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Howard Schultz: A Profile

MONDAY 3rd June 2002
The murmurs of upmarket chat, the clicks of a neighbour's laptop, the buzz of a mobile phone, and all around the aroma of roasting coffee beans. It's the 21st century and if you're one of Howard Schultz's coffee converts, you're no doubt sitting in a Starbucks. Coffee with fries?

Company leader Schultz has taken coffee culture from the streets of Europe and put it on the corner of just about every block in the developed world. Starbucks serves 15 million customers a week, in almost 4,000 stores. In the McDonalds age, is this just coffee with fries?

Schultz says not. The leader of this billion-dollar retail operation maintains that his primary goals have been to "serve a great cup of coffee, and build a company with soul". While some Epicurean purists doubt the success of the former, their criticism may be the result of sour grapes, not bitter beans.

"A company in which people were respected"

Certainly, Schultz has succeeded in providing employees with health care and stock-option plans. Facing accusations of globalisation, Schultz cites his literacy programs and Earth Day clean-ups. And the Starbucks environmental mission statement includes a commitment to organic crops, safe processing facilities and the encouragement of farming communities.

Such worthy ideals have no doubt been inspired by Schultz's childhood experience of his father's life of ill-paid jobs, without insurance or compensation. With Starbucks, Schultz wanted to create "the kind of company that my father never got a chance to work for, in which people were respected".

From coffee-makers to coffee millions

Born in 1952 and raised on a Brooklyn housing project, Schultz got to university on a football scholarship and worked his way up to domestic manager for Hammarplast, a coffee-maker supplier. When he noticed how many of his machines were going to one coffee bean store in Seattle, he decided to investigate. The store was Starbucks and, impressed by the shop-owners' dedication to coffee connoisseurship, Schultz jumped ship and started to market the original Starbucks chain of four.

A year later, the nascent entrepreneur was inspired by what he saw in Italy. The country's plethora of coffee-houses were part of the national social structure, a place for discourse and, of course, fashionable display. The original Starbucks founders were reluctant to expand into the "restaurant" business, but Schultz eventually bought the company for $3.8million.

"Brands are fragile"

More recently, Schultz indulged his passion for basketball by buying the Seattle Supersonics for $250 million. His hunch was obviously a good one, and now he's applying his same instincts to the provision of network access in his stores.

Despite previous e-commerce failures and a lackadaisical attitude to technology, Schultz believes that high-speed wireless systems will make his stores more inviting for customers. The owner of one of the world's most recognisable logos will not rest on his laurels while, as he realises, "brands are fragile".

In the cultural Petri dish of this particular corner of America, this is all sounding very familiar. But faced with comparisons of a fellow Seattle marketing master, Howard Schultz simply plays up his product. He says, "Bill Gates can't make a latte."