Shaking Up Management
Anemic sales at Starbucks had led to the company’s stock losing half its value in a single year, so Mr. Schultz fired James L. Donald, the chief executive, and installed himself in the top seat. He pledged to bring “laserlike focus” to reining in the chain’s unwieldy collection of locations and products and reviving the company’s original appeal. Within a month, Mr. Schultz said that Starbucks would discontinue breakfast sandwiches, whose scent, he said, “interferes with the coffee aroma in our stores.” He also slashed head count, cut a swath through top management and closed underperforming American stores.
The Instant Coffee Test
Starbucks introduced Via Ready Brew, an instant coffee option, which was more affordable than many of the chain’s more complicated concoctions. Many saw the product as an attempt to attract consumers battered by the recession. The chief executive had pushed for a nationwide Via debut in January 2009. But cooler heads prevailed, and skeptical consumers were introduced gradually to the product, with a test run in Seattle and Chicago followed by a nationwide rollout. In 2010, Via pulled in more than $200 million in revenue.
As Mr. Schultz closed hundreds of American stores, he pushed for aggressive overseas expansion into India, Brazil and elsewhere. Under his watch, Starbucks’s corporate structure was reworked to include three divisions focusing on Asia, the Americas and a broad region that included Europe, the Middle East and Africa. Last year, Mr. Schultz said that China would eventually be a larger market for the company than the United States.
Muffins, Tea, Juice
The company began looking beyond Frappuccinos, buying the parent company of bakery brand La Boulange. In November, Starbucks agreed to purchase Teavana, a purveyor of high-end teas. By late 2013, the company had spent $750 million on the two companies as well as on the juice brand Evolution Fresh. “We have a lot going on,” Mr. Schultz said.
No Guns, Please
Months after a gunman killed 26 people, most of them young children, at Sandy Hook Elementary School in Newtown, Conn., Starbucks asked customers not to take firearms into and around cafes. Mr. Schultz acknowledged “the emotionally charged nature” of the gun rights issue but said that he was trying to consider customers who “have been jarred and fairly uncomfortable to see guns in our stores.” In an open letter, he wrote that gun rights activists were using the stores “as a political stage” for events that “disingenuously portray Starbucks as a champion of open carry,” which in turn provoked protests from gun control supporters. Under Mr. Schultz, the company has also circulated a petition about a 2013 government shutdown and applauded a 2015 Supreme Court ruling about gay marriage.