Starbucks spent its first decade refusing to sell a cup of coffee
When Starbucks opened near Seattle's Pike Place Market in 1971, it sold beans and brewing gear, nothing you could drink. Its founders wanted to stay that way. It took a marketing director who had fallen for Milan's espresso bars, and who eventually bought the company outright, to turn it into the world's largest coffeehouse chain.
Jerry Baldwin, Zev Siegl and Gordon Bowker had met as students in San Francisco and took their inspiration from the roaster Alfred Peet, who supplied their green beans for the first two years and then trained their new roastmaster. The name reportedly came from a partner's belief that words starting with st sounded strong. Brewed coffee only arrived in 1982, the year Howard Schultz joined and began pushing for drinks, and an espresso bar followed in 1984.
The founders still preferred selling arabica beans, so Schultz left in 1985 to start Il Giornale, modelled on Italian cafés, with Starbucks as his first investor. Two years later the owners sold him the whole chain. He rebranded his cafés as Starbucks and expanded fast: 46 stores by 1989, and 140 when the company went public in 1992, with revenue that had jumped from US$1.3 million to US$73.5 million in five years. Buying The Coffee Connection in 1994 brought the rights to the Frappuccino, which later topped US$2 billion in annual sales.
Growth was not a straight line. During the Great Recession the chain shut hundreds of underperforming shops, and between February 2008 and January 2009 it cut an estimated 18,400 American jobs while starting to close 977 stores worldwide. Australia proved a stubborn market; most outlets there closed in 2008 and the rest were sold in 2014.
Technology became a recurring bet. By July 2013 more than a tenth of in-store purchases came through the mobile app, and in 2019 the company announced a blockchain project to trace beans from farm to cup. By November 2022 there were 35,711 stores in 80 countries, and Starbucks is often credited with popularising the second wave of coffee culture.
Source: Starbucks
