80 billion star father's story
Modern white-collar workers need a cup of coffee at work. This year’s epidemic, the express delivery has only slowly recovered, and my family’s ration coffee beans have been drunk. I can't help but remind me of the good time in the cafe before the epidemic. Today we will talk about the story of Starbucks.
Starbucks has nearly 30,000 coffee shops around the world, accounting for 57% of total coffee sales. In the United States, nearly two-thirds of coffee shop sales come from Starbucks. With so many Starbucks stores, the sales of each store may also affect each other. After all, there are 2 to 3 Starbucks in any district in tier 1 or 2 cities. How can Starbucks solve this problem?
In 1970, three young people decided to enter the coffee industry. They were Zev Siegl, Jerry Baldwin and Gordon Bowker. They found a mentor, Peet was the one who brought roasted coffee to the United States at the time, and he was very familiar with the coffee industry. With the help of Peet, they successfully opened a coffee bean roasting shop in Seattle Pike Place Market. We often see the Parker packaging of a certain treasure from this.
Turning point
In the first 10 years, young people opened 5 branches. At that time, in the 1970s, people didn't drink coffee outside but only at home. Starbucks initially focused on selling high-quality coffee beans. Until one person appeared, he was the first marketing director and sales director of Starbucks, and he was Howard Schultz.
In 1983, Schultz traveled to Italy and returned with an idea: to transform a coffee bean shop into a coffee shop. In the second year, Starbucks began selling lattes. This transition was a success. Four years later, Schultz and investors bought Starbucks for $3.8 million. Schultz was 34 years old at the time.
expansion
Schultz pursues an aggressive expansion strategy. By the time Starbucks went public in 1992, it already had 165 stores. By 1996, more than 1,000 branches had been opened, including the first international cafes in Japan and Singapore. The growth was so fast that only three years later, Starbucks opened its 2,000th branch.
Schultz changed from CEO to executive chairman in 2000, when Starbucks operated 3,500 branches in more than a dozen countries. From 2000 to 2007, the number of Starbucks coffee shops more than tripled, from 3,500 to more than 15,000. During this period, Starbucks opened an average of 1,500 stores each year, and in 2007 alone opened 2,500 stores. Sales soared from US$2 billion to US$9.4 billion.
Take the helm
In 2007, the financial crisis and economic depression caused many people to stop drinking coffee. Starbucks hit a wall, and its stock price plummeted 50%. So there is no way, Schultz can only play again. The news that Schultz took the helm caused the stock price to rise 9%. He closed more than 300 branches and laid off 6,700 baristas in 2009. One month after his return, he closed all branches in the United States for one afternoon so that he could retrain more than 135,000 baristas how to make their specialty coffee. Schultz’s goal is to remind customers of their love of the brand and increase brand value by making Starbucks an experience, not just a place to drink coffee. Starbucks stopped selling breakfast sandwiches and renewed the aroma of fresh coffee. Schultz even asked for the automatic coffee machine to be removed. The automatic coffee machine makes the service faster, but eliminates the romantic atmosphere and drama of watching the barista make each cup of coffee. Schultz's transformation was successful. Starbucks stock soared by more than 143% in 2009, and sales rebounded. During Schultz's change of strategy, Starbucks hardly opened any new branches. However, after 2012, I was involved in opening new branches again, and it was very fast. By 2017, Starbucks had opened nearly 3,000 outlets and had 28,000 coffee shops around the world by the end of the year.
Problems and solutions
Back to the front, with so many branches, how to increase profits? At the same time, consumer tastes are constantly changing, how to cater to it? My favorite Frappuccino contains an average of 57 grams of sugar, which is twice the daily intake. Modern people advocate low sugar. In order to solve these problems, Starbucks has begun to adjust its strategy again. In 2019, it closed 150 stores. In addition, Starbucks also introduced light drinks such as cold drinks and fruity refreshing drinks. Starbucks launched the latest high-end store: Starbucks Premium Baking Workshop. The huge 20,000 square foot baking workshop is designed as a tourist attraction. Here, Starbucks baristas and bartenders experimented with different brewing methods and produced novel and innovative coffee beverages. These new drinks are very popular. In the first few weeks, the average daily sales of Shanghai Bakery was US$64,000, which was twice the weekly sales of ordinary coffee shops. In the roasting workshop, you can see the process of making green coffee beans all the way to brewing into coffee.
Starbucks has taken the experience to the extreme. At the time of writing, I seem to have smelled the aroma of coffee beans again.