Starbucks

Starbucks was founded on March 30, 1971 by three friends who shared an academic background and a love of fine coffee: Jerry Baldwin (English literature), Gordon Bowker (writer and journalist), and Zev Siegl (teacher). They opened their first store near Seattle's Pike Place Market, naming it after the first mate in Herman Melville's Moby Dick — a name they felt evoked the romance of the sea and early coffee traders. For the first decade, Starbucks sold only whole coffee beans — not beverages. They sourced Peet's Coffee initially, then roasted their own. They had no idea what the business would become.

Howard Schultz was working as head of marketing for Hammarplast, a Swedish housewares company, when he noticed Starbucks was ordering a disproportionate number of drip coffee makers. He visited the Pike Place store in 1982, was captivated, and convinced the founders to hire him as marketing director. In 1983, Schultz travelled to Milan and was transformed: Italian espresso bars — the social gathering places where baristas knew customers by name, where coffee was ceremony rather than commodity — showed him what Starbucks could be. He proposed the concept to the founders. They rejected it; they wanted to sell beans, not drinks.

Schultz left to found his own espresso bar concept, Il Giornale, in 1985. When the original Starbucks founders decided to sell the company in 1987, Schultz raised the money to buy it. Bill Gates Sr. helped secure the deal when one investor wavered. Schultz paid $3.8 million for Starbucks — 11 stores — and merged it with his Il Giornale locations. He then built the Italian coffeehouse vision in America: not just coffee, but an experience; not just a transaction, but a "third place" between home and work. By 1992, Starbucks had gone public. By 1997, revenue had grown from $55 million to $1.3 billion.

Starbucks opened so many locations in the 2000s that stores began cannibalising each other. The company lost what Schultz called its "soul" — its stores smelled like eggs rather than coffee; automation had removed the theatre of handcrafted espresso; growth metrics had overridden experience. In 2008, during the financial crisis, Schultz returned as CEO — having stepped back in 2000 — and oversaw the closure of 900 underperforming stores, comprehensive retraining, and a return to the craft coffee identity. The turnaround worked. Schultz returned again in 2022 as interim CEO after his successor Kevin Johnson stepped down.

Starbucks reported $36.2 billion in total revenue for fiscal year 2024 (ending September 2024), operating approximately 40,199 stores globally. The year was characterised by declining comparable store sales — down 2% globally — as mobile order complexity, long wait times, and a difficult environment in China eroded traffic. In August 2024, Starbucks ousted CEO Laxman Narasimhan and appointed Brian Niccol — who had transformed Chipotle — as chairman and CEO. Niccol's "Back to Starbucks" strategy aimed to restore the coffeehouse experience: ceramic mugs for in-store customers, markers to write names on cups, reduced menu complexity, and a return to the culture of the Pike Place original. By Q4 FY2025, comparable store sales had turned positive at +3%.