CEO interviews and reporting on the top global coffee brand.

Insights: Starbucks

 SPEAKER 1: You certainly passed a huge leadership test on the way that you handled that controversial episode involving the arrest of two black men in one of your Philadelphia stores a few months ago. You apologized. You said, I'm accountable. You closed thousands of stores for the day to do racial bias training. What was your thinking at the time? What motivated you to take those steps? SPEAKER 2: Well, first of all, if you think about the Starbucks experience and our mission, it is to create a warm, welcoming environment to every person who steps into our stores, a sense of belonging. And we failed that day. We did not live up to our mission, our values, and how this company was built. And so clearly, my responsibility was to get on the ground and understand everything I could about why it happened, how it happened, and then take appropriate action to ensure that that never happens again. SPEAKER 1: You were very quick to respond. What was your thinking at the time? SPEAKER 2: When something like this occurs, and you know, it's not planned. It's not anticipated. But the end of the day, being accountable, you engage. And that's exactly what I did. You know, certainly on the very first day, I engaged and wrote a letter to all customers and partners. In the very next day, I was on the ground in Philadelphia. Then as a result, we've become a better company from it. It has put us in a position where we are having the kind of discussions around race and race relationships and unconscious bias that are difficult discussions in America. 

Insights: What CEOs Can Learn From Starbucks’ Chief About Crisis Leadership

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CEO Kevin Johnson apologized and took responsibility.

What CEOs Can Learn From Starbucks About Crisis Leadership

CEO Kevin Johnson apologized immediately, took responsibility, and promised to fix the problem.

you certainly passed a huge leadership test on the way that you handled that controversial episode involving the arrest of two black men in one of your Philadelphia stores A few months ago. You apologized. You said I'm accountable. You close thousands of stores for the day to do racial bias training. What was your thinking at the time? What motivated you to take those steps? Well, first of all, if you think about the Starbucks experience in our mission, it is to create a warm, welcoming environment to every person who steps into our stores a sense of belonging. And we failed that day. We did not live up to our mission, our values and how this company was built. And so clearly my responsibility was to get on the ground and understand everything I could about why it happened, how it happened and then take appropriate action to ensure that that that never happens again. And you were very quick to respond. What was your thinking at the time when something like this occurs? And, uh, you know it's not planned? It's not anticipated, but the end of the day being accountable, you engaged, and that's exactly what I did, you know, certainly. On the very first day I engaged and wrote a letter to all customers and partners, and the very next day I was on the ground in Philadelphia. Then, as a result, we've become a better company from it, you know, it is put us in a position where we are having the kind of discussions around race and race relationships and unconscious bias that are difficult discussions in America.

 Well, look, growth at scale you know with 29,000 stores in 78 countries around the world, it means we have to sharpen our focus on the key priorities. And that's why we've set three strategic priorities. One is accelerating our growth in our targeted long-term markets of the US and China. Second is expanding the reach globally of our CPG and food services business in a global coffee alliance with Nestlé. And the third is sharpening our focus on shareholder value returns. And so we've been-- we've narrowed down the focus. We've streamlined the company. We're now focused on how we're accelerating the pace of innovation. And all of that is accruing value to the agenda, the growth agenda at scale. 

Insights: Starbucks CEO: "We Have to Sharpen Our Focus on the Key Priorities"

Kevin Johnson discusses the company's three-pronged plan.

Starbucks CEO: "Focus on the Key Priorities"

Kevin Johnson discusses the company's three-pronged plan. (October 2018)

Well, look, growth of scale, you know, With 29,000 stores and 78 countries around the world, it means we have to sharpen our focus on the key priorities. And that's why we've set three strategic priorities. One is accelerating our growth and are targeted long term markets of the U. S. And China. Second is expanding the reach globally of our CPG and Food Service is business in a global coffee alliance with Nestle, and the third is sharpening our focus on shareholder value returns. And so we've been we've narrowed down the focus we've streamlined the company were now focused on how we're accelerating the pace of innovation. And all of that is accruing value thio to the agenda, the growth agenda at scale.

 SPEAKER 1: You know, the number of jobs that we create in China, the number of customers we serve in China, the investment we make in building our stores is from local Chinese contractors. We work with Chinese artisans that make many of the artwork and much of the design in our stores. And so we're really integrated in China. And we're playing the long game. SPEAKER 2: Tell us a little bit about the local competition in China because we've been hearing more and more about this company called Luckin Coffee came from nowhere and now they're opening up stores everywhere. They seem to be pretty popular. How do you feel about them coming in on your turf? SPEAKER 1: You know, clearly, there are going to be more competitors. And we've always had competitors. So it's no surprise that there will be-- there will be new competitors in China and new competitors around the world. But we have to stay focused on the experience we create in our stores. You know, we serve 100 million customers a week in our stores and that's really where we set the brand. 

Insights: Starbucks CEO on China Trade Tensions: "We're Playing the Long Game"

Starbucks plans to open a store every 15 hours in China.

Starbucks CEO on China Trade Tensions

CEO Kevin Johnson plans to open a new Starbucks store every 15 hours in China. (October 2018)

you know the number of jobs that we create in China, the number of customers we serve in China. The investment we make in building our stores is from local Chinese contractors. We work with Chinese Artisan that make many of the artwork and much of the design in our stores. And so we're really integrated in China and we're playing a long game. Tell us a little bit about the local competition in China because even hearing more and more about this company called Luck and Coffee came from nowhere. And now they're opening up stores everywhere. They seem to be pretty popular. How do you feel about them coming in on your turf? You know, clearly there are gonna be more competitors, and we've always had competitors, so it's no surprise that there will be There will be new competitors in China and new competitors around the world. But we have to stay focused on the experience we create in our stores. You know, we serve 100 million customers a week in our stores, and that's really where we set the brand

 SPEAKER 1: In China, we had a-- we started in a joint venture with another joint venture partner that we owned 50% of in East China. And then as part of our journey, we started building out Western China as part of our company-operated environment. And a year ago, we deployed about 1 and 1/2 billion dollars of capital to acquire 100% of the joint venture. So we've unified mainland China as a company-operated market. And the philosophy and the principle is that it's built in China for China. So we have every aspect of what it takes to run a Starbucks in China. Belinda Wang is our chief executive officer of Starbucks China. We have a store development team that picks the real estate. They design the stores. They work with local contractors to build them. We have a food and beverage RND team. We have a digital tech team. Every aspect of China is built in China for China. There's two transformative elements of modern-day retail. The first is you have to create a customer experience in your store that makes that a destination, a destination for the consumer. And second, you have to extend the experience in the store to a digital mobile relationship. We've done that certainly in China with our mobile app and with our partnerships with Alibaba and Tencent on WeChat Pay and Ali pay. Over 60% of our tender in China is paid for digitally. 

Insights: Starbucks CEO: China Is Key to Future Growth

Starbucks CEO: China Is Key to Future Growth

CEO Kevin Johnson explained why at Fortune's Global Forum. (October 2018)

in China. We had had a We started in a joint venture with another joint venture partner that we owned 50% of in East China. And then it's part of our journey. We started building out. Western China is part of our company operated environment, and a year ago we deployed about one and 1/2 $1,000,000,000 of capital to acquire 100% of the joint venture so mainland We've unified mainland China as a company operated market, and the philosophy and the principle is that, um it's built in China for China. So we have every aspect of what it takes to run a Starbucks in China. Belinda Wong is our chief executive officer of Starbucks China. We have a store development team that picks the real estate. They designed the stores. They work with local contractors to build them. Ah, we have a food and beverage R and D team. We have a digital tech team. Every aspect of China is built in China. For China, there's two transformative elements of modern day retail. The first is you have to create a customer experience in your store that makes that a destination a destination for the consumer. And second, you have to extend the experience in the store to a digital mobile relationship. We've done that, uh, certainly in China, with our mobile app on with our partnerships with Alibaba and 10 Cent on we chat pay and Allie pay over 60% of our tender in China is paid for digitally.

Starbucks Reserve Roastery Milan is a sight to see.

Insights: How Starbucks Opened Its First Store In The Birthplace of Espresso

Starbucks Opened Its First Store In Italy

Starbucks Reserve Roastery Milan is a sight to see. (September 2018)

Insights: Watch The Evolution of Starbucks Through the Years

Here’s the timeline of the company’s milestones.

Watch The Evolution of Starbucks Through the Years

Here’s the timeline of the company’s milestones. (June 2017)

Insights: Starbucks

Insights: What CEOs Can Learn From Starbucks’ Chief About Crisis Leadership

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CEO Kevin Johnson apologized immediately, took responsibility, and promised to fix the problem.

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Insights: What CEOs Can Learn From Starbucks’ Chief About Crisis Leadership

Insights: Starbucks CEO: "We Have to Sharpen Our Focus on the Key Priorities"

Insights: Starbucks CEO on China Trade Tensions: "We're Playing the Long Game"

Insights: Starbucks CEO: China Is Key to Future Growth

Insights: How Starbucks Opened Its First Store In The Birthplace of Espresso

Insights: Watch The Evolution of Starbucks Through the Years