Starbucks CEO Howard Schultz on handing over the reins and creating the ‘Willy Wonka’ of coffee
Starbucks CEO Howard Schultz on handing over the reins and creating the ‘Willy Wonka’ of coffee
One of the world’s most recognizable of brands is currently in transition.
Starbucks founder Howard Schultz is stepping down as CEO and will give the reins to his right hand, Kevin Johnson — the president and chief operating officer at Starbucks.
Schultz, who will stay on as executive chairman, joined us to talk about the shift in power and his new focus at the company: rolling out a line of what you might call the Porsche, Lexus, or Mercedes of cafes, where a single cup might run $12.
On Starbucks’ venture into “fancy coffee”:
If you think about other companies as an example, BMW they’ve gone from a 3-Series all the way up to a 7. If you think about Porsche, they created an SUV. You think about Air Jordan inside Nike. We have an opportunity to create a super, ultra-premium brand experience inside Starbucks — new revenue source, new profit — that will shine a halo on the entire company.
On whether high-end coffee can be compared to pizza:
I mean, I wouldn’t use pizza because I think it’s too much of a commodity, but I understand the analogy. I think it’s not just the coffee, it’s the experience. As an example, they’re spending about 40 minutes, the average customer, inside the roaster because the experience is a cathedral of coffee. It is the Willy Wonka of coffee. You will not believe it when it opens on the corner of 9th and 15th in New York.
On whether we might be “coffee’d out” in America:
Well, not only are we not coffee’d out, but I think we’re living in an age right now where people are spending much more time, as you know, at home, on their screen, on their phone. There’s a longing, and even more so in the future, for human connection and a sense of community. Starbucks has been the third place between home and work, and we’re going to become even more relevant in the future.
On whether he might “breathe down” Johnson’s neck:
I think that question would be highly relevant if we did not know each other so well. And I think the currency between Kevin and I is mutual respect and trust. But I made it very clear to a large group of investors and all of Wall Street that Kevin Johnson is the CEO and has the last word. And I think I’ll be there to help and coach when and if he needs it.
On the belief that his involvement in social issues means he wants to run for office:
Well, my thoughts are that over the years, I viewed the opportunity to leverage Starbucks’ platform and scale for good. And I also felt that we are living in a time where the rules of engagement in terms of responsibility for a company had changed. So you’re right, we’ve taken on a number of issues that we believe are part of the fabric of our company. But that should not suggest that I’m interested in running for office. I’m only interested in doing everything I can to elevate the Starbucks brand and my responsibility.
Listen to our recent interview with incoming CEO Kevin Johnson here.
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