Monday, Apr. 26, 2004

Howard Schultz

Remember when a cup of coffee was a commodity, a 50 cent mug of joe that came in three flavors: black, with sugar and with cream? That was before 1984, when Howard Schultz opened his first Seattle coffeehouse—later named Starbucks—and taught caffeine-hungry consumers from Birmingham to Bangkok that what they really wanted was a $4 venti extra-hot double-shot latte, easy on the foam. With 7,500 shops in 34 countries—plus supermarket sales—ringing up revenue north of $4 billion a year, Starbucks has become a global iconic consumer brand, as well as providing thousands of places where people hang out, read, listen to music, take off their shoes and hop online.

Schultz didn't invent good coffee, of course, much less café culture. But he did mass-produce and Americanize both, which, as the familiar story goes, led to their globalization. The company helped stem a long decline in U.S. coffee consumption and taught the food industry the attractions of affordable luxuries. "It's like Marshall Field's in the 19th century," says Harvard Business School professor Nancy Koehn. "When someone does something big, ripples follow." Starbucks continues to expand, having entered coffee-conscious France earlier this year. Schultz, who drinks black drip, says the company plans to have at least 10,000 North American stores and 15,000 overseas. How big is that? Venti.

From the Archive
Starbucks Unwired: The coffee chain has been serving up wireless Web access at its stores for more than a year now. So why aren't more people using it?