Howard Schultz

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?

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.

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.

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?

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?

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.

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.

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.

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.

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.

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.