The Surprising History of Starbucks


To say Starbucks is a household name is an understatement. Starbucks is not only one of the most well-known coffee brands in the world; it is one of the most well-known brands period. It’s difficult for younger people to imagine a world without Starbucks, and some older people may not recall what life was like before there was a Starbucks on every major street corner.

This article will take you through the history of the coffee behemoth Starbucks. How did Starbucks come to be? Starbucks is owned by whom? Is it a chain, or is it not? In this comprehensive Starbucks history, we’ll answer all of these questions and more.

When Was Starbucks Founded?

Jerry Baldwin, Zev Siegl, and Gordon Bowker founded Starbucks in 1971 in Seattle, Washington. The three founders met as University of San Francisco students. Starbucks’ history is inextricably linked with that of another coffee company. Alfred Peet, founder of the world-famous Peet’s Coffee & Tea, taught Baldwin, Siegl, and Bowker how to roast coffee.

Starbucks was chosen by the three founders following a brainstorming session in which they attempted to come up with as many words beginning with the letters “st” as possible. Gordon Bowker owned an advertising agency and wanted to focus on “st” names because he believed they were more common in successful brands and companies. Starbuck, a character from Herman Melville’s novel Moby-Dick, was among the “st” names. As they say, the rest is history.

Rise of an Empire

Starbucks grew from humble beginnings in Seattle’s Pike Place Market to a total of six stores in the Seattle area by 1986. In 1987, the original owners sold the Starbucks brand to Howard Schulz, a coffee business owner who piggybacked on top of his existing brands to aggressively expand the company.

The first Starbucks locations outside of Seattle opened the same year, in Vancouver, British Columbia, and Chicago, Illinois. Only two years later, in 1989, there were 46 Starbucks locations across the western United States and Canada. This was only the beginning of Starbucks’ meteoric rise; three years later, in 1992, the company went public with 140 locations and a staggering $73.5 million in revenue.

Global Presence

Starbucks as we know it today is a global phenomenon that has spread to every corner of the globe. However, there were no Starbucks locations outside of North America in 1996 until July, when the first opened in Tokyo, Japan. Soon after, in December 1997, the Philippines became the second Starbucks outside of North America.

Starbucks continued to expand after getting its foot in the door of the international coffee market, and soon there were locations in the United Kingdom, Mexico, and Australia. At this point, in the early 2000s, Starbucks began acquiring other coffee companies in order to expand their reach and production capacity. By April 2003, Starbucks had acquired Seattle’s Best Coffee, Torrefazione Italia, and Peet’s Coffee.

As of 2004, there were approximately 7,000 stores in over a dozen countries worldwide.

A Short Interruption

Despite its meteoric rise, Starbucks’ Cinderella story was put on hold in 2008 as the world’s economies sputtered and crashed. Starbucks announced in July that they would be closing 600 Starbucks locations, a staggering number considering that 600 stores would have been roughly half of all their locations ten years ago.

Although the recession ultimately cost Starbucks a significant portion of its stores as well as a large number of its employees’ jobs, it proved to be nothing more than a speed bump. Starbucks began to recover and thrive as the recession subsided and economies began to recover.

Starbucks Today

It’s easy to overlook the astounding fact that Starbucks is not a franchise. In contrast to another global behemoth, McDonald’s, each Starbucks is owned by the parent company. Individuals cannot own and run a Starbucks in the same way that a McDonald’s franchisee can. Starbucks instead operates under a licence agreement.

Starbucks will have 32,660 locations in 83 countries by September 2020. Starbucks’ growth over time exhibits a clear exponential curve, indicating the company’s explosive impact on the coffee industry. It is unrealistic to expect the growth rate to continue at this rate, with Starbucks aiming for 55,000 locations worldwide over the next decade. Starbucks has already surpassed a billion dollars in annual revenue, with a projected $2.3 billion in revenue in 2020.

Conclusion

Starbucks continues to innovate, adapt, and push the boundaries of what it means to be a mainstream coffee chain. Starbucks has expanded beyond its purely coffee origins to become a one-stop-shop for coffee and snacks for people on the go, wherever they may be.

Every day, the coffee industry faces new challenges. The future of coffee has never been more uncertain, with climate change affecting growing conditions and unsustainable farming practises. However, one thing is certain. Starbucks will undoubtedly be present wherever the coffee industry goes in the coming decades, leading the way as the de facto face of coffee.

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