Starbucks Strengthens Commitment in China

Long-term China growth aspirations on-track with 2,000 stores

Reaffirms Employer of Choice commitment with largest-ever Partner-Family Forum in Chengdu and China partner experience investments

Continued innovation in customer experience through Starbucks social gifting

Alibaba Group Founder and Executive Chairman, Jack Ma, joins Starbucks chairman and ceo, Howard Schultz, to discuss the role and responsibility of 21st Century companies

CHENGDU, China; January 12, 2016 – Howard Schultz, chairman and chief executive officer, Starbucks Coffee Company (NASDAQ: SBUX) today reaffirmed the strategic role of the China market in shaping the future of the company with the announcement of several market-leading initiatives, further elevating the unique Starbucks Experience for partners (employees) and customers.

Schultz and other company leaders announced the initiatives at Starbucks China Partner-Family Forum in Chengdu where they joined more than 1,300 Central and Western China region partners and their family members to experience Starbucks mission and values together and celebrated the 2,000 store milestone achievement.

“As Starbucks second largest and fastest-growing market globally, China represents the most important and exciting opportunity ahead of us,” said Schultz. “We are deeply humbled by the enthusiasm with which Chinese people have embraced Starbucks as part of their daily ritual over the past 17 years. Over time, it’s conceivable that China could become our largest market and I am grateful to our 30,000 dedicated China partners and their supportive families for the significant contributions they are making to Starbucks success. The continued investments we are making, coupled with the culture of innovation we have established, are elevating Starbucks partner and customer experience beyond that of any other retailer in China.”

Joining Schultz on stage at the Partner Family Forum was Jack Ma, founder and executive chairman of Alibaba Group, where both leaders shared their vision to redefine the roles and responsibilities of a for-profit public company – one that invests in its people, giving back to the local communities in meaningful ways, and creating unique developmental opportunities for the youth of today.

In his introduction of Ma at the Starbucks China Partner Family Forum, Schultz said, “When he and I get together we’re talking about common values and we’re talking about humanity. Together building the kind of companies our parents would be proud of. I asked him to come here and share with you his thoughts about building his company and share with you what it means to succeed against all odds in China.”

In addressing the Starbucks Partner Family Forum Ma said, “Alibaba hopes to work together with Starbucks to create even more opportunities to develop Chinese youth because they are our future. All of you at today’s event represent China’s future. The more seeds of love we sow in our Chinese youth today, the more love they will give to the world tomorrow.”

Unparalleled Partner Investments

The Partner Family Forum is a first-of-its-kind employee engagement event, first introduced by Starbucks China in 2012, as part of a series of new initiatives aimed to honor the special role families play in China. Today’s event highlights Starbucks aspiration to build the world’s most admired and trusted company, while recognizing the significant contributions partners have made and will continue to play in the company’s success in China. The Starbucks Central and Western region is one of the fastest growing regions in China, having tripled its store footprint over the past three years, now operates more than 300 stores across 23 cities.

In addressing Starbucks China partners and family members at the standing room only Partner Family Forum in Chengdu, Schultz said, “I am so incredibly proud of what you (Starbucks China partners) have accomplished. And I promise you (the parents of Starbucks partners) we will grow this company the right way. I am a true believer in the future of China because of the humanity and the heart and the conscience of the Chinese people. And we will do everything we can to continue to build a great and enduring company that you and your parents can be proud of.”

Beginning this month, full-time baristas and shift supervisors* in Starbucks company-owned stores across China will receive a monthly housing allowance subsidy to help them overcome the initial financial challenges of starting their careers and often, living and working independently. This benefit is expected to on-average to cover 50-percent of their monthly housing expenditures, enabling partners who are starting in their careers the ability to better take care of themselves, while they pursue their personal and professional dreams.

In addition, Starbucks China will introduce the Career Coffee Break, a partner benefit tradition from the U.S., to recognize, appreciate and honor the hard work put in by long serving partners. Starting this month, Starbucks partners within our company-operated store with 10 consecutive years of service will be eligible to apply for a career coffee break, of up to 12 months unpaid leave, to refresh themselves and more importantly, spend quality time with their loved ones and family. The partner will be guaranteed reinstatement to either the same position or a position with similar pay and benefits upon their return to work. The partner’s social and company benefits will also continue during the career coffee break.

“These and other industry-leading partner investments demonstrate our continued commitment to support our China partners to achieve their personal and professional aspirations,” said Belinda Wong, president, Starbucks China. “Families play a tremendous role in the life and career choices for our partners in China and it’s important that we include their families in the conversation of who we are as a company and the investments we’re making toward supporting our partners’ future.”

Starbucks has always believed that success is best when shared. The current pay and benefits programs have reflected the company’s commitment to take care of its partners and their families by offering comprehensive health insurance to full-and part-time partners, and the Starbucks Bean Stock program which gives all partners equity in the company. In addition to the ongoing training and development opportunities at the Starbucks China University, last year the company introduced the Starbucks China Talent Exchange Program for retail partners. In 2015, 16 partners started their international one-year exchange program in Singapore, while another 32 partners have had the opportunity to work in various store locations across China.

Starbucks was named China Best Employer by Aon Hewitt twice consecutively in 2013 and 2015, and China Best Employer Award and Best HR Management Company by Zhaopin and 51job, China’s leading human resource portals, respectively.

Elevating the Customer Experience

Over the past 17 years, Starbucks has been incredibly humbled by how its Chinese customers have come to embrace its stores as a community gathering place. Innovating the customer experience is core to the company and Starbucks once again delivered on this commitment with the opening of an e-flagship store on Alibaba’s Tmall last month, China’s largest open business-to-consumer (B2C) platform. As Starbucks first social gifting platform in China, the Starbucks Tmall e-flagship store enables customers to foster deeper and more meaningful connections with their friends and loved ones by giving them a convenient and easy way to send a Starbucks gift digitally. Customers have embraced this new social gifting concept with great enthusiasm. The store has more than 300,000 registered fans and has become the number one performing brand on Tmall’s “Food and Beverage” category within its first month.

“Digital is highly relevant to our customers in China and we are committed to building a locally-relevant Starbucks 4th-place Experience that seamlessly integrates our unique store experience and the digital space, while building moments of human connection for our customers” added Wong. “We will learn from the experiences in our other markets and explore new strategic partnerships with leading platforms to enable the Starbucks China digital flywheel. More awaits us as we implement new digital experience innovations to surprise, delight and exceed the expectations of our Chinese customers.”

Starbucks continues to elevate and innovate its unsurpassed coffee experience at the forefront of its stores for the Chinese customer. Over the past two years, Starbucks opened 45 Starbucks Reserve stores and introduced the pour-over slow bar in 150 stores across China. The Starbucks Reserve stores are specialized store experiences in China devoted to highlighting some of the world’s most exotic, rare and exquisite coffees that are available in limited quantities globally.

As Starbucks accelerates its growth in China to achieve its goal to operate 3,400 stores by 2019, so too will its foundational aspiration to build a different kind of company - one committed to being performance-driven through the lens of humanity. Through the Starbucks China Youth Development Program introduced in June 2014, the company has convened numerous leading experts to establish a unique curriculum focused on developing future leaders in China. 1,500 university students, from both urban and rural areas, and those with disadvantaged backgrounds, will benefit from the program over three years.

*across all company operated markets with a minimum of six-months with Starbucks China required for eligibility.

Extended captions for photos above:

Starbucks chairman and ceo, Howard Schultz, greets partners (employees) and their family members at Starbucks Partner Family Forum in Chengdu China on Tuesday January 12, 2016.

Starbucks chairman and ceo, Howard Schultz, addresses more than 1,300 company partners (employees) and their family members at Starbucks largest-ever Partner Family Forum in Chengdu China on Tuesday January 12, 2016.

Jack Ma, founder and executive chairman of Alibaba Group (left), and Starbucks chairman and ceo, Howard Schultz (right), shared their visions with more than 1,300 Starbucks partners (employees) and their family members on redefining the role and responsibility of 21st Century public companies at Starbucks Partner Family Forum in Chengdu China on Tuesday January 12, 2016.

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