Photo by Dan Shryock
Starbucks in December opened its first Reserve Roastery and Tasting Room. The Seattle facility will roast 1.4 million pounds of select small-lot beans its first year, supplying Starbucks Reserve stores nationwide.
Record first-quarter earnings, a newly appointed president and chief operating officer, a new roastery concept store and big expansion plans are keeping Starbucks investors smiling and competitors somewhat in awe.
New c.o.o. Kevin Johnson took the reins from Troy Alstead March 1. Alstead began an unpaid sabbatical after 23 years at the right hand of Howard Schultz, Starbucks chair and c.e.o.
“Kevin is joining… our strongest manage- ment team in the company’s 44-year history,” said Schultz. Johnson, a Starbucks board member and a potential successor to Schultz, was c.e.o. of Juniper Networks, a senior Microsoft executive for 16 years and headed the Bush Administration’s National Security Telecommunications Advisory Committee through 2013. He will lead the company’s global operations, manage the supply chain, IT and Starbuck’s digital platform.
A few days prior to the appointment Schultz announced quarterly revenue of $4.8 billion, up 13% over 2013 with comparable store sales up 5% around the globe and a 2% increase in store traffic. Analysts predict the company’s share price will climb to more than $100 in 2015.
Three other notables:
- Starbucks intends to increase its store count from 21,878 to 25,000 globally in the short term and to 30,000 during the next five years potentially doubling revenue. Store count grew 28% during the past five years. The company set a $30 billion revenue target.
- Nine million U.S. loyalty card members loaded $1.6 billion during the holiday period, up 17% from a year ago. Starbucks averages 7 million mobile transactions a week. Advanced mobile order and pay is proving popular in 150 Portland stores with increasing store visits, labor efficiency and spend. Starbucks will soon add 600 Northwest stores to the test.
- The company shipped 100 million K-Cups during December, putting it on track to top 1 billion in 2015 while increasing market share to 18% among the 70 brands and 500 varieties of licensed K-Cups. Packaged coffee sales climbed 28%. Channel sales totaled $443 million.