Starbucks CEO leaves post to focus on Reserve craft coffee brand, ushering in new wave of ‘retail innovation’

By Mary Ellen Shoup

- Last updated on GMT

Schultz made it clear he will not be leaving the company, instead he will devote his time to developing & expanding the Starbucks Reserve brand
Schultz made it clear he will not be leaving the company, instead he will devote his time to developing & expanding the Starbucks Reserve brand

Related tags Starbucks

Starbucks CEO, Howard Schultz, will be stepping down from his post as head of the company; and the global coffee chain’s current president and COO, Kevin Johnson, will step in as CEO. 

The leadership change will be effective April 3, 2017. 

Schultz is making way for current president and COO, Kevin Johnson, to take the helm as CEO in April 2017 and who has been on Starbucks' board of directors since 2009. 

Schultz joined Starbucks in 1982 as director of operations and marketing, when it had only four stores, and in 1983 decided to add espresso to store menus after returning from a trip to Italy.

Staying ahead of the curve

Since then, Starbucks’ success has relied on the company’s leaders’ ability to sense seismic shifts in consumer behavior and adapt to them before their competitors such as the transition away from brick and mortar stores to online retail.

“Despite the shift, Starbucks has been able to consistently outperform the retail industry because we invested way ahead of the curve to create world-class mobile, loyalty and digital capabilities that enable us to provide our customers with an increasingly elevated Starbucks experience to our customers,”​ Schultz said during a media conference call on Dec. 1.

Development of Starbucks Reserve brand

Schultz will continue his role as chairman of Starbucks, which he has held since 2000, but will instead focus on expanding the design and development of Starbucks Reserve Roasteries and Tasting Rooms, as well strengthening the company’s social responsibility initiatives.

Aimed at competing with the rise of premium, hand crafted retail coffee outlets​ like Intelligentsia and Stumptown, Starbucks Reserve is a retail format that will offer “rare, small-batch coffee” ​roasted in Seattle, the company’s founding city.

“Roasteries, Reserve Stores and Reserve bars that will be customer destination venues. They will broaden, deepen and elevate our customer experience, and represent an unprecedented new global growth opportunity for the company,”​ Schultz said during a conference call.

“I am personally as passionate about developing the Reserve brand, and opening more Roasteries, as I was about opening our first espresso bar more than 30 years ago in Seattle.

“The Roastery has taught us and demonstrated that we can create customized, handcrafted beverages for our customers, using cutting-edge brewing methods and profitably deliver them at scale.”

Schultz said Starbucks will open at least 20 Roasteries around the world, six by the end of calendar 2019.

The Reserve brand will also eventually make its way into thousands of existing Starbucks location in the form of “Reserve Bars.”

The company is expecting Starbucks Reserve to deliver twice as much profit as the typical Starbucks store, Schultz said.

Related news

Show more