Big shot of the week
HOWARD SCHULTZ, 64 EXECUTIVE CHAIRMAN, STARBUCKS
Adouble short non-fat latte, threequarters full. That’s the morning coffee order of Starbucks’ outgoing executive chairman Howard Schultz.
What it gets you, lord only knows. As well as revolutionising the coffee business, Schultz’s ubiquitous cafes have created an indecipherable vernacular all of its own.
All I can tell you is that he gets through five of them a day.
Schultz is departing 30 years since acquiring the famous Seattle company, which he has converted from a mundane, single branch coffee bean store into one of the world’s most famous brands, churning out more than £20bn in revenue.
His next challenge is a tilt at the White House on the democratic ticket. Tall and slim with a painfully earnest expression stretched across his angular features, he has the right look for the top job, and with £2.5bn in his back pocket, certainly the wonga. BuT dear me, the guy rabbits on. Starbucks is ‘ an immersive, ultrapremium, coffee-forward experience,’ anyone? or how about this: ‘We’re not in the business of filling bellies; we’re in the business of filling souls.’ If there were olympic medals for corporate claptrap, he’d be rivalling Carl lewis.
There’s no denying he has a compelling backstory. born and raised on a dirt-poor housing estate in brooklyn, his father was a truck driver. At the age of seven, little Howie came home to find his dad splayed out on the sofa with a broken leg. With no health insurance, he lost his job. Watching his old man struggle over subsequent years left an indelible print on the young man’s brain.
After three years working for Xerox, he began selling home appliances for a Swedish firm called Hammarplast. When he discovered a company in America’s north-west was buying more of their coffee filters than anywhere else, curiosity forced him to buy a plane ticket and pay them a visit.
Starbucks, which took its name from Captain Ahab’s dependable first mate in Moby dick, was the original hipster joint. It was 1981, and coffee wasn’t yet much of a thing in the uS. The niche store had been set up by three entrepreneurs to sell roasted coffee beans. Schultz, for reasons known only to himself, fell in love with it. A year later he persuaded them to take him on as their head of marketing.
It was a recon trip to Milan which really set him off.
He became entranced by the city’s coffee culture, where cafes were not only sociable places but theatrical ones where busy baristas would pour espressos and cappuccinos with one hand, while steaming milk with another.
He returned to Seattle with grand plans for a chain of coffee bars where Americans would chat while enjoying good coffee. The Starbucks nerds didn’t get it. They weren’t interested in going into the restaurant business and, besides, they had no appetite for expansion. FruSTrATed,
Schultz sloped off and, with the help of creditors, set up his own cafe called Il Giornale, named after a Milanese newspaper. It was risky. Howard’s wife Sheri was pregnant (they have two sons) but the place was a hit, clocking up 300 visitors on the first day.
A year later, he discovered the Starbucks guys were selling. They put a price of $4m on their business, which Schultz persuaded the bank (and a then unknown bill Gates) to lend him. Within five years he made good on his promise to have 125 branches across America.
When he floated the company in 1992, there were 146. Today, there are more than 26,000 worldwide.
His critics feel his numerous outlets have saturated the market, putting independent baristas out of business. In 2012, it emerged Starbucks had paid just £8.6m uK corporation tax over 14 years. Grrr.
Whenever Schultz feels embattled, he escapes his Seattle mansion and visits that first Starbucks he fell in love with all those years back, which remains unchanged. ‘I go there at 4.15am sometimes, just by myself. It’s the right place whenever I need centring,’ says oddball Howard. oo-er. Should the democrats decide he’s their man, I fear the donald could have some fun with this one.