Starbucks CEO has big plans for higher-end coffee shops
With its shops circling the globe, Starbucks CEO Howard Schultz is doubling down on the company’s commitment to court premium coffee drinkers with new store formats.
Schultz will shift his focus toward the higher-end roasteries that Starbucks is starting to open, as well as 500-plus shops aimed at selling the chain’s line of rare “reserve” coffees, according to a strategic plan outlined Monday.
A new business group called Siren Retail will oversee the initiatives, which include growing the Teavana tea business and building stand-alone stores for Princi, an Italian bakery chain Starbucks became an investor in this month.
In a letter sent to employees, Schultz emphasized the need for innovation and better customer experiences in the future.
“Going forward, I will intensify my focus on our overall longterm strategy and innovation,” he said, including opening more roasteries in “iconic cities.”
The announcement comes with a number of executive shake-ups that may signal an eventual departure for Schultz, 63, from the company he founded. While Schultz focuses on long-term projects such as the roastery expansion, President and Chief Operating Officer Kevin Johnson will head the senior leadership team and day-to-day business.
“Kevin and I will continue our daily collaborative relationship, calling upon our complementary skills to lead the company,” Schultz said.
“My faith and confidence in Kevin is unwavering.”
Cliff Burrows, group president for the U.S. and Americas, will become the head of the Siren Retail group. John Culver, group president for Starbucks Coffee China and Asia Pacific, will become group president of a new division called Starbucks Global Retail. The changes take effect Sept. 1.
Burrows will be tasked with differentiating the roasteries and reserve cafes enough not to jeopardize the company’s core business.
He also has the opportunity to make Starbucks a bigger competitive threat to artisanal local coffee joints and chains such as Peet’s Coffee & Tea, says Neil Saunders, CEO of retail research firm Conlumino.