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Starbucks unveils blueprint for profitable growth at annual shareholders meeting

DBR Staff Writer Published 24 March 2011

Starbucks, an international premium coffee roaster and retailer, has hosted its 20th annual shareholders’ meeting, during which the company reviewed a year of strong financial results and outlined the blueprint for continued success.

Starbucks chairman, president and ceo Howard Schultz has honored the company's 40-year history of providing exceptional coffee, customer experience, commitment to its partners (employees) and dedication to operating as a responsible corporate citizen.

"Going forward, we will continue to focus on what made us a different kind of company, one that balances profitability and social conscience while providing exceptional shareholder value," Schultz added.

The management team also reaffirmed growth plans for a new, evolved business. The focus remains on building a global consumer company by harnessing a portfolio of brands with a business model, combining a global retail footprint with a significant Consumer Products (CPG) business, and leveraging direct customer engagement that drives growth across all channels globally.

At the meeting, Starbucks reiterated its commitment to delivering the coffee in every format and through every channel. The company highlighted the successful launch of its Starbucks VIA Ready Brew platform and its recent announcements of strategic relationships with Green Mountain Coffee Roasters.

Starbucks global consumer products and foodservice president Jeff Hansberry said the single-cup segment is already a $1.6bn segment that represents a significant growth engine for the entire US coffee category.

"We believe that over time we can generate K-Cup portion pack system sales in excess of $1bn across all channels," Hansberry added.

Starbucks also provided details of its previously announced relationship with Courtesy Products, under which Starbucks and Courtesy will bring Starbucks coffee to 500,000 luxury and premium hotel rooms in the US.

It will also offer an on-demand, single-cup brewing system featuring Starbucks and Seattle's Best Coffee ground coffee and Tazo teas for sale in multiple channels exclusively through the Starbucks Global Consumer Products group.

The company also announced a 10-year extension to its exclusive strategic agreement with Autogrill's HMSHost, one of Starbucks first licensee partners. Under this agreement, HMSHost will continue to build and operate Starbucks locations in airports and motorway travel plazas across the US.

Currently, Autogrill's HMSHost operates more than 360 Starbucks locations in airports, on motorways and in railway stations in North America and Europe.

The continuance of these strategic relationships will foster further growth opportunities as well as the development of innovative store concepts to serve the global traveler.

Recently, the company revealed plans to enter the India market, and continued successful growth in China where the company expects to have over 1,500 stores by 2015, Starbucks is poised to ramp up its burgeoning international business through disciplined store growth, improved operations, targeted innovation, local relevance in product and store design, and one-voice marketing.

Starbucks exited fiscal 2010 and entered fiscal 2011 with record-setting financial results driven by the return of top line growth and continued operational efficiencies that resulted in dramatic margin and earnings acceleration throughout the year.

The company reiterated diversified opportunities for growth in a number of platforms including store segmentation and innovation in store designs, development of products such as Starbucks VIA, growth in brands such as Seattle's Best Coffee and expansion of channels of distribution beyond the Starbucks stores, which provided opportunities to reach customers during coffee occasions.

The company's involvement with social media, leadership in loyalty and mobile through its Starbucks Card and My Starbucks Rewards programs were featured during the onstage presentation.

It also announced four new content partners to the in-store Starbucks Digital Network, all of which are offering free access to their subscription-level content to Starbucks customers.