Howard Schultz
speaker
633 appearances
1 recordings
1 series
first heard Jun 2024
last heard Jun 2024
Howard Schultz’s voice in public audio — every appearance, attributed to the second.
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Appearances
I don't think people knew what I was even doing. I mean, I think maybe a few people, you know, I just had the thought, we got to put this in a bottle.
We have to put this in a bottle. And this product, if I'm remembering right, was so successful, the instant that it hit store shelves, you had to pull it all off because you needed to create new manufacturing processes and spin up new factories in order to make enough to actually satisfy demand.
Basically correct. And we also, early on, had a recall where they found glass in the bottle. And Pepsi, to its credit, took all the blame for that and fixed it. But yeah, it was from minute one, the power of Starbucks and Bottle Frappuccino and doing something we had never, no one, it was no bottled coffee, let alone.
And again, just like the Costco story and the United Airlines story, the flywheel of the awareness of, and people drinking something they can enjoy at home or at work. Again, it just created another level of velocity on the brand.
I mean, I'm just thinking about between the cups, but then United Airlines and Costco and the CPG products, there's gotta have been like 50 billion Starbucks logos printed. I'm sure that was maybe more. I'm sure I could estimate it better.
But you can see where the size of the equity of the brand was much bigger than the size of the company, much bigger. Right, because at this point, you were like 800 stores. Yeah, but then something else happened. And that is we wake up one day and someone says, Starbucks is in a movie. And we said, what movie? You've got mail. That wasn't coordinated?
First of all, Starbucks never paid for placement. Someone must have approved it. I knew nothing about it. And then someone said, you got to see this movie, Starbucks all over it. I said, what movie? Tom Hanks, You've Got Mail with Meg Ryan. I knew nothing about it. It was just another thing where it was just like a little fairy dust on the brand.
We were so in the mud. It was so in it that we didn't have time to look up. And we were just running so fast, so hard. When you're growing at this pace, it's almost virtually impossible to catch the growth in terms of the infrastructure.
And so you're constantly back and forth trying to create that fragile balance between the seductive nature and the intoxication of growth and success and the foundation necessary to support it and not falling too far behind where you lose it. But you never are in a position, at least we were never in a position, we were ahead of it, never.
And so there was a constant push, and I think this is where Oren was the wise man in the room to say, Howard, we just can't do that now. We don't have the infrastructure, we don't have the people, we don't have the systems. And I'd be screaming, we gotta do it. If we don't do it, someone else is gonna do it, we gotta do it. And that takes us to international. We weren't ready for that.
Yeah, so I wanna, putting a bow on Frappuccino, the year after it launched in 1996, Frappuccinos were 7% of revenue, which I can attest to. Maybe freshman year of high school. Seven-year-old Ben is like, hit me with that Frappuccino. I had my first tall mocha Frappuccino with whipped cream and a little chocolate drizzle on top. And now here I am drinking, what are we drinking here?
You're drinking coffee from India. Yeah, and no cream, no sugar. No, no, only black. And so the Frappuccino began my journey to the good stuff. So that's the Frappuccino story, 96, 97, 98. I mean, this is the international story. So I love the Japan story. You've told this to me before, but I'd love to hear it on the quiet. Okay, and there's a couple of things about this.
I started taking a couple of trips to Europe and Asia just to get a sense of what the opportunity would be and how would we do it. I quickly wrote off Europe because coffee was there. I didn't think we could possibly enter as an American company. And so we just took Europe off.
Yeah, not going to happen. And so we said we just took it off the map. and then uh we we narrowed our focus very quickly on japan japan had a couple of thousand coffee stores named dotor you walk in there and it was smoke filled mostly men dark but they were successful and so i said to the board we want to go to japan The board was incredibly resistant to the idea. Why?
You've got all this white space in America. There's no need to do this at the time. And I just said, OK, well. And so one thing led to another. And a board member said, if you're considering this, hire an outside resource to do a study. I was livid about that. Aren't there some consultants you could possibly pay to help this?
And so we hired a consultant who came back with a big book, presented it to the board. I had a preview, and it basically was, this is a non-starter. You can't possibly succeed there. And in the meeting, I could feel my blood just boiling because with every statement, it was getting worse. Like, the economics won't work. No one in Japan will ever walk in the street with a cup of coffee.
They would lose face. Your no smoking policy, which we had from the beginning, is a non-starter. And you can't afford the economics to rent. Don't go. Well, that only made me more furious. It's like they've never met you. And more intentional. And so... We kept thinking about this. And then one day, we get a handwritten letter from a Japanese company.
And the founder of the company, Yuji-san, had a LA restaurant. And he was enamored with Starbucks. And we sit down with him. We fall in love with him. And we weren't ready, but we decided we're going to give it a shot. We go to Tokyo, we meet him.
We ended up forming a JV and you know, the folklore at Starbucks, which is not that unrealistic is the reason we went to Japan as an international market is because it had direct flight to Seattle. That was the extent of our understanding. Now, We open up in August. If you've been to Tokyo in August, it's hot. It's like 95 degree temperature and 100% humidity.
It's like getting out of a New York City subway in the middle of August. As soon as you walk out, you need a shower. It's going to be a tough opening because of the hot weather. I'm very concerned about it.
Showing 281–300 of 633 · page 15 of 32
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