STiR coffee and tea magazine

Volume 4, Number 1

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12 STiR tea & coffee industry international Starbucks' Record Revenue and Big Expansion Plans Record first-quarter earnings, a newly appointed president and chief operating officer, a new roastery concept store and big expansion plans are keeping Starbucks investors smiling and competitors somewhat in awe. Starbucks in December opened its first Reserve Roastery and Tasting Room. The Seattle facility will roast 1.4 million pounds of select small-lot beans its first year, supplying Starbucks Reserve stores nationwide. Kevin Johnson, new Starbucks c.o.o. New c.o.o. Kevin Johnson took the reins from Troy Alstead March 1. Alstead began an unpaid sabbatical after 23 years at the right hand of Howard Schultz, Starbucks chair and c.e.o. "Kevin is joining… our strongest manage- ment team in the company's 44-year history," said Schultz. Johnson, a Starbucks board member and a potential successor to Schultz, was c.e.o. of Juniper Networks, a senior Microsoft executive for 16 years and headed the Bush Administra- tion's National Security Telecommunications Advisory Committee through 2013. He will lead the company's global operations, manage the supply chain, IT and Starbuck's digital platform. transactions a week. Advanced mobile order and pay is proving popular in 150 Portland stores with increasing store visits, labor efficiency and spend. Starbucks will soon add 600 Northwest stores to the test. • The company shipped 100 million K-Cups during December, putting it on track to top 1 billion in 2015 while increasing market share to 18% among the 70 brands and 500 varieties of licensed K-Cups. Packaged coffee sales climbed 28%. Channel sales totaled $443 million. A few days prior to the appointment Schultz announced quarterly revenue of $4.8 billion, up 13% over 2013 with comparable store sales up 5% around the globe and a 2% increase in store traffic. Analysts predict the company's share price will climb to more than $100 in 2015. Three other notables: • Starbucks intends to increase its store count from 21,878 to 25,000 globally in the short term and to 30,000 during the next five years potentially doubling revenue. Store count grew 28% during the past five years. The company set a $30 billion revenue target. • Nine million U.S. loyalty card members loaded $1.6 billion during the holiday period, up 17% from a year ago. Starbucks averages 7 million mobile US/Cuba Trade Thaw Coming? President Obama spoke of ending the trade embargo against Cuba in his state of the union speech, stating: "Our shift in Cuba policy has the potential to end a legacy of mistrust in our hemisphere; removes a phony excuse for restrictions in Cuba; stands up for democratic values; and extends the hand of friendship to the Cuban people. And this year, Congress should begin the work of ending the embargo." Many pundits have analyzed the probability of this happening as have many in the coffee trade. Thanksgiving Coffee of Fort Bragg, Calif., has advocated for just such a shift for 15 years. On their website,, Joan and Paul Katzeff outline the social justice and environmental reasons behind their position. While enthusiasm abounds that a conversation about this highly politic subject is happening, the embargo remains. The Bean Shop, a retailer in Perth, UK, recently removed Cuban coffee from its website after its customers were warned they were in violation of U.S. trade laws by merchant service provider Paypal. Learn more: NEWS In December STiR Tea & Coffee International visited the first Starbucks Reserve Roastery and Tasting Room in Seattle, a new chapter for retail and a major step toward premiumization of the coffee experience. The roastery is a state-of-the-art experience for coffee as theater. The 15,000 sq. ft. public showcase will supply coffee to 1,500 reserve shops in the U.S. and Canada. A second Reserve Roastery will open in Asia in 2016. Visit for a detailed report by Dan Shryock. Online Exclusive

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