Starbucks’ Schultz for president?
The man who grew Starbucks from a small roastery dismisses thoughts of the White House, but people are still talking. Iain Withers reports.
Howard Schultz, the poor Brooklyn kid turned coffee billionaire tipped to run for US president, is making himself a black Americano at a new Starbucks opening halfway up a Costa Rican volcano.
The rangy entrepreneur behind the world’s largest coffee chain has stepped behind the counter to try out the gleaming new Italian coffee machine at his 28,000th outlet.
This store is a mix of black metal and polished wood overlooking a waterfall in Costa Rica’s lush Central Valley.
It is the centrepiece of a bigger visitor centre opening at Starbucks’ only directly owned plantation, the Hacienda Alsacia.
All around Schultz is a hubbub of activity as wide-eyed young locals and preened American executives put the finishing touches in place for the launch event the next day.
He settles at a balcony table above rows upon rows of vibrant green coffee plants.
Starbucks is a very different beast to the tiny Seattle coffee roasting firm he joined as marketing boss in 1982, aged 28.
‘‘When I joined Starbucks the dream was to open in Portland, Oregon. That’s like going from London to Manchester. This would have been beyond my imagination. We were just trying to pay the rent.’’
Today Schultz is one of America’s most famous entrepreneurs. After taking over at Starbucks, he transformed it into a global phenomenon worth over US$80 billion (NZ$108b) that is still expanding fast.
Even China – the home of tea – has fallen for frothy cappuccinos and frappuccinos. It is Starbucks’ biggest growth market, with over 3,200 stores, opening at a rate of one a day.
Schultz is all easy charm and idealism, as well-known for his outspoken liberal views on politics and social issues as he is for his extraordinary business success.
He does little to play down speculation he could make a tilt for the White House one day, perhaps for the Democrats.
Schultz’s story often gets billed as the American dream come true.
He grew up in a low-income public housing project in Brooklyn, New York, and got to college by winning a sport scholarship as a talented American football quarterback.
After graduating he excelled in marketing roles before getting his big break at Starbucks.
He is now the company’s executive chairman, after stepping back from the chief executive role for a second time last July.
Schultz tried to drop the day-today running of Starbucks once before, in 2000, but was forced back eight years later after a slide in the firm’s fortunes.
Turnaround job done, he doesn’t think he’ll have to step back into the breach again.
‘‘No, that’s it,’’ he says. ‘‘I’m happy with what I’m doing and feel like I’m doing important work. I’m trying to create the vision for the future of the company. I won’t be here for ever.’’
Schultz’s work is focused on two areas: rolling out Starbucks’ new ‘‘premium’’ roastery and reserve stores, and what he calls the company’s ‘‘social impact’’ work, including programmes to protect the environment and help disadvantaged young Americans.
The roastery concept he is overseeing is part of Starbucks’ answer to the explosion of independent cafes popping up in cities around the world.
The first two have been launched in Seattle and Shanghai.
Starbucks’ market share is under attack from all quarters. Not only has it got independents to contend with, fast food chains like McDonald’s are also pushing hard into the coffee market.
Yet Schultz is dismissive of any suggestion the world is reaching ‘‘peak coffee’’. ‘‘There’s still a lot of room for growth,’’ he says. ‘‘I also wonder how sustainable it will be for a lot of these independents around the world.’’
The company is also generating much of its growth from cold beverages like frappuccinos. Yet won’t the quality of Starbucks’ coffee have to improve to compete?
‘‘I’ve been answering this question for 40 years,’’ he says. ‘‘Here’s the answer – you may not be a fan of Guinness beer, but you know exactly what it is. And it’s not for everyone.
‘‘But it has a position in the marketplace that is very respected and it’s not all things for all people. We don’t apologise for it, we love it. And 100 million customers last week – 100 million – said they like it too.’’
Schultz bristles at any accusations of Starbucks acting unethically. He says it is one of the largest buyers of Fairtrade coffee in the world and has reams of compliance rules designed to ensure it protects both small suppliers and the environment.
Its outreach programmes, and those run by the Schultz Family Foundation overseen by his wife Sheri, include helping some of the 6 million young Americans who are out of work or training, free college tuition for its US baristas, and hiring 10,000 refugees by 2022.
However, groups that scrutinise companies’ moral credentials, such as Britain’s Ethical Consumer database, say Starbucks must do more.
It says the company should lessen its environmental impact further and ensure more comprehensive auditing of its sprawling supply chain to check small suppliers uphold its standards.
Schultz has been one of the American business community’s most outspoken critics of Donald Trump, from his tax cuts to his immigration policies.
But he is reluctant to talk politics today. He answers two variations of the question of whether he’ll run for president with the non-denial: ‘‘I’m still working at Starbucks.’’
Last month he was asked by Fox Business whether he was planning to run in 2020 and he said ‘‘No, I’m not’’, so perhaps no move is imminent.
With the interview drawing to a close, I ask him what people underestimate about him. He is uncharacteristically lost for words.
‘‘I think my growing concern for humanity. That’s not something I talk about a great deal but I’m very concerned.
‘‘I think it’s a very volatile time in the world. I think there’s a void of leadership and most importantly of what is true. We need authentic leadership.
‘‘The leader I admire most in the world today is the Pope – and I’m Jewish. That’s because he’s a true servant leader. And this is what we need right now, we need servant leaders, we need leaders who are servants of the people.
‘‘In the history of America, we have had extraordinary presidents and if you think about what’s the thread of who they were and what they did, they were servants of the people.’’
Which presidents has he admired most? ‘‘The president I admired the most was Abraham Lincoln. But the person I admired most who was not president was Bobby Kennedy.’’
Does he not still sound like a politician in waiting? ‘‘I still work at Starbucks,’’ Schultz says with a smile.