz's Auto Biography @ https://www.howardschultz.com/my-story/#beginnings
1. The Beginnings
I was born in 1953, in Brooklyn, New York, to Fred and Elaine Schultz. Like so many Americans, our ancestors were immigrants. My paternal great grandfather, Max, arrived in the United States from Eastern Europe in 1892 with $10 in his pocket. He spoke no English and made his living as a tailor. My maternal great grandfather, Morris, came to America in the early 1890s. He was a barrel maker.
2. Life in Public Housing Projects
I was three years old when my family moved us into a small apartment in one of Brooklyn’s public housing projects in Canarsie, which really was the last stop on the “L” train from New York City. I grew up in those projects, the oldest of three kids, and with a best friend who lived next door. Neither of my parents finished high school, and after my father returned from World War II, he spent his life working low paid jobs as a laborer. He and I had a complicated relationship, and the best memory I have of my dad is sitting with him at Yankee Stadium, watching our hero Mickey Mantle play baseball.
3. The Tough Times
The most indelible image I have of my dad is of him lying on our couch in a cast, distraught. I was about seven years old. It was winter, and he had a job delivering cloth diapers. He’d fallen on a patch of ice and broken his hip and ankle. He was fired from his job and had no health insurance, no workers compensation, and no savings. The image of my father on the couch, helpless, stuck with me.
Pic : Howard's Father
Most people called my mother Bobbi. She was a fierce believer in the American Dream, and it was my mom who gave me the confidence to believe that I could one day build a better life for myself.
Pic : Howard's Mother
Our family rarely had enough money to pay the bills, and there was a lot of angst in our seventh-floor apartment. I escaped the family chaos by sitting in the stairwell between floors and imagining a better life. My other escape was sports. The playgrounds of the projects became a second home, and as a teenager I spent most of my free time playing basketball and football on its concrete courts.
In high school I played football, and I saw the sport as a potential path out of the projects. In 1971, I arrived at Northern Michigan University—a world away from Canarsie—with the hope of getting a football scholarship, but it never materialized. I stayed at NMU and paid my way through school with student loans and part-time jobs. I even sold my blood for cash when things got really tough.
In 1975, I became the first in my family to graduate college. Unfortunately, my parents could not afford to attend the graduation ceremony, but I knew my mother was proud.
5. First Job
My first job after college was selling office equipment door-to-door. Each day I made up to 50 cold calls. I liked talking to people and was pretty good at sales. I always gave half of my paycheck to my parents. My first job led to others until I worked for a European company that made housewares. One of our customers was a small coffee company in Seattle, Washington, named Starbucks.
In 1982, I went to visit the founders. Within a year, I was heading up marketing for Starbucks and had moved to Seattle with my wife, Sheri.
6. Onward to Seattle
Sheri and I had married in 1982. She was and remains the love of my life. We met on a beach, and I quickly fell in love with her intelligence, her wit, her beauty, and her generous spirit. She grew up in a small town in Ohio, and her father had built a successful industrial laundry business. Sheri planned to go to law school, but instead, she followed her passion and studied interior design. In the summer of 1982 we packed all our belongings in the car, and with our dog Jonas we headed west, to Seattle.
7. Trip to Italy
In 1983, I was on a business trip to Italy when I walked into an Italian café and tasted my very first espresso. I was captivated by the beverage, the barista who prepared it and the romance of the café atmosphere. At the time Starbucks stores only sold whole bean coffee and had no seating.
I had a vision of creating specialty coffee stores that integrated the romance of espresso and provided a place for community. The founders of Starbucks, however, weren't interested in my idea.
Il Giornale - The Coffee Shop
I left Starbucks to open my specialty coffee stores. But I had no money. For a year, Sheri and I lived off of her salary while I tried to raise funds. I heard “no” more than 200 times, but eventually, enough people believed in my vision that they invested in me, and in the business. It was an incredibly challenging and exciting time! By 1987 we had 3 espresso bars named Il Giornale.
1.Starbucks - Words from My Heart
I never set out to build a global business. I set out to build the kind of company that my father never had a chance to work for. One that treats all people with dignity.
The image of my father immobile on the couch, after his accident, stayed with me. So did the fear of not having healthcare. Not long after he passed away, in 1988, Starbucks became one of the first companies in America to give health insurance to all its employees—including part-time workers, a benefit that was unheard of at the time, especially in retail.
As a kid, I also knew what it felt like not to have money. My parents never owned anything, or had any savings. In 1991, Starbucks became the only company we knew about to give stock ownership to all employees. We called it Bean Stock. Since its inception in 1991—and after Starbucks went public in 1992—Bean Stock has generated more than $1.5 billion in pre-tax gains for the company’s baristas and managers, helping some put down payments on homes, finance cars, pay off loans, even pay for weddings.
We did those two things in the late eighties and early nineties, and never stopped trying to be a different kind of company.
One of my favorite benefits has been the Starbucks College Achievement Plan. In 2014, Starbucks and Arizona State University created the first-of-its kind program to give employees a tuition-free college education. By spring of 2019, more than 3,000 Starbucks partners (employees) will have graduated. Twenty percent of those who have participated in the program are like me, the first in their families to go to college.
2.More About My Family
As Starbucks grew, Sheri and I grew our family. Our son, Jordan, was born in 1986, and our daughter, Addison, in 1989. Today, Jordan is a sports journalist and Addison is a social worker.
I am most proud that they have grown into kind, generous, hard working adults. Each married someone who shares their values—and, luckily, a love of dogs. Our close-knit family continues to grow.
Sheri is not only a wonderful wife, mother and grandmother, but for years she has been the heart and force behind the Schultz Family Foundation, which focuses on helping young people, veterans, military families, and others to access opportunities like education and employment.
The two of us have lived the American Dream, and we see it as our responsibility to help others do the same for themselves and their families.
3. Howard Schultz - The CEO
Looking back: We transformed the business to sustainable growth and profit, while maintaining our core values. Growing a business takes teamwork, and there were always tough decisions and difficult periods. In 2000, I stepped down as CEO and became chairman, but I returned in 2008, when the company was having troubles. In 2018, Starbucks ranked fifth on Fortune’s list of the World’s Most Admired Companies 2018 & 2019.
In 2018, I officially left Starbucks and became chairman emeritus, but the three million people who have worked for Starbucks over the decades are never far from my mind.
Together, we built a public company that achieved the fragile balance between profit and responsibility that my parents would be proud of.
III. The Starbucks Story
Starbucks Corporation (NASDAQ: SBUX) is now a household name, synonymous with the word 'coffee'. Thirty years ago, however, this was not the case. Starbucks went public in 1992 with its initial public offering (IPO) at $17 per share. As of May 14, 2020, that initial IPO price, adjusted for stock splits and dividend income, is $0.28 per share! Since its IPO, Starbucks stock has split 2:1 a total of six times. The company began paying a dividend in 2010 and has increased it annually since 2011.
Early investors have certainly been rewarded handsomely for sticking with Starbucks. If you had invested $10,000 on June 26,1992, the day Starbucks went public at $17 per share, your investment would be worth around $2.6 million as of May 14, 2020. This represents a compound annual growth rate (CAGR) of 22.0%.
You could not buy a cup of coffee at the first Starbucks store that opened in 1971. Starbucks originally only sold coffee beans and equipment. CEO Howard Schultz began working for Starbucks in 1982 and came to the realization it should be selling freshly brewed coffee instead of just machines and beans. The owners of Starbucks at the time tried the idea in downtown Seattle serving the very first Starbucks caffè latte.
Due to a different vision for success Schultz left the company in 1985 and began his own chain, Il Giornale. In 1987, Schultz returned to purchase Starbucks with the help of investors. His goal was to bring the Italian coffee shop back to America. Schultz envisioned a place for conversation and a sense of community.
1. Growth of the Brand
In 1987, when Schultz merged the Il Giornale and Starbucks locations, the company owned 17 stores. When it went public in 1992, Starbucks had 165 total locations. In 1996, with 1,015 total stores, Starbucks opened its first international location in Japan. As of 2015, Starbucks operates over 22,500 stores, under several brands, around the globe. Store growth on an annualized basis since its IPO has been close to 24%.
Starbucks has transformed its offerings since the first caffè latte. In 1996, the company began bottling and selling its Frappuccino. It has acquired brands such as Seattle’s Best Coffee, Teavana, La Boulange, Evolution Fresh and Tazo Tea. Starbucks customers can choose from bakery items, sandwiches, teas, juices, coffees and coffee accessories in the store. Through grocers, consumers not willing to pay the cafe price can purchase products, such as ground coffee, to enjoy at home. Within a short period of time, Starbucks has entered and captured a significant share of the at-home coffee market.
2. The Future
Starbucks continues to open thousands of new stores each year, mainly outside of the North American market. The company has a five-year plan with several goals to continue driving growth. Starbucks wants to be the employer of choice and invest in those employees who continue to deliver superior customer service. Starbucks has always been on the forefront of valuing employees, especially its part-time staff.
The company has stated it will grow to 30,000 locations globally and work on creating new reasons for customers to visit its stores throughout the day. From breakfast to lunch, and also snack and evening offerings, the goal is to entice customers to come back a second time in one day or make additional trips per week. Starbucks wants to become a major player in the global tea market. Following the acquisition of Teavana, the company will incorporate this brand into its stores and grocery supply chain.
3. Innovation at the Startbucks
The expansion of digital engagement allows Starbucks to drive participation in programs such as mobile ordering and My Starbucks Rewards. The company has begun testing delivery using the mobile app platform and is partnering with the delivery startup Postmates. With the mobile app, customers can order ahead, save their favorite drink, add funds to a Starbucks card, send gift cards and track their rewards. It is now easier than ever to get your hands on Starbucks' products.
4. Retirement and Presidential Speculation
In early June 2018, Howard Schultz announced that he would be stepping down as chairman of Starbucks at the end of the month. At the time, the chain had grown to include more than 28,000 stores in 77 countries.
The move added fuel to the rumor that the successful businessman was considering a run for president in 2020, and Schultz did little to diffuse the speculation. "For some time now, I have been deeply concerned about our country — the growing division at home and our standing in the world," he told The New York Times, though he added that he was "a long way from making any decisions about the future."
In January 2019, Schultz revealed that he was preparing to run for President as an independent, though he said he would first tour the country to promote his new book, From the Ground Up: A Journey to Reimagine the Promise of America, before deciding whether to formally enter the race.
Along with weathering criticism for potentially drawing votes away from the eventual Democratic nominee, Schultz suffered a setback when back pain prompted a series of operations and forced him off the campaign trail. In September 2019, the businessman announced that he was abandoning his bid for the presidency.
"My belief in the need to reform our two-party system has not wavered, but I have concluded that an independent campaign for the White House is not how I can best serve our country at this time," Schultz wrote in a letter posted to his website.
5. Glance at Starbucks today ...Forbes , As of May 13, 2021
Industry - Hotels, Restaurants & Leisure Founded - 1971
Country/Territory - United States President and CEO - Kevin Johnson
Employees- 349,000 Sales- $23.2B
Headquarters -Seattle, Washington
Today, no one company sells more coffee drinks to more people in more places than Starbucks. Starbucks, accounted for 32,646 stores worldwide in 2020 – a figure that has almost doubled in the last decade.
As of June 2021 Starbucks has a market cap of $131.78 B. This makes Starbucks the world's 113th most valuable company by market cap.
Howard Schultz 's Story is Stunning and Inspirational One and Its a Epitome of Realisation of American Dream...!!
If anyone Writes Corporate History of World after 200 Years, Howard Schultz will remain as a Shining Star in the Milky Way of Businessmen & Entrepreneurs and remembered as One of the Finest Gentlemen ever graced the Corporate World in General and American Business in Particular...!!