On March 18, 2015, Starbucks Corporation kicked off its annual shareholder meeting with company leaders outlining key strategies the coffee giant is deploying to reach a targeted market cap of $100 billion.
Several strategies on the development side were highlighted:
- Grow the global store portfolio. John Culver, group president, China/Asia Pacific (CAP) and channel development, said that over the next 5 years Starbucks will grow from 22,000 stores to more than 30,000 stores around the world. In the CAP region, the company recently opened its 5,000th store and over the next 5 years plans to double its footprint there to 10,000 stores across 15 markets. He added that in this period, more than half of Starbucks' new store growth globally will come from this region, led by Japan and China. The company now has 1,100 stores in Japan. China, its fastest growing global market, has 1,600 and is slated for 3,400 stores within the next five years.
- Tap new formats, more occasions. Cliff Burrows, group president, the Americas and Teavana, reported a unit count of just over 14,000 across the Americas, a number expected to grow by 3,500 over the next five years. "The store experience is a direct reflection of how our customers are attracted to all the brand has to offer, including products as well as speed and convenience in traditional stand-alone stores as well as our drive-thru stores, which account for more than 40 percent of U.S company-operated stores," he said. "We will be introducing a new smaller footprint with a select range of products: take-away only, an express format focused on meeting the demands of customers in urban locations during the morning peak. This new format will open up new doors in places we haven't been able to go before." The first express format stores are slated to open in New York next quarter and four more are planned by the end of the year. Food sales, too, are targeted to increase from the current 18 percent of sales to 25 percent, Burrows said. That increase will come from stronger development of breakfast, lunch and snack dayparts, as well as the new Starbucks Evening program, which features small plates, wine and beer.
The new Mobile Order & Pay feature is on track for national rollout.
- Engage digitally. Adam Brotman, Starbucks' chief digital officer, noted that the company has more than 14 million active users of its mobile apps and processes approximately 8 million mobile payment transactions per week. "This translates to roughly 18 percent of all transactions in our stores, which is more than half of every card transaction — all done through mobile," he said. Starbucks' new Mobile Order & Pay, a feature rolled out recently in Portland, Ore., has been expanded to 600 stores in the Pacific Northwest, Brotman added, and is on track for national rollout later this year. The feature will soon be offered in Canada and the U.K., as well.
- Deliver. Brotman said that later this year Starbucks will partner with on-demand delivery provider Postmates to deliver in its Seattle market. The company is also testing a second delivery format, dubbed Green Apron. "In dense, urban environments, like office buildings, we believe we've cracked the code on another way to bring Starbucks to our customers, and that's to have baristas on hand to provide an exclusive service within an office building. This will be great in places like New York City," he said. "That's exactly where we plan on launching later this year."