Starbucks Is Making a Major Change That Just May Alter the Way the World Drinks Coffee

After building a global coffee empire, Howard Schultz is at it again.

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BY Justin Bariso - 20 Mar 2017

PHOTO CREDIT: Getty Images

In just two weeks, Starbucks CEO Howard Schultz will step down from his post as CEO to focus on the company's premium brand, Starbucks Reserve.

As a fan of the company, I originally thought this was a horrible idea. I mean, the last time the man stepped down, the company slipped into a free fall until Schultz was forced to take the reins again in 2008. Since then, Schultz has brought his vision of "the third place," where people come between work and home, to fruition. And love it or hate it, he's built the world's largest coffeehouse in the process.

Now, Schultz is ready for a new challenge.

As head of Starbucks Reserve, Schultz's goal is to nurture consumers' desire for a new, premium coffee experience.

All of this began with a vision some eight years ago, when Schultz scribbled the words "The Willy Wonka of coffee" in his journal. In 2014, Starbucks opened a 15,000-square-foot mecca of coffee in Seattle, known as the Starbucks Reserve Roastery and Tasting Room. Here, top baristas roast special blends of coffee, and then brew them using a variety of methods.

Beware, though: The premium experience is accompanied by a premium price. One process of brewing involving a siphon costs $12--for a 12-ounce cup of coffee.

But the specialty coffee market continues to rise, and market research indicates that premium, high quality coffee is a fast-growing trend that's not likely to go away.

Starbucks has been pleased with sales at its original Seattle store, and now has plans to open 20 to 30 more Roasteries over time (with locations in New York, Shanghai, and Tokyo), as well as 1,000 smaller Reserve stores that are similar in look and feel (although without the on-site roasting).

Retail expert Bryan Pearson compares the luxury coffee market to "the craft cocktail lounge and its respected mixologists."

"To maintain its target customer base, the Roastery will have to transport them to a new caf plane--an opulent environment that can be justified as a personal indulgence," writes Pearson in an article for Forbes. "That justification is achieved by stimulating the senses in purely emotional ways...The location's atmosphere the--way it makes its visitors feel--must justify the higher price tag."

The man in charge is optimistic.

"This is the beginning of creating a new brand of rare and exotic coffees," explains Schultz, enthusiastically.

"Everything we've ever done to this point has led us here. This is the moment of the next generation of Starbucks."

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