Editor’s note: Starbucks 2016 Annual Meeting of Shareholders concluded with a performance by Alicia Keys. New announcements arehighlighted in bold.
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Starbucks chairman and ceo Howard Schultz returns to stage, McCaw Hall, Starbucks 2016 Annual Meeting of Shareholders
After sharing a video showing divisiveness and despair in the U.S., Schultz said he’s “struggled for weeks to find the right words to express the pain I feel in my heart about where America is headed and the cloud hanging over the American people." He said there are moments when he’s had a “hard time recognizing who we are and who we are becoming.”
Schultz recalled a question he posed two years ago at Starbucks 2014 Annual Meeting of Shareholders: What is the role and responsibility of a for-profit company? In the two years since, “dysfunction and polarization have worsened,” he said.
Schultz views the American Dream as a “reservoir” that is replenished with the values, work ethic and integrity of the American people. “Sadly, our reservoir is running dry,” he said, “depleted by cynicism, despair, division, exclusion, fear and indifference.”
Given that, Schultz posed a new question: What is the role and responsibility of all of us, as citizens?
He urged partners, shareholders and others to “fill the reservoir of the American Dream back up not with cynicism, but with optimism. Not with despair, but with possibility. Not with division, but with unity. Not with exclusion, but with inclusion. Not with fear, but with compassion. Not with indifference, but with love.”
“It’s not about the choice we make every four years, but about the choices we make every day,” Schultz said.
Kevin Johnson returns to stage at McCaw Hall, Starbucks 2016 Annual Meeting of Shareholders, and outlines Starbucks journey with technology. Starbucks loyalty and digital platform becomes the foundation for the “next phase of our journey.”
2001, Starbucks sold its first gift cards. In the past holiday season, 1 in 6 American adults received a Starbucks gift card. 2009, Enabled customers to register gift cards and become a Starbucks Rewards Member. Today, there are over 20 million loyalty members globally. 2011, Starbucks Mobile App launched. Today, there are over 17 million active users of the mobile app, which is up 35% year-over-year growth. 2014, Starbucks Mobile Order & Pay launched. 2015, Starbucks Mobile App extended beyond the transactional relationship with Starbucks. The company has partnered with The New York Times, Lyft, and Spotify. 2016, Starbucks Mobile App integrates with Spotify allowing customer to know what music is playing. They can also sign up for the Premium Spotify service to earn Starbucks Stars as a part of that relationship
Starbucks has exceeded 12.1 million active Rewards customers.
Recent changes to the Starbucks Rewards program, along with the launch of a new version of the Starbucks Mobile App, will take place on April 12.
(Johnson demonstrates features of the new app)
With this evolution of Starbucks loyalty program, the company has unlocked the opportunity for its customers to be rewarded outside of Starbucks.
Johnson poses questions: Wouldn’t it be nice to have a payment card that enabled you to earn Starbucks Stars for every dollar you spent using that card? If this card were accepted virtually anywhere, you could use it as your primary card for shopping, travel and other payments with the Stars you earned deposited right into your Starbucks Rewards account.
Starbucks is announcing the Starbucks Rewards Prepaid Card – a prepaid, reloadable card with JPMorgan Chase which will allow customers to earn stars anywhere Visa is accepted. The card will be available by the end of the year.
Johnson references the Starbucks Mission Statement: To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time, and shares a personal story about his recent trip to Costa Rica. There he visited coffee farms, including one run by multiple generations of one family.
Starbucks One Tree for Every Bag commitment is on track to donate 20 million rust-resistant coffee trees to farmers by the end of this year.
Gerri Martin-Flickinger, executive vice president, chief technology officer
Martin-Flickinger reflects on her first few months with the company and her experiences with partners in Starbucks stores, and on the technology that helps baristas accomplish their work and connect with their customers.
“In the coming months and years, you will see us continue to deliver on a basic aspiration: To deliver technology that enhances the human connection.”
Technology is playing a bigger role, with millions of customers using the Starbucks Mobile App on a regular basis.
Starbucks continues to innovate and intends to “stay a step or two ahead of the competitors," said Kevin Johnson, who then introduced the first chief technology officer in Starbucks history. Gerri Martin-Flickinger joined Starbucks in October of 2015.
Michael Conway, president Global Channel Development
In the U.S., there are over 1.3 billion cups of coffee enjoyed each week, primarily purchased in the grocery aisle. Based on success in the U.S., Starbucks is expanding Ready-To-Drink (RTD) growth in international markets and Single Serve category leadership.
International Ready-To-Drink Beverage Expansion
- U.S. – This summer, we will launch Starbucks® Ready-to-Drink Cold Brew Coffee.
- China – Starting in May, Starbucks will expand from a regional to national business, achieving distribution in nearly every major city throughout China.
- EMEA – Recently launched RTD in six Middle East countries. Caffé Americano with Milk launches next month across Western Europe.
- Latin America – By the end of this year, RTD will expand from four markets to 10.
Single Serve Leadership
Starbucks has extended its agreement with Keurig Green Mountain to continue as the supplier of K Cups.
This summer, Starbucks will introduce an entirely new platform – the Starbucks® Caffé Latte K-Cup® Packs with three signature flavors: Caramel, Vanilla, and Mocha. This fall Starbucks will introduce seasonal favorites Pumpkin Spice Latte and Peppermint Mocha.
Starbucks announces the European launch of Starbucks espresso capsules, compatible with Nespresso machines, in both the UK and France.Customers will find the Starbucks espresso capsules in stores, online and where groceries are sold.
Kevin Johnson, president and chief operating officer
In 2009, when Johnson first joined the Starbucks Board of Directors, the company had about 16,000 stores and delivered $9.8 billion in revenue. Compare that with FY15 when Starbucks has more than 23,000 stores and $19.2 billion in revenue.
Record Performance by Region:
- Americas – 16 countries with 14,974 stores, 15% operating income increase
- Europe, Middle East and Africa (EMEA) – 39 countries with 2,441 stores, 41% operating income increase
- China/Asia Pacific (CAP) – 15 countries with 5,743 stores (2,000 in China), 34% operating income increase
As Johnson has traveled the world, he’s observed four key ingredients that create the Starbucks brand.
- Great partners who connect with customers
- Beautiful stores for people to relax and connect
- Innovative offerings with new beverages and food items
- The world’s highest quality coffee
Starbucks sources coffee from large and small farms (more than 300,000 farmers) from nearly 30 countries around the world. That includes the coffee farm Starbucks owns in Costa Rica – Hacienda Alsacia.
Starbucks operates several Farmer Support Centers around the world, helping farmers with agronomy and financial support through a farmer loan program.
Teavana and the global tea market
In FY15, Teavana sold nearly $1 billion of handcrafted tea beverages in Starbucks stores throughout the U.S. Later in 2016, Starbucks will offer Teavana tea beverages in Starbucks stores in Europe and China/Asia Pacific.
Howard Schultz, chairman and chief executive officer
Acknowledges Starbucks Board of Directors, veterans and military spouses, and partners (employees).
Starbucks has more than 2,000 stores in 100 cities, nearly every province in China, with plans to open 500 stores per year for the next five years. Worldwide, Starbucks has about 24,000 stores in 70 countries with more than 300,000 partners (employees) enabling another record year for the company.
"We are playing the long game in China. We are building one of the most respected and iconic brands in the country," said Howard Schultz. "I believe China will be as large, or larger, than the U.S. business in the future."
Starbucks Shareholder Value
- $19.2 Billion Net Revenue
- $3.6 Billion Record Profit
- +54% Stock Price Growth (during FY15)
- $88 Billion+ Market Cap (as of today)
Starbucks Partner Investments
- $284 Million Invested in Health Care Benefits
- $167 Million in Pre-Tax Bean Stock Gains ($1.4 Billion since program’s inception)
- $64 Million matched in 401(K) Contributions
“We are a performance-driven company through the lens of humanity. We’re at our best when we make our partners proud.”
Starbucks has hired 7,000 Opportunity Youth – young people between the ages of 16 and 24 who aren’t in school and aren’t working. Collectively, the 100,000 Opportunities Initiative has hired 25,000 through three job fairs in Chicago, Phoenix and Los Angeles. The next 100,000 Opportunities Initiative Hiring Fair and Forum will be in Seattle on May 5, 2016.
Starbucks is creating opportunities for veterans and military spouses with 20 dedicated Military Family Stores. To date, Starbucks has hired 6,500 veterans and military spouses.
The Starbucks College Achievement Plan is a lifetime opportunity for partners. Starbucks has more than 5,000 partners currently enrolled, receiving full tuition reimbursement for a bachelor’s degree through Arizona State University.
Schultz discusses the relevancy of Starbucks brand around the world - from the Red Cup (non)controversy to the lines out the door when Starbucks opened in cities around the world such as: Huangshi, Jiling, Azarbaijan, Dezhou and Kazakhstan.
A long-held dream of opening a Starbucks store in Italy will also come true in early 2017. New video below:
10:04: Starbucks China partners' mastery of an ancient art form earned them a trip to Seattle to perform at the opening of the company's Annual Meeting. Full story: Starbucks Baristas Journey from Chengdu to Perform in Seattle
Starbucks (NASDAQ: SBUX) 2016 Annual Meeting of Shareholders begins at 10:00 a.m. PT. Live webcast here.
Announced earlier this morning: Starbucks Joins TurboVote Challenge to Encourage U.S. Voting
Ahead of the event, meet Starbucks Board of Directors
Lines form outside McCaw Hall in Seattle