To understand the giant organisation that Starbucks has become, and its continuing plans for global expansion, it’s worth taking a look at the information presented at the company’s Annual Meeting of Shareholders on 19 March.
Howard Schultz, chairman, president and ceo of Starbucks Coffee Company opened the company’s by showcasing how Starbucks 200,000 partners (employees) are leveraging the company’s unique combination of physical and digital assets to deliver long-term global growth.
Still in the early stages of growth!
“We’re still in the early stages of the growth and development of Starbucks, we’re delivering record profits and revenue, sharing our success with our partners and heading towards and past a $100 billion market cap,” said Schultz. “No other brick-and-mortar retailer matches our size and growth profile nor the relevancy and strength of the Starbucks brand. Together we’re building one of the world’s most trusted, admired and enduring brands, and redefining the role of a public company while we do it. There has never been a more exciting time to be a Starbucks partner and shareholder.”
Significant achievements
Schultz highlighted the company’s significant achievements over the six years since Starbucks returned from the height of the financial crisis in November 2008 following the implementation of the company’s 2008 Transformation Agenda and 2011 Blueprint for Profitable Growth, including:
- Stock price growth of 948 percent;
- Market cap expansion from $5 billion to $57 billion;
- A more than ten-fold increase in total shareholder return;
- Serving more than 70 million customers per week in more than 20,000 stores in 64 countries.
Schultz and Starbucks chief operating officer Troy Alstead also highlighted the company’s significant accomplishments since last year’s meeting, including:
- Record revenues of $14.9 billion (12 percent growth) and record earnings per share of $2.26[1] (26 percent growth) in fiscal 2013;
- $2.5 billion[2] in net operating income (23 percent growth) in fiscal 2013;
- 55 percent total shareholder return in fiscal 2013, following a 38 percent return in fiscal 2012 and a 46 percent return in fiscal 2011;
- Four years of seven percent or greater global comp growth;
- $1.2 billion in cash returned to shareholders in the form of dividends and share repurchases.
With $15 billion in revenue and an average sale of $5, Schultz emphasized the importance of the unique relationship Starbucks partners have built with customers around the world, and attributed the company’s success to partners’ contributions.
Record Starbucks Card and Loyalty Growth, New Mobile App
Starbucks chief digital officer Adam Brotman announced the release of an updated Starbucks mobile app for iPhone®, which will extend the company’s leadership in mobile payment and allow customers to recognize Starbucks partners with a tip directly from the Starbucks app for iPhone® starting now in the U.S.
Mobile payment now represents 14 percent of all in-store transactions in the U.S. More than 25 percent of all transactions are made by My Starbucks RewardsTM loyalty members.
Brotman also emphasized record Starbucks Card growth with an estimated 1 in 8 American adults receiving a Starbucks Card this past holiday season, which translated to 1.5 million new customers registering their Starbucks Card and joining the My Starbucks RewardsTM loyalty program for the first time. Starbucks now has more than 8 million My Starbucks RewardsTM members in the North America alone.
Globally, Starbucks Cards are available in more than 28 countries, and more than $18 billion has been loaded onto Starbucks Cards since the start of the program in 2001.
Brand continues to resonate around the Globe
Avani Davda, ceo, Tata Starbucks Limited for India, and Belinda Wong, president, Starbucks China, shared how their respective markets continue to represent significant long-term growth potential for the company.
Wong shared that China today has more than 1,100 stores, across 68 cities and nearly 20,000 partners. Continuing on pace to reach 1,500 stores in 2015, the team is focused on elevating the Starbucks Experience through unique, market-level innovation, while building the brand holistically.
Davda highlighted that India today has 40 stores in 4 cities, with nearly 1,000 partners. The fastest growing market in Starbucks history, the team is focused on delivering a Starbucks Experience that resonates with India customers and engages partners.
Hacienda Alsacia and the Evolution of Starbucks Reserve® Coffees
Last year, Starbucks announced the acquisition of Hacienda Alsacia, a 240-hectare coffee farm in Costa Rica that is now acting as a global agronomy and research centre. The work on this farm is expanding the company’s comprehensive approach to ethical sourcing as part of its commitment and investment in supporting long-term, sustainable approaches to farming that will benefit the broader specialty coffee industry.
The Starbucks Reserve® program makes some of Starbucks® rarest small batch coffee available to customers by the half-pound or cup with the company’s patented Clover® brewing system. In the coming year, Schultz announced the company will further evolve the Starbucks Reserve® program with new packaging and offerings, bringing the purest expression of an exquisite cup of coffee to customers around the world.
Doing for Tea what Starbucks did for Coffee
Schultz called the $90 billion global tea category “ripe for innovation” and showcased the company’s ambition to do with tea what it has done with coffee. One year following Starbucks largest acquisition to date, Schultz highlighted how the company is growing, expanding, and reinventing the Teavana brand and customer experience. Since the acquisition, Starbucks has opened nearly 40 new mall-based stores and announced plans to open more than 20 additional stores through the rest of fiscal 2014.
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