Brand Bible

Starbucks

Changzhi Lee and Jeremy DiPaolo

In 1983, Howard Schultz went to Italy. What he saw there would change his career, his company, and the way we think about consumption.

On March 30, 1971, three partners (two teachers and a writer) opened Starbucks Coffee and Tea in Seattle’s Pike Place Market. Inspired by entrepreneur Alfred Peet—whose Peet’s Coffee & Tea had introduced artisanal coffee to the United States in the late ’60s—the first Starbucks sold high-quality coffee beans and high-end coffee-making equipment. Other than the occasional sampler, the early store didn’t feature the beverages for which the company is now so renowned. By 1980, the company had four stores in Seattle, still focused on selling gourmet coffee beans and their supporting accessories. The shift that would transform the company came from Howard Schultz, who joined as director of marketing in 1982.

While in Milan for a housewares convention, Schultz was struck by the extraordinary environment of the espresso bars that dotted the city. Not only did these bars serve excellent, robust coffee, but they were also gathering places. People called each other by name.8 These spaces formed a big part of Italy’s societal glue. Instantly recognizing an opportunity for Starbucks to capitalize on this model, Schultz sought to extract the essence of Italian coffee culture—high-quality handcrafted drinks in a convivial setting—and import it to the United States. However, it would take a falling out with the partners, the formation of his own company, and the eventual acquisition of Starbucks, in 1987, to see his vision come to light. When Schultz finally became CEO of Starbucks, he immediately set to work on implementing his entrepreneurial vision for the company’s expansion and eventual dominance of the specialty coffee market. And selling great coffee was only part of the equation.

Starbucks’ relevance as an iconic brand is evidenced by its ability to capture the spirit of Schultz’s beloved Italian espresso bars and not simply offer a great product, but build a culture around the way people consume it. The brand, in short, was establishing a platform for personalized experience.

Before Starbucks, aficionados had to rely on their relationship with a coffee vendor to ensure they would receive their beverage “their way.” And still, enter any neighborhood coffeehouse, and the consumer’s cup is at the relative mercy of the barista’s skill and interest level. Starbucks, through its rigid, systematized process of drink making and its accompanying language—which has been parodied since its inception—allows consumers to receive the same “iced triple grande two-pump vanilla nonfat latte” at any location, any time.

During the 1990s, the very moment Starbucks began its massive expansion into multiple U.S. markets, Generation X, with its emphasis on individual values, found a particular resonance with the ability to personalize (and identify with) a coffee concoction. The brand’s Seattle roots gave it a special kind of authenticity, as the city would become a cultural beacon of music, fashion, and film during this time.

Offering customers a place to gather and share in the Starbucks experience was a key factor of the brand’s significance and popularity in the marketplace. Schultz set out to create an environment that was a midpoint between the workplace and home, a goal again informed by his experience in Milan. This “third place,” as he would later articulate it, was to be that convivial gathering spot for people to use as they wished: reading, chatting, or simply enjoying a moment over a frothy cappuccino. In those moments, consumers were taking in the entire multisensory experience: the flavors of “their” beverage, the call and echo of drink names, the punctuated hissing of the espresso machine and the rich aromas that followed, the mellow tunes, and the variety of customers waiting their turn for the same experience. Starbucks was building a community all its own, and the company did it on both sides of the counter.

Every employee of Starbucks is called a “partner,” even Howard Schultz. This corporate meta-tag very simply illustrates the company’s commitment to an internal culture that fosters the wealth of the company through collective achievement. Intensive training for all “partners” is met with competitive compensation packages that include stock options and health benefits for part-time staff. This attitude toward employees was almost unheard of at the time. But it allowed Starbucks to build a passionate culture of people who took stake in the company’s success, whether they were company leaders or part-time baristas.

Schultz captured the essence of that first trip to Milan and built a place where people could share in it. That first experience, which is now eloquently pruned and articulated as legend in Starbucks history, has gone through many iterations as the company has evolved. That the essence of it is unmistakably brewed into every cup, felt in every store, and understood through the appearance of the green-and-white Siren is testament to the deep equity the brand carries across the countries where it has arrived. The Starbucks phenomenon also speaks to the enormous potential for personal experience to shape our world.