How Starbucks Earned Big! Fifty years since it opened, how the store revolutionized that coffee

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When three 28-year-old men got together on March 30, 1971 to open a coffee shop in the American city of Seattle, the American idea of ​​a ‘cup of Joe’ was very different from what it is today.

After that, it was all too often a lukewarm, cloudy, brown liquid from a pan that had been on the burner for too long and served in a china mug or spongy foam cup in a choice of only three sizes: small, medium, or big.

The coffee company they named Starbucks changed all that. Using quality beans from a famous California roaster named Alfred Peet, and inspired by one of their managers’ forays into Italy’s espresso bars, it sparked a revolution and half a century later it is a global phenomenon.

That one outlet in Seattle, Washington, opened 50 years ago, has grown into an empire of 31,000 coffee bars in 80 countries employing 349,000 people.

Starbucks founders Zev Siegl, Jerry Baldwin and Gordon Bowker, outside the first Starbucks in Seattle in February 1979

Starbucks founders Zev Siegl, Jerry Baldwin and Gordon Bowker, outside the first Starbucks in Seattle in February 1979

Today, Starbucks sells four billion cups of coffee a year, and the days when your coffee choice was limited to ‘cup’ or ‘mug’ are long gone.

Indeed, nobody asks for a ‘coffee’ anymore. A barista wants to know if you want a latte, a cappuccino, an espresso or an Americano.

And it has long diversified into more and more exotic concoctions, from the iced white chocolate mocha and pumpkin spice latte to the cinnamon bun frappuccino and decaffeinated flat white oat milk.

A Starbucks ad once claimed, “If you take all of our base drinks, multiply them by the number of modifiers and customization options, you get over 87,000 combinations.”

Today, Starbucks sells four billion cups of coffee a year, and the days when your coffee choice was limited to ‘cup’ or ‘mug’ are long gone. Pictured: Seattle’s first Starbucks

Are you going to Starbucks with your baby? You can order a ‘babyccino’, a small portion of the froth from the top of the heated milk. A similar offering aimed at the dog market is known as a ‘puppuccino’.

Small, medium, or large aren’t your only options, either. The equivalent today is ‘tall’, ‘grande’ and ‘venti’, but in 2011 Starbucks introduced the ‘trenta’ size, a cup that can hold 31 fluid ounces (‘trenta’ is Italian for ’30’). Critics pointed out that this is larger than the average human stomach.

And the good news for Starbucks is that the average customer is so addicted to their brews that they visit a Starbucks six times a month. About one in five are such devoted fans that they come in 16 times a month.

No wonder Starbucks’ annual revenues are over $ 20 billion (£ 14.5 billion) today.

When three 28-year-old men came together on March 30, 1971 to open a coffee shop in the American city of Seattle, the American idea of ​​a ‘cup of Joe’ was very different from what it is today.

And like so many other nationalities around the world, we Brits woke up a long time ago and smelled the (Starbucks) coffee a long time ago. The company’s first UK office opened in 1998 on King’s Road in Chelsea.

At the time, the market leaders in this country were brands like Costa and Coffee Republic, but Starbucks didn’t mess around. It turned into a 56-branch chain overnight by buying the Seattle Coffee Company (which was based in the UK despite its name) and changing its outlets. Today it has more than 1,000 branches.

Critics say this massive expansion has been achieved at the expense of independent operators.

In 2008, Starbucks settled an antitrust case in its city of origin accusing it of handing out samples of its addictive sugary drinks to rival coffee shops and highly-armed landlords in order not to rent out space to competitors.

It has also been accused of using its resources to secure the best locations, driving up prices and forcing local ‘mom-and-pop’ businesses to settle on streets with fewer traffic. But the biggest controversy arose over the tax regulations.

Today, Starbucks sells four billion cups of coffee a year, and the days when your coffee choice was limited to ‘cup’ or ‘mug’ are long gone

In 2012, it was revealed that since opening the UK subsidiary in 1998, Starbucks had made over £ 3 billion in coffee sales and opened 735 outlets, but paid only £ 8.6 million in income tax.

This appears to have been made possible by eroding the UK company’s profitability by charging royalty payments for the use of its brand name and ‘business processes’, allocating part of its UK profits to its Dutch coffee roasting and Swiss trading divisions, and the smart arrangement of intercompany loans.

However, such controversies have little stunted growth. For many people, the culture developed by Starbucks is something they can’t live without, as the branches have become so much more than coffee shops. They have been described as the country’s second living room, meeting place and reading room.

In 2012, the company decided to underline the personal relationship it had with customers by introducing a policy of asking for your name so that the barista can write it on your cup.

This would be ‘part of our commitment to make your coffee experience as perfect as possible’. At a branch in London, however, it stumbled upon the British sense of humor – when the man at the front of the queue was asked his name, someone, like Captain Mainwaring in Dad’s Army, shouted, “Don’t tell him, Pike! ‘

Elsewhere that proved to be opposed to the policy were the CIA’s offices in Langley, Virginia. The headquarters of the US intelligence agency has its own branch of Starbucks, but strangely enough, customers weren’t too keen to pass on their name. So the staff don’t even ask.

And baristas draw the line on some requests. When a woman asked a Starbucks employee to write ‘It’s Over’ on a cup, they replied, ‘I’m not breaking up with your boyfriend for you, and I honestly don’t think a flat white will soften the blow. ‘

It’s all a world away from the day when Jerry Baldwin, Zev Siegl and Gordon Bowker, three ex-students from the University of San Francisco, opened their first store.

When choosing a name for their company, Bowker – who ran his own advertising agency – told his partners that words starting with ‘st’ were considered powerful. Someone remembered Starbuck, the first mate on the whaling ship in the Moby Dick novel, they added an ‘s’ and left.

For the first decade, Starbucks only sold coffee beans and the equipment to grind and serve them, rather than the actual drink. But in 1982 it started offering brewed coffee.

Two years later, after one of their managers, Howard Schultz, visited Milan and saw that drinking coffee was an inherent part of Italian life, they opened their first espresso bar.

In 1989, there were 46 Starbucks stores in Northwest America, and the company was roasting nearly 1,000 tons of coffee a year.

As the company grew and became more mainstream, the mermaid in the logo became more respectable. The original figure showed bare breasts and was seen by the company’s founders as a siren luring passers-by to their store. But in 1987, her hair was rearranged to cover the breasts, and in 1992, her belly button was hidden.

In 1999, the brand was so ubiquitous that the Brad Pitt movie Fight Club featured a Starbucks coffee cup in every scene. This was a nod from film director David Fincher to the fact that ‘when I first moved to LA in 1984, you couldn’t get a good cup of coffee to save your life. Then Starbucks came out, and it was such a great idea: good coffee. ‘

In 2014, Starbucks’ image was further polished by a heartwarming delivery to a drive-through store in St. Petersburg, Florida.

At 7am, a woman paid for her iced coffee and then – simply because she was in a good mood – asked to pay the driver behind her as well.

That person, hearing of their happiness, did the same for the driver behind them. The chain lasted all the way until 6pm, by which time 378 people had bought drinks for complete strangers. (Sadly, the 379th customer – an unnamed woman in a white Jeep Commander – declined to participate and the pay-it-forward day came to an end.)

Today, Starbucks is valued at $ 128 billion (£ 93 billion), but unfortunately for Jerry, Zev and Gordon, they sold out long before the big bucks came in.

The buyer was their former manager Howard Schultz. It was he who took it from a handful of sleepy Seattle stores to a global behemoth. While the founders together had $ 3.8 million (£ 2.8 million) in their pocket, he now has a net worth of $ 5.1 billion (£ 3.7 billion).