This morning, Starbucks chief executive officer Kevin Johnson hosted the company’s Annual Meeting of Shareholders. At last year’s meeting, he walked out onto a stage to the cheers of 4,000 people. This year, he addressed a camera to reach the thousands of people watching from home.
The virtual format and abbreviated length of the meeting are unusual, at least for Starbucks, but also reflect a unique moment for the world, as more and more people are feeling the health, economic and social impacts of COVID-19.
“If you have attended a Starbucks annual shareholder meeting in years past, you’ll notice immediately today’s meeting is a little different,” Johnson said. “Today we are all in a very unique moment in time. The world is grappling with a health issue of enormous scale and great human impact as we navigate COVID-19. And I’m sure each of you are taking actions in the best interest of your family and your community. At Starbucks, we are a family. We are always thinking of people – of each other – first. It’s why we call each other partners.”
Here are five important things to know about today’s Annual Meeting of Shareholders:
1. ‘Health and well-being’ is priority one
Johnson began the meeting by reiterating to the company’s customers, partners and shareholders his top priorities in navigating the current health crisis.
“Navigating this challenge requires Starbucks partners to make hundreds of real-time decisions each day in 82 markets around the world,” Johnson said.
They do so by using three principles, he said. First, the health and well-being of partners is the number one priority. Second, the company will continue to partner with local health officials and governments to help make a difference as we work to contain the virus. Third, Starbucks seeks to show up as a positive and responsible member of each community it belongs to.
“We prioritize these three principles over everything else, including any near-term economic implications,” he said. “We do this knowing this situation is temporary and Starbucks is resilient.”
2. Painting a future rooted in caring for people and growing its business responsibly
As Starbucks approaches its 50th anniversary in 2021, Johnson said the company will pursue “a bold vision that will modernize Starbucks while staying true to our heritage and what we stand for.”
The company will continue to invest in people, its partners, so they can in turn uplift customers and the communities they serve. For instance, the company this week announced a new partnership with mental health provider Lyra Health and a new benefit to provide partners and their families with 20 free counseling sessions each year.
Starbucks will continue to pursue profit while “redefining what it means to be a commercial enterprise by embracing our role and responsibility in society and humanity.” Starbucks also wants to be a planet positive company, as reflected in its latest announcement about environmental sustainability.
“All this together begins to paint our vision for the future,” Johnson said. “People positive, profit positive and planet positive, working in harmony with our partners, the heartbeat of Starbucks, to create a different kind of company for the next 50 years.”
3. Digital delivers for Starbucks and its customers. Literally
Starbucks continues to respond quickly to COVID-19 and to temporarily modify its long-held role as a community gathering place. Most recently, the company moved to a “to go” model for stores in the U.S. and Canada. Digital ordering and delivery options means customers can continue to enjoy Starbucks in other ways, such as ordering ahead through the Starbucks app, going through the Drive Thru and using Starbucks Delivers. Starbucks Delivers, in partnership with Uber Eats, will be available nationally by the end of April.
4. In resilient China, the future of coffee is bright
In China, with the number of new COVID-19 cases slowing, Starbucks shared that 90 percent of its stores are open across the country and the company continues to assess the ongoing impact.
“Partners in China have demonstrated Starbucks resiliency at its best,” Johnson said. “As we continue to reopen our stores, we are helping people in every community heal as they deal with the emotional toll this has taken on them. They, too, are adapting to the realities of what they have been through. And today, over 90 percent of Starbucks stores in China are open – under modified hours and conditions – all offering some degree of connection and all allowing partners in China to do what they love.”
Starbucks is committed to growth in China, including the aspiration to have 6,000 stores by 2022 and the construction of a $130 million Coffee Innovation Park outside of Shanghai with a roasting plant, warehouse and distribution center – the largest Starbucks manufacturing investment outside the U.S.
5. Strong coffee, strong business in fiscal year 2019
Johnson said fiscal year 2019 was one of great progress for the company, noting it as a year of many great successes and solid performance. Today, Starbucks has grown to more than 32,000 stores worldwide, with over 400,000 partners serving 100 million customers a week.
Starbucks has the financial resources, strength and resilience to manage through this extraordinary time, guided by our Mission and Values, he said.
“We have a strong balance sheet, great partners, and the resolve to get through this and come out stronger because of it,” Johnson said.
And next year? Next year’s shareholder meeting will be a celebration of that.
“A year from now, the resilience we are demonstrating today will be rewarded with the excitement and optimism of the future,” Johnson said. “We will gather together and it will be a big show with thousands of people celebrating all that Starbucks stands for and looking to the future with an attitude of optimism knowing that Starbucks is resilient.”
Editor’s note: Forward Looking Statements
Certain statements contained herein are “forward-looking” statements within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “anticipate,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “remain,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements relating to: the strength, resilience and outlook of our operations, business and brand; increasing shareholder returns; our commitment to strengthen the specialty coffee industry and the long-term opportunity in China; our ability to grow our business in a sustainable and responsible way and our ability to leverage and grow digital experiences. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to: fluctuations in U.S. and international economies and currencies; our ability to preserve, grow and leverage our brands; the ability of our business partners and third-party providers to fulfill their responsibilities and commitments; potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling; potential negative effects of material breaches of our information technology systems to the extent we experience a material breach; material failures of our information technology systems; costs associated with, and the successful execution of, the company’s initiatives and plans, including the integration of the East China business and the successful expansion of our Global Coffee Alliance with Nestlé; our ability to obtain financing on acceptable terms; the acceptance of the company’s products by our customers and evolving consumer preferences and tastes; changes in the availability and cost of labor; the impact of competition; inherent risks of operating a global business; the prices and availability of coffee, dairy and other raw materials; the effect of legal proceedings; the disruption to our business related to COVID-19; the effects of changes in tax laws and related guidance and regulations that may be implemented and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended September 29, 2019 and of Starbucks Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2019. The company assumes no obligation to update any of these forward-looking statements.