Also Announces Acquisition of The Coffee Equipment Company and its
State of the Art Clover(R) Brewing System
SEATTLE--(BUSINESS WIRE)--March 19, 2008--With more than 6,000
shareholders in attendance, Starbucks Coffee Company (NASDAQ: SBUX)
today unveiled a series of innovative customer-facing initiatives at
its Annual Meeting of Shareholders. Howard Schultz, chairman,
president and ceo, shared his vision for transforming the Starbucks
customer experience and reinforcing a strong foundation from which to
grow. The announcements marked the next stage of Starbucks
transformation following nearly three months of passionate work that
began with Schultz's return as ceo on January 7.
Beyond the five initiatives the company said it would deliver,
Schultz also announced that Starbucks had signed an agreement to
acquire The Coffee Equipment Company and its Clover(R) brewing system.
"Eleven weeks ago, I made a personal commitment to every one of
our customers and partners (employees) to reaffirm our place as the
world's coffee authority," said Schultz. "By embracing our heritage,
returning to our core -- all things coffee -- and our relentless
commitment to innovation, we will reignite the emotional connection we
have with our customers and transform the Starbucks Experience. I am
confident that the ground-breaking initiatives we've announced today
demonstrate our laser focus on living up to that commitment. We know
that this is just the beginning, but we also know that there has never
been a more exhilarating or promising time in our history."
At the Annual Meeting, Starbucks unveiled the following new
initiatives. They are focused on improving the current state of the
U.S. business, re-igniting the emotional attachment with customers and
making foundational changes for the long term:
- A proprietary and revolutionary in-store Clover(R) brewing
system that delivers the best cup of brewed coffee available
anywhere;
- A complete reinvention of brewed coffee in-store, that will be
brought to life by baristas across the U.S., who will scoop
and grind a new unique coffee blend, connecting customers to
the early days of Starbucks;
- The introduction of a new state-of-the-art espresso system
that provides the perfect shot every time and helps facilitate
the critical connection between barista and customer;
- The first phase of a Starbucks Card Rewards program, rewarding
registered cardholders and providing unique new benefits when
using their cards in Starbucks stores;
- The launch of MyStarbucksIdea.com, Starbucks first online
community, that takes the Starbucks Experience outside the
store and enables customers to play a role in shaping the
company's future; and,
- An expanded relationship with Conservation International that
enhances Starbucks 37-year commitment to ethically sourcing
the world's finest coffees and reaffirms Starbucks leadership
position in sustainable sourcing and climate preservation.
"There have been times in our history where others questioned
whether we had reached our limit -- yet time and time again, we have
responded by reaching even greater heights," Schultz said. "Today, we
again demonstrated our commitment to surpassing the expectations of
every one of our customers, shareholders and partners. We hope we've
given everyone a reason to believe -- not only in the endurance of the
Starbucks legacy, but also in our ability to continually raise the bar
for what it means to be the world's leading roaster and retailer of
specialty coffee."
BACKGROUND ON THE NEW INITIATIVES
The Next Coffee Revolution - Clover(R) Brewing System
Starbucks has entered into an agreement to acquire The Coffee
Equipment Company, whereby Starbucks will become the exclusive
provider of the revolutionary Clover(R) brewing system. With its
proprietary brewing process, the Clover(R) machine has quickly become
regarded as the gold standard in innovation in brewing equipment.
Clover's unique brewing process is similar to the coffee press
method, but utilizes a special vacuum technology that brings out the
complex, rich and distinctive flavors of some of Starbucks rarest and
most exotic coffees -- such as Aged Sumatra and Ethiopia Yergacheffe.
The Clover(R) brewing system also adds to the theater and drama of the
coffee experience through its highly visual brewing method.
Some Starbucks stores in Seattle and Boston are currently using
Clover(R) brewing systems and the Company plans to further accelerate
the rollout of the machines in select U.S. and international markets.
Financial terms of the transaction were not disclosed.
"This acquisition will provide us with an opportunity to give
customers individually brewed cups of some of Starbucks most exotic
coffees," said Schultz. "In my over 25 years with Starbucks, the
Clover machine unequivocally delivers the best cup of brewed coffee I
have ever tasted."
The Reinvention of Brewed Coffee: Introducing Pike Place Roast
Starbucks challenged its coffee and roasting teams to create the
world's most exceptional coffee blends. The result of those efforts is
the new Pike Place Roast. Beginning in mid-April, this unique new
coffee will be brewed in every U.S. company-operated store every day,
giving customers a unique, consistent and fresh brewed coffee
experience.
Pike Place Roast exemplifies Starbucks 37-year heritage and
expertise in buying, blending and roasting the world's finest coffees.
Starbucks roasts Pike Place Roast to be smooth and bold, bringing to
life the cocoa and toasted nut flavors in the coffee.
Also next month, all Starbucks company-operated stores in the U.S.
will further elevate the customer experience when they begin to scoop
and grind the beans they use for brewed coffee. To enable customers to
enjoy the freshest, high-quality cup of brewed coffee, stores also
will brew smaller batches with a hold time of no more than 30 minutes.
Licensed stores in the U.S., as well as Starbucks locations outside
the U.S., also will move to a 30-minute hold time over the coming
months.
"We are returning to the very best elements of our heritage and
bringing back the simple romance and excitement of coffee," said
Schultz. "Since 1971, we have sourced, roasted and sold the world's
finest coffees. By highlighting that history through Pike Place Roast,
and bringing back the sounds and aromas of the coffeehouse, we are
raising the bar on what it means to serve the perfect cup of coffee."
Introduction of the Next Generation Espresso Machine: Mastrena(TM)
Over the last several months, Starbucks stores around the world
have taken great strides to ensure that every customer receives a
drink that exceeds their expectations, every time. From an
unprecedented education and training initiative focused on espresso
excellence, to the upgrading of Starbucks Verisimo(R) espresso
machines in U.S. and Canada stores to ensure the highest-quality
espresso with each shot, every partner at Starbucks has demonstrated a
relentless commitment to quality.
As part of those continuing efforts, Starbucks today unveiled the
Mastrena(TM), the next generation of world-class espresso machines
exclusive to Starbucks stores. The Mastrena(TM) represents more than
five years of development and collaboration between Starbucks and
Thermoplan AG, one of the world's leading espresso machine
manufacturers.
The Mastrena(TM) is the gold standard among espresso machines. It
grinds every shot to order and its other many exceptional features
result in superior consistency of espresso shots, greater options for
milk steaming and customization, and a lower profile to enable
baristas to connect visually with customers for personal, immediate
interaction and service.
As part of its investment in delivering a world-class in-store
experience, Starbucks is planning an aggressive rollout of the
Mastrena(TM). By the end of the year, more than 30 percent of U.S.
company-operated stores will have the new machine and 75 percent will
have the Mastrena(TM) by the end of 2010. Additionally, new
international stores will receive the Mastrena(TM) starting in the
summer of 2008, and all international stores will complete the
Verisimo(R) upgrade by the end of this calendar year.
"With the Mastrena(TM) and the upgraded Verisimo, there is no
doubt that our customers will enjoy the finest shots of espresso in
the world," continued Schultz. "We have brought the art of espresso to
the world, and by providing our baristas with the best training and
tools, we will continue to define the industry standard."
Adding Rewards to the Starbucks Card
Since its introduction in 2001, the Starbucks Card has
revolutionized the way customers pay for their daily coffee
experience. With more than 193 million cards issued in the U.S. and
Canada since its introduction, there are approximately five million
active Starbucks Card holders at any given time. This spring, every
registered card holder will enjoy an elevated experience every time
they use their cards.
In April, Starbucks will begin providing registered Starbucks Card
holders these immediate, value-added benefits when they use their card
at participating Starbucks stores in the United States and Canada:
- Complimentary customization on select syrups (including
flavors such as vanilla, hazelnut and cinnamon) and milk
alternatives (such as soy or half and half). For instance, a
Tall Vanilla Soy Latte would be the same price as a regular
Tall Cafe Latte because the soy and the vanilla are free.
- Complimentary Tall beverage of choice (including
Frappuccino(R) blended beverages) with the purchase of one
pound of whole bean coffee (on the same visit).
- Free refills on brewed coffee (on the same visit).
- Two hours daily of free, in-store Wi-Fi, starting this spring
in company-operated stores in the U.S. (per registered
cardholder).
- The opportunity to join Starbucks in supporting charitable
causes.
"Already, one in seven customers uses the Starbucks Card, and now
we are taking the first steps toward recognizing these customers by
providing them value beyond any other coffeehouse," said Schultz. "It
is the personal relationship our customers have with our brand, our
stores and our baristas that is the foundation of our success. Through
this initiative, we are making it even easier to make the Starbucks
Experience your own."
Creating an Online Starbucks Community Network at
MyStarbucksIdea.com
The Starbucks Experience grows, in part, from the unique
combination of a shared passion for coffee and the exchange of great
ideas. For years, Starbucks stores have served as the center of
vibrant communities, welcoming customers and encouraging creativity
and dialogue. Starbucks today announced the extension of that
community beyond the doors of its stores with the launch of
MyStarbucksIdea.com.
Found at www.mystarbucksidea.com, the site is Starbucks first
online community and enables customers to share their ideas, engage in
conversations and play a role in shaping Starbucks future. This new
community seeks to strengthen Starbucks connection with customers by:
- Establishing a meaningful dialogue between and among community
members and Starbucks, extending the coffeehouse experience
outside store walls;
- Creating a new space for customers to share ideas and be part
of shaping Starbucks in the future; and,
- Building an open forum to share the Starbucks story in a way
that fosters authenticity, transparency and leadership in
conversations about Starbucks.
The new website launches today and features an area -- Ideas Into
Action -- where customers can track the progress of ideas that
Starbucks is working to bring to life. Starbucks is also launching a
site for Starbucks partners to share their ideas and engage in
conversations.
"We engage in millions of conversations with our customers
everyday, and those conversations and ideas have helped shape the
company we are today," said Schultz. "With the launch of
MyStarbucksIdea, we are extending the Starbucks community online and
creating a dynamic forum that enables us to capture and act upon our
customers' best ideas."
Taking Ethical Sourcing to New Levels
Today, Starbucks also expanded its 37-year commitment to ethically
sourced coffee with a renewed relationship with Conservation
International (CI).
Starbucks and CI began working together more than a decade ago to
further integrate environmental conservation principles into Starbucks
coffee-buying practices to ensure the sustainable production of
high-quality coffee. These efforts became the foundation for C.A.F.E.
(Coffee and Farmer Equity) Practices, a comprehensive program that
addresses the environmental, social and economic transparency issues
that are so critical to the long term health of the farmers and
suppliers with whom they work.
Starbucks today unveiled a renewed five-year global commitment
with CI to tackle climate change, by working together to support
farmers who are preserving forests in coffee regions. The project will
begin with two launch sites in Sumatra, Indonesia, and Chiapas,
Mexico.
To directly link customers to this effort, the company also
unveiled a new mark for its coffee. This mark symbolizes Starbucks
partnership with CI and its commitment to coffee that is responsibly
grown, ethically sourced and proudly served. Starbucks will work with
its suppliers and CI to meet the following goals to rollout the mark:
- By mid-April 2008, our new brewed coffee offering, Pike Place
Roast, served daily at U.S. company-operated stores will
qualify for the new mark.
- By mid-April 2008, all whole bean espresso and espresso-based
drinks in Europe, Middle East and Africa stores will qualify
for the new mark.
- By March 2009, all whole bean espresso and espresso-based
drinks in all U.S. stores will qualify for the new mark.
- By the end of 2009, we intend to have all espresso-based
drinks qualify for this mark.
- The ultimate goal is for all Starbucks(R) coffee to qualify
for this mark.
"This is a pioneering agreement built on the foundation of our
10-year relationship," stated Schultz. "It will allow us to have a
positive impact on one of the global community's most pressing
issues."
"We are excited to grow this relationship, and prouder still to
demonstrate our commitment by having Pike Place Roast be the first
coffee to carry the new mark that symbolizes our renewed commitment,"
added Schultz.
For more information, please visit www.conservation.org.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting the highest quality arabica coffee in
the world. Today, with nearly 16,000 stores and more than 170,000
partners (employees) in 44 countries, Starbucks is the leading roaster
and retailer of specialty coffee in the world. Through our unwavering
commitment to excellence and our guiding principles, we bring the
unique Starbucks Experience to life for every customer through every
cup. To share in the experience, please visit us in our stores or
online at www.starbucks.com.
Forward-Looking Statements
This release includes forward-looking statements about certain
company initiatives and plans. These forward-looking statements are
based on currently available operating, financial and competitive
information and are subject to various risks and uncertainties. Actual
future results and trends may differ materially depending on a variety
of factors including, but not limited to, coffee, dairy and other raw
material prices and availability, successful execution of internal
plans and initiatives, fluctuations in U.S. and international
economies and currencies, the impact of competition, the effect of
legal proceedings, and other risks detailed in the company's filings
with the Securities and Exchange Commission, including the "Risk
Factors" section in Starbucks Annual Report on Form 10-K for the
fiscal year ended September 30, 2007 and Starbucks Quarterly Report on
Form 10-Q for the quarter ended December 30, 2007. The company assumes
no obligation to update any of these forward-looking statements.
CONTACT: Starbucks Coffee Company
Valerie O'Neil, 206-318-7100 (Media)
press@starbucks.com
or
Starbucks Coffee Company
JoAnn DeGrande, 206-318-7118 (Investors)
investorrelations@starbucks.com
http://www.businesswire.com/cnn/sbux.shtml
SOURCE: Starbucks Coffee Company
