Starbucks Turns 40

New Starbucks Petites, a line of eight sweets is rolling out at stores now.

Starbucks is celebrating its 40th birthday this month, having opened its first store in Seattle on March 30, 1971.

The world’s largest coffee chain with 17,000 locations in 55 countries drew in close to $11 billion last year, just posted its most successful quarter results (first fiscal quarter of 2011) and aims to open 100 to 200 stores annually in the U.S. for the foreseeable future, while also expanding internationally, especially in Asia, USA Today reported.

As times change, Starbucks is evolving.

“Over the past 18 months, the company has transformed itself through reinvention. New store design. New products. Via (instant coffee line). Mobile payment. EGifting (on the company’s Facebook page.) We’re more relevant in social and digital media. Over the past 18 months, we’ve become more relevant to our core customer and younger audience. The maturation of the company has enabled this. These are the best of times for Starbucks,” Starbucks CEO Howard Schultz told USA Today.

The chain is removing the words “Starbucks Coffee” from the Starbucks mermaid mascot so the brand can expand further within grocery stores. Energy bars and grab-and-go products featuring the Starbucks logo might also find their way into grocery aisles soon. By the end of 2011, customers can expect to get rewards not only with Starbucks Cards in Starbucks stores, but also in grocery stores.

“There’s a strategic shift to create a significant number of products for the grocery channel that will rival the size and scope of our U.S. retail business. This new business will offset the ultimate slowdown in U.S. retail store growth,” Schultz said.

Currently the chain is rolling out new Starbucks Petites—a line of eight sweets, including Cake Pops (small cakes served on sticks), Whoopie Pies ( frosting sandwiched between fluffy cake pieces) and Mini Cupcakes.

The coffee giant has seeing improved food sales at its stores. Sales of food as a percentage of the chain’s revenue is the highest it’s been in the company’s history. “It’s about 20% of our volume today. Our biggest success has been oatmeal, which turned out to be a great category for us,” noted Schultz, who added the he feels the quality of the chain’s food has improved.

While Starbucks has been adding beer and wine sales to some stores, but don’t expect the chain to roll this out to all locations. “There’s no question it’s working at those locations. But our intention from day one was not to make this broad-based. This is part of our strategy to test things and stretch the envelope. Our intent is not for this to be pervasive,” Schultz noted.

Starbucks is also starting to eye tea. “We look at tea as a significant medicinal beverage and at the core of our health and wellness strategy. Our plans for tea will be quite significant,” Schultz said.

As for the next 40 years? “In 40 years, the core of our mission will still be about achieving that fragile balance between profitability and social conscience. Without the latter, the former is unsustainable,” Schultz said.


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