Innovation, operating leverage and global brand relevancy drive
growth across retail and CPG channels
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Opening 3,000+ net new stores in Americas region by 2017
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Channel Development (CPG) to double its international footprint by
2015
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China on track to become second-largest market in 2014
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Starbucks VIA® Ready Brew, K-Cup® packs and now the Verismo System
combine to create the strongest and most complete line-up of premium
single-serve options in the global coffee industry
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Social and digital media, loyalty and mobile payment platforms
transforming customer experience and deepening connection to customers
around the world
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Reiterated commitment to leadership position in $40 billion global
tea market and reaffirmed intent to acquire Teavana this year
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Reiterated commitment to profitability in Western Europe
NEW YORK--(BUSINESS WIRE)--Dec. 5, 2012--
Starbucks (NASDAQ:SBUX) today reaffirmed its leadership position and
growth agenda across its global retail, emerging brands and CPG channels
at its biennial Investor Conference.
“Starbucks business and brand have never been healthier, and as a
company we have never been better positioned to execute against our
global, multi-channel growth agenda,” Starbucks chairman, president and
chief executive officer Howard Schultz said at the company’s 2012
Investor Conference. “Starbucks will have more than 20,000 retail stores
on six continents by 2014 and more than 200,000 points of global CPG
distribution by 2015. I am personally committed to seeing Starbucks
deliver the innovation, execution and elevated customer experience
necessary to achieve both these goals and remain one of the world’s most
trusted and admired consumer brands.”
U.S. and China Powering Global Retail Store Expansion
Starbucks regional presidents joined Schultz in outlining the tremendous
opportunity that lies ahead as the Company pursues disciplined,
profitable growth across its global retail platform.
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Cliff Burrows, president, Starbucks Americas and U.S., announced that
his region planned to add more than 3,000 net new stores, and renovate
thousands more stores, over the next five years. At least half of the
new stores are expected to be in the strong, rapidly growing U.S.
market where revenue grew by 9 percent in fiscal 2012. Burrows also
announced plans to leverage the recently completed Evolution Fresh and
La Boulange acquisitions – and to increase sales and drive customer
frequency throughout the day – by making La Boulange® products
available in more than 2,500 U.S. company-operated Starbucks stores
and making Evolution Fresh™ juices available in more than 5,000 U.S.
company-operated stores by the end of 2013.
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John Culver, president, Starbucks China and Asia-Pacific, said his
region – the company’s fastest growing retail store market – will
approach 4,000 stores by the end of 2013, including 1,000 in Mainland
China, 1,000 in Japan, 500 in Korea and its first store in Vietnam.
Culver highlighted China as Starbucks most successful new market entry
to date, and announced that China is expected to become Starbucks
largest market outside of the U.S. in 2014 and is on plan to have
1,500 stores in 70 cities in 2015. At the conference, Culver noted the
positive results achieved so far this quarter. Culver also provided an
overview of the hugely successful opening of the company’s first three
stores in Mumbai, India – opened since October – and reaffirmed plans
to open the company’s first store in Delhi in early 2013.
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Michelle Gass, president, Starbucks Europe, Middle East and Africa,
said Starbucks is focused on building brand relevancy, unlocking
opportunities in its company-operated stores and accelerating
licensing agreements in her region. Gass reaffirmed the company’s
confidence that the region will achieve meaningful revenue and profit
growth over the next five years, and deliver against its goal of
mid-teen margins over time. Gass said, “Our past performance is not
indicative of the sizable and profitable opportunity across EMEA. We
have a comprehensive set of initiatives that will build on our
investments over the past decade to ensure sustained and healthy
profitability for the region.”
Channel Development to Double International Footprint by 2015
In the two years since Starbucks outlined plans to leverage innovation,
its global retail store footprint and its social and digital media
expertise to drive accelerated growth in the company’s consumer packaged
goods (CPG) business, Starbucks Channel Development has become the
company’s second largest operating segment, growing 50 percent to $1.3
billion in revenue in fiscal 2012. Jeff Hansberry, president, Starbucks
Channel Development and Emerging Brands, announced that he expected his
business to double its international Channel Development footprint by
2015, building on its more than 100,000 points of distribution in 20
countries, and to eventually rival Starbucks retail store portfolio in
terms of size and profitability. Hansberry also announced exciting plans
to expand the company’s My Starbucks Rewards customer loyalty program to
enable customers to earn Starbucks stars – redeemable for free beverages
and food at Starbucks retail stores – when they purchase
Starbucks-branded products in CPG channels. When the expanded program
launches in 2013 it will be the first, and most innovative,
cross-channel (retail/CPG) customer loyalty program in the world.
Teavana Acquisition to Globally Transform Tea Industry
Starbucks reiterated plans to vault itself into a leadership position of
the $40 billion global tea market with its intended acquisition of
Teavana, which the company previously announced on November 14, 2012.
The company shared for the first time that it plans over time to offer
handcrafted Teavana® tea beverages at Teavana mall and neighborhood
stores and eventually at Starbucks stores. Once the acquisition is
complete, Starbucks and Teavana will together jumpstart the next wave of
growth in the tea category, leveraging Starbucks core competencies in
handcrafted beverage, real estate and design and integrating these with
Teavana’s world-class tea authority, merchandising and best-in-class
retail store unit economics. Powered by Starbucks existing
infrastructure, Starbucks plans to continue to grow and extend Teavana’s
already-successful 300 mall-based stores as well as add a high-profile
neighborhood store concept that will accelerate Teavana’s domestic and
global footprint.
Digital and Loyalty Platforms Transforming Customer Connections
Beyond Retail
Beyond retail store and CPG channel developments, Starbucks described
how its digital and loyalty platforms and initiatives are transforming
the way it connects with customers, strengthening brand relevance,
delivering greater value and convenience to consumers - and producing
greater profits for shareholders. Chief digital officer Adam Brotman
described how the company’s social, web, mobile, loyalty and card assets
differentiate Starbucks from any other retailer and combine to directly
drive growth across the company’s business and around the world. Brotman
announced that Starbucks cards are now used in approximately 25 percent
of the company’s U.S. transactions and that the amount of dollars loaded
on Starbucks cards increased by more than 20 percent last year. He also
expects the company’s mobile payment platform to account for 10 percent
of payments in Starbucks U.S. stores by the end of fiscal 2013.
About Starbucks Corporation
Since 1971, Starbucks Coffee Company has been committed to ethically
sourcing and roasting the highest-quality arabica coffee in the
world. Today, with stores around the globe, the company is the premier
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 contains forward-looking statements, including statements
relating to certain company initiatives and plans, as well as trends in
or expectations regarding, growth in Starbucks global retail, emerging
brands and CPG channels, including number of stores, store openings and
renovations, CPG distribution points, availability of products in
Starbucks stores, the size of the China market, revenues, profit and
operating margins, expansion of My Starbucks Rewards loyalty program in
the CPG channel, expectations regarding tea and the intended acquisition
of Teavana, and Starbucks digital and loyalty platforms. These
forward-looking statements are based on currently available operating,
financial and competitive information and are subject to a number of
significant risks and uncertainties. Actual future results may differ
materially depending on a variety of factors including, but not limited
to, coffee, dairy and other raw material prices and availability, costs
associated with, and the successful execution of, the company’s
initiatives and plans, the performance by third parties of their
agreements with us, the acceptance of the company’s products by our
customers, 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 filings with the Securities and
Exchange Commission, including the "Risk Factors" section of Starbucks
Annual Report on Form 10-K for the fiscal year ended September 30, 2012.
The company assumes no obligation to update any of these forward-looking
statements.
Source: Starbucks Corporation
Starbucks Coffee Company
Media Contact:
Zack Hutson,
+1-206-318-7100
press@starbucks.com
or
Investor
Relations:
JoAnn DeGrande, +1-206-318-7118
investorrelations@starbucks.com