When Howard Behar joined Starbucks in 1989, it was a small northwest coffee chain with just a few dozen stores in the region. He was out of work and looking to move away from the corporate world by taking a job at a simple, innocuous coffee company.
By the time he retired 21 years later, Starbucks had transformed into the tremendous global coffee monopoly it is today, with Behar as the head of Starbucks International. According to Euromonitor, nearly $30bn was spent in Starbucks coffee shops and on Starbucks retail products in 2018 worldwide, which was more than the second and third largest brands combined.
What Behar expected to be a minor role at an average company turned into life-changing career. He has authored two books about his role at Starbucks and continues to speak publicly about his career nearly 10 years after his retirement.
‘Coffee is not god’
At the 2018 National Automatic Merchandising Association (NAMA) Coffee Tea & Water show in New Orleans this month, the 75-year-old headlined the industry conference with ‘It’s Not About the Coffee’ in conversation with National Food & Beverage Foundation CEO Liz Williams.
Behar spoke about his accomplishments during his time at Starbucks, including his roles as president of Starbucks Coffee North America and founding president of Starbucks International.
He is also credited with facilitating the introduction of non-fat milk to the Starbucks menu, sneaking the Frappuccino concept into rotation after it was conceived by a few local managers and pushing for the expanded footprint of Starbucks stores to accommodate more customer seating.
Throughout the years, Behar has maintained an emphasis on serving employees and customers above all else. His outlook that Starbucks is “not in the coffee business serving people, we’re in the people business serving coffee,” was so important to him that he kept the message on a sign hung behind his desk at Starbucks.
During their tenure Behar and his longtime friend and former Starbucks CEO Howard Schultz thought a lot about how to prioritize the business, engage with consumers and listen to employees. Even though the coffee is important, Behar has always been adamant that the most crucial aspect is to focus on the people.
“That’s how the company thought of it, that coffee is god. Coffee is not god, the people are god. It’s up to the people to tell us how they want it. And as long as it fits within the context of your business and serves your customers, you have to be willing to try it,” he said.
Establishing industry trust
Behar warned his beverage audience that company growth like Starbucks’ doesn’t happen overnight and was the result of a well-structured foundation.
“If you have a set of values, then those should be your values in good times and in bad. If your first guiding principle is to treat each other with respect and dignity, that should not change if something goes bad,” he said.
While Starbucks is known for its successes, it also has had its share of failures. During the economic downturn following 2008, Starbucks shuttered 600 struggling stores to accommodate the earning pressure a public company typically faces.
Behar shared that it took a long while to earn back the trust of its customers and employees after the massive layoffs and advised that “if you think you’re invincible, you’re not. We don’t own success, we borrow it.”
“Leadership is about standing up. You’ve got to be willing to bet your job every day. And if you’re not, you shouldn’t have the job,” he said.
A global transition
The total spending in the global coffee industry is estimated to fall between $180-$200bn in 2018, according to Euromonitor, with $60.5bn from coffee shops alone.
At the NAMA show, Datassential analysts revealed that 48% of people drink brewed coffee every day, while the ready-to-drink (RTD) coffee business is up to $20.7bn in sales in 2018.
Behar spoke about his experience with growing Starbucks’ stake in the coffee industry and the difficulties of taking the brand international. He was told that the company could never adapt outside the US, but Starbucks now has a presence in 76 countries.
It wasn’t all smooth sailing, and Singapore and Malaysia were markets that were particularly challenging for the company.
“When going international, don’t try to reinvent the wheel before you get there. Take what you know and then figure out what works and what doesn’t work,” Behar said.
He thinks that the popular use of mobile ordering works well for Starbucks, and credits Schultz for being a successful early adopter of the technology, but acknowledges that it won’t work for every business. At the core of every company, he believes that open communication and being a good listener are key.
“If you want to grow your business, listen to your people. Live your life with intention and do what fills your soul,” he said.
“I’m 75 years old and I’m optimistic enough to have a five year plan.”