Starbucks reaffirmed its leadership position and growth agenda across its retail, emerging brands and CPG channels at its biennial Investor Conference.
“Starbucks business and brand have never been healthier, and as a company we have never been better positioned to execute against our global, multi-channel growth agenda,” said Howard Schultz, Starbucks chairman, president and chief executive officer at the company’s 2012 Investor Conference. “Starbucks will have more than 20,000 retail stores on six continents by 2014 and more than 200,000 points of global consumer packaged goods (CPG) distribution by 2015. I am personally committed to seeing Starbucks deliver the innovation, execution and elevated customer experience necessary to achieve both these goals and remain one of the world’s most trusted and admired consumer brands.”
Cliff Burrows, president, Starbucks Americas and U.S., announced that his region planned to add more than 3,000 net new stores, and renovate thousands more stores, over the next five years. At least half of the new stores are expected to be in the strong, rapidly growing U.S. market where revenue grew by 9 percent in fiscal 2012. Burrows also announced plans to leverage the recently completed Evolution Fresh and La Boulange acquisitions – and to increase sales and drive customer frequency throughout the day – by making La Boulange® products available in more than 2,500 U.S. company-operated Starbucks stores and making Evolution Fresh™ juices available in more than 5,000 U.S. company-operated stores by the end of 2013.
Teavana Acquisition to Globally Transform Tea Industry
Starbucks reiterated plans to vault itself into a leadership position of the $40 billion global tea market with its intended acquisition of Teavana, which the company previously announced on November 14, 2012. The company shared for the first time that it plans over time to offer handcrafted Teavana® tea beverages at Teavana mall and neighborhood stores and eventually at Starbucks stores. Once the acquisition is complete, Starbucks and Teavana will together jumpstart the next wave of growth in the tea category, leveraging Starbucks core competencies in handcrafted beverage, real estate and design and integrating these with Teavana’s world-class tea authority, merchandising and best-in-class retail store unit economics. Powered by Starbucks existing infrastructure, Starbucks plans to continue to grow and extend Teavana’s already-successful 300 mall-based stores as well as add a high-profile neighborhood store concept that will accelerate Teavana’s domestic and global footprint.
Digital and Loyalty Platforms Transforming Customer Connections Beyond Retail
Beyond retail store and CPG channel developments, Starbucks described how its digital and loyalty platforms and initiatives are transforming the way it connects with customers, strengthening brand relevance, delivering greater value and convenience to consumers - and producing greater profits for shareholders. Chief digital officer Adam Brotman described how the company’s social, web, mobile, loyalty and card assets differentiate Starbucks from any other retailer and combine to directly drive growth across the company’s business and around the world. Brotman announced that Starbucks cards are now used in approximately 25 percent of the company’s U.S. transactions and that the amount of dollars loaded on Starbucks cards increased by more than 20 percent last year. He also expects the company’s mobile payment platform to account for 10 percent of payments in Starbucks U.S. stores by the end of fiscal 2013.