Company Forecasts Continued Strong Growth and
Plans to Launch Mobile Order & Pay and Delivery in the U.S.;
Identifies High-Value Opportunities in China, India, Japan and
Brazil
Projects Revenues to Approach $30 Billion in
FY2019, up from $16 Billion in FY2014
Announces Transformational Innovations to
Extend Starbucks Global Leadership in Coffee, Tea, Retail Store and
Partner Experience
Elevates and Redefines the Premium Coffee
Experience with the Debut of the World’s First, Immersive Starbucks
Reserve® Roastery and Tasting Room in Seattle
Starbucks Coffee Company (NASDAQ: SBUX) chairman, president and
chief executive officer Howard Schultz and other company leaders
will detail Starbucks five-year strategic growth plan today at its
biennial Investor Day, hosted at the company’s Support Center in
Seattle for the first time in a decade.
“The seismic shift in consumer behavior underway presents
tremendous opportunity for businesses the world over that are
prepared and positioned to seize it,” Schultz said. “Over the next
five years, Starbucks will continue to lean into this new era by
innovating in transformational ways across coffee, tea and retail,
elevating our customer and partner experiences, continuing to
extend our leadership position in digital and mobile technologies,
and unlocking new markets, channels and formats around the world.
Investing in our coffee, our people and the communities we serve
will remain at our core as we continue to redefine the role and
responsibility of a public company in today’s disruptive global
consumer, economic and retail environments.”
“Starbucks business, operations and growth trajectory around the
world have never been stronger, and we are more confident than ever
in our ability to continue to drive significant growth and meet our
long term financial targets,” said Troy Alstead, Starbucks chief
operating officer. “We have more customers visiting more stores
more frequently, both in the U.S. and around the world, than at any
time in our history. And we expect both the number of customers
visiting our stores and the amount they spend with us to accelerate
in the years ahead. With a robust pipeline of mobile commerce
innovations that will drive transactions and unprecedented speed of
service, Starbucks is ushering in a new era of customer
convenience. We believe the runway of opportunity for Starbucks
inside and outside of our stores is both vast and unmatched by any
other retailer on the planet.”
Coffee and Tea Leadership
Starbucks Investor Day is being hosted on the eve of the grand
opening of the first-of-its-kind Starbucks Reserve® Roastery and
Tasting Room. Located on Pike Street in Seattle just a few blocks
from the company’s iconic first retail store, the 15,000 square
foot Starbucks Reserve® Roastery and Tasting Room is an interactive
coffee and dining venue that redefines delivery of an immersive
brand experience. Moreover, the additional small batch roasting
capacity afforded by the new Roastery will enable Starbucks to
expand availability of its super-premium, small-lot Starbucks
Reserve® Coffee to 1,500 locations globally, and to support the
launch of the Starbucks Reserve® brand and the opening of the first
100 dedicated Starbucks Reserve stores.
Building on Starbucks 43-year tea heritage and its acquisition
of Teavana two years ago, Starbucks is reinventing the $109 billion
global tea category, just as it did the coffee category more than
40 years ago. The new Teavana® store in Seattle’s Pacific Place and
the new Teavana® Tea Bar at Broadway & 9th in New York City are
performing ahead of plan, and Teavana will continue to expand and
to bring its super-premium loose leaf teas, handcrafted beverages
and exclusive food offerings to carefully targeted markets both in
the U.S. and abroad.
In addition, building on the successful launch of handcrafted
Teavana® Shaken Iced Tea through Starbucks® stores earlier this
year and the innovative partnership with Oprah Winfrey around
Teavana® Oprah Chai Tea, Teavana will continue to grow its presence
in Starbucks® retail stores with sachets, innovative iced teas and
expansion of the Chai tea platform.
Day Part and Store Format Diversification
Starbucks® food program continues to resonate strongly with
consumers across all day parts, and to drive both traffic and
ticket growth in the U.S. and around the world. The company expects
continued top and bottom-line growth in its food platform as it
elevates and expands its offering of savory, locally relevant food
offerings around the world. In addition, the company announced
plans to double its U.S. food revenue to over $4 billion over the
next five years.
By the end of FY2019, 20-25% of Starbucks® stores in the U.S.
will offer the Starbucks Evenings experience, adding approximately
$1 billion in revenue. The expansion of Starbucks Evenings,
Starbucks Reserve only stores, micro and express store formats, new
drive-thrus and mobile trucks are just a few of the innovations
customers will see beginning in 2015.
Mobile Commerce Momentum and Innovation Continues with the
Launch of Mobile Order & Pay
Starbucks is the global market leader in mobile payment. With
more than eight million loyalty members, seven million mobile
payment transactions each week and more than $4 billion loaded onto
prepaid Starbucks Cards in North America in the past year alone,
Starbucks offers the largest and most robust mobile ecosystem of
any retailer in the world.
Starbucks is once again raising the bar for mobile commerce
innovation with the launch of “Mobile Order & Pay” and plans
for food and beverage delivery. Starbucks introduced its
fully-integrated Mobile Order & Pay platform – representing the
most meaningful enhancement to the customer ordering experience
since the company first introduced drive-thrus in 1994 – to
customers in the Portland, Oregon area yesterday. Now, Mobile Order
& Pay will allow customers to place orders in advance of their
visit, and to pick up their ready order at their preferred
Starbucks® store – improving speed of service, enhancing customer
loyalty and the customer experience, streamlining store operations
and further extending Starbucks leadership position in mobile
commerce and customer loyalty. The Portland launch will be followed
by a national rollout of Mobile Order & Pay in 2015.
“Of all the new traffic-driving initiatives for the company,
Mobile Order & Pay is at the top of that list and we are
confident that it will be game-changing for our customers and our
business,” said Adam Brotman, Starbucks chief digital officer. “We
have designed the full mobile ordering experience – from the app
itself, to the pick-up of the food and beverages, to the engagement
with the baristas in our stores – to be a seamless and natural
extension of the existing Starbucks Experience. We believe
that the addition of Mobile Order & Pay into what is already
one of the most widely used apps in the country will encourage
customers to explore even more of our menu, will attract new
customers to Starbucks, and will encourage
incremental occasions to visit our stores.”
Furthermore, the national rollout of Mobile Order & Pay will
lay the foundation for Starbucks launch of food and beverage
delivery in select metropolitan areas later in the year. Inclusion
of the delivery option furthers the company’s goal of providing
convenience and the complete Starbucks Experience to customers
however, whenever and wherever they want it – even if they are
unable to visit a Starbucks® retail location.
The success of Starbucks mobile payment and loyalty programs
will also allow the company to bring to the table the constituent
pieces necessary to build a consumer proposition for a mobile
payment network with retailers outside of the Starbucks® store
footprint in fiscal year 2016. This platform – in which customers
would earn Stars by using a stored value account, much as they do
at Starbucks today – would create opportunities for other retailers
to reward their most loyal customers, also benefiting Starbucks by
creating incremental traffic opportunities.
Global and Channel Expansion
Starbucks China and Asia-Pacific region represent enormous,
immediate, high-value opportunities for the company, and Starbucks
today announced plans to double its store count in China – to over
3,000 stores – by 2019. When completed in the second quarter of
2015, Starbucks acquisition of Starbucks Japan – the company’s
first international market outside of North America and with more
than 1,000 stores its second largest market overall in retail store
sales – will position Starbucks to further accelerate growth in the
dynamic, rapidly-growing CAP region.
Starbucks is the industry leader in premium single serve,
premium packaged roast and ground coffee, and Ready-to-Drink
products served outside the company’s retail stores and is ideally
positioned to grow its share of these markets both in the U.S. and
globally. At Investor Day 2014, company leaders will share that
over the next five years Starbucks Channel Development segment will
grow its revenue by 60%, nearly double its operating income, and
more than double its RTD business outside of the U.S. with a
specific focus on unlocking untapped opportunities across the
company’s China and Asia-Pacific region.
Financial and Operating Performance through the Lens of
Humanity
As Starbucks accelerates the growth across its business and
around the world it will continue to balance industry-leading
performance with its core mission and values. The company’s
commitment to its values, its partners (employees) and the
communities it serves was demonstrated through several leadership
initiatives over the past year, including:
- Starbucks commitment to hire at least
10,000 veterans and military spouses by 2018 and its partnership
with HBO and Chase to host the historic Concert For Valor. The
Concert For Valor saluted America’s veterans and was held on the
National Mall in Washington, D.C. on Veterans Day. The concert was
attended by hundreds of thousands – with more than one million
viewing the event live and on demand, remotely. In its first year,
Starbucks has already placed more than 1,000 veterans and active
duty military spouses into roles that leverage their skills,
dedication, discipline and leadership and the company announced
plans to double that number in 2015. In November, Schultz
co-authored For Love of Country: What Our Veterans Can Teach Us
About Citizenship, Heroism and Sacrifice. The book, from which
Starbucks proceeds are being devoted to veterans' service
organizations, has already received numerous accolades including
ranking as one of The Wall Street Journal’s top five best-selling
books.
- Last summer Starbucks announced the
creation of Starbucks College Achievement Plan, a first-of-its-kind
partnership with Arizona State University (ASU) that makes it
possible for eligible Starbucks partners to finish a bachelor’s
degree with full tuition coverage for their junior and senior years
through ASU’s top-ranked online degree program. More than 1,000
partners have enrolled in the first Fall session and thousands more
have started the application process.
To learn more about Starbucks 2014 Investor Day, visit Starbucks
Investor Relations website. For news updates and images from the
event, visit the Starbucks Newsroom.
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with stores around the globe, the company is the premier roaster
and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we
bring the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in
our stores or online at Starbucks.com.
Forward-Looking Statements
Certain statements contained herein are “forward-looking
statements” within the meaning of the applicable securities laws
and regulations. Generally, these statements can be identified by
the use of words such as “anticipate,” “expect,” “believe,”
“could,” “estimate,” “feel,” “forecast,” “intend,” “may,” “plan,” “
potential,” “project,” “should,” “will,” “would,” and similar
expressions intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. These statements are based upon information
available to Starbucks as of the date hereof, and Starbucks actual
results or performance could different materially from those stated
or implied due to risks and uncertainties associated with its
business. These risks and uncertainties include, but are not
limited to, costs associated with, and the successful execution of,
the company’s initiatives and plans, the acceptance of the
company’s products by our customers, fluctuations in U.S. and
international economies and currencies, our ability to preserve,
grow and leverage our brands, potential negative effects of
material breaches of our information technology systems if any were
to occur, the impact of competition, coffee, dairy and other raw
material prices and availability, the effect of legal proceedings,
and other risks detailed in the company filings with the Securities
and Exchange Commission, including the “Risk Factors” section of
the Starbucks Annual Report on Form 10-K for the fiscal year ended
September 28, 2014. The company assumes no obligation to update any
of these forward-looking statements.
Starbucks Coffee CompanyMedia Relations:Alisha Damodaran,
+1-206-318-7100press@starbucks.comorInvestor Relations:JoAnn
DeGrande, +1-206-318-7118investorrelations@starbucks.com
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