Starbucks Advances Mobile Payment Experience, Extends Starbucks Reserve® Coffee Program and Invests in Talent Development at 2012 Global Leadership Conference


WEBWIRE – Friday, October 05, 2012

Company inspires nearly 10,000 store managers to lead and contributes 42,000 hours of community service during three-day conference in Houston

HOUSTON - Starbucks Coffee Company (NASDAQ:SBUX) today kicked-off its three-day Global Leadership Conference in Houston where the company will inspire nearly 10,000 store managers by investing in their development, connecting them with the company’s core values and motivating them to deliver against Starbucks business aspirations.

Conference highlights include:

• Starbucks chairman, president and ceo Howard Schultz and Square founder and ceo Jack Dorsey announced that customers will be able to use Square Wallet to pay with their mobile phones at U.S. Starbucks stores beginning in early November. Customers will also be able to use the Square directory to find more than 7,000 U.S. company-operated Starbucks stores.
• Starbucks also announced it will enable digital tipping on its existing mobile payment applications and on Square Wallet for its U.S. store partners (employees) in summer 2013.
• As a further testament to the company’s innovation in mobile payment, the Starbucks mobile application is now integrated with Apple’s Passbook allowing customers’ Starbucks Cards to appear on their iPhone screen automatically after they enter a favorite Starbucks store.
• The company announced plans to introduce its rare and exotic Starbucks Reserve® coffee line using its patented Clover® Brewing system to approximately 200 additional locations in the U.S. and Canada. Global expansion into key international markets, including Japan and the U.K., is also expected.
• Announced the San Francisco Evolution Fresh™ store will be opening for business in mid-October; next Evolution Fresh™ location coming to University Village shopping center in Seattle in mid-November.
• A nearly 400,000-square-foot immersive “Leaders’ Lab” has been constructed that will guide conference participants through a two-hour interactive journey that brings Starbucks mission statement to life by highlighting coffee, customers and community.
• By the close of the conference, Starbucks expects to have contributed $22 million in economic and community service impact to Houston – including the largest single corporate community volunteer project in the city’s recent history.
• The company celebrated the opening of its third profit-sharing Community Store in Houston in collaboration with the Association for the Advancement of Mexican Americans (AAMA).

“Building an enduring company requires making a sustained investment in its people,” said Schultz at the Houston conference. “In the forty-two year history of the company, there has never been a more important or exciting time for Starbucks. Four years ago I addressed our first global leadership conference in New Orleans, and we emerged from those meetings energized and poised for our next wave of growth. Today, Starbucks stands as a stronger, more innovative and relevant company, largely due to the bet we made on our partners (employees) in New Orleans. These next few days will give our leaders the opportunity to reconnect with the heart of our company through community engagement, refining our coffee expertise and perfecting the art of exceeding our customers’ expectations.”

Developing Leadership For The Future

Today Starbucks commenced its 2012 Global Leadership Conference which will run through Saturday, Oct. 6. Nearly 10,000 of the company’s store managers and regional leaders from outside the U.S. traveled to Houston for three days of inspiration, instruction and interaction. Starbucks has branded the conference with the theme “Lead” to reinforce the critical leadership role these store managers - many of whom are running the equivalent of small businesses generating more than $1 million in annual sales - play in the company’s success.

As the fourth-largest city and fourth designated green coffee port in the U.S. as well as an important gateway to Latin America, Houston’s rich diversity and deep community roots make this an ideal location to bring Starbucks retail leaders together. Starbucks has 228 company-operated and licensed stores in Greater Houston where it employs more than 2,500 partners. The company’s first store in Houston opened in 1994.

Starbucks is investing $35 million in this conference. When combined with the company’s extensive three days of volunteer work across the city, the combined direct and indirect economic impact in the Greater Houston area is nearly $22 million.

“Starbucks is a brand that needs no introduction, and we couldn’t be more pleased to be hosting their Global Leadership Conference here in Houston,” said Greg Ortale, president and CEO of the Greater Houston Convention and Visitors Bureau. “Not only is Starbucks going above and beyond with a community outreach initiative while they’re in our city, but they’re leaving behind a nearly $22 million impact in Houston. It is a double legacy for their community outreach and for all the hospitality jobs supported by their direct spending.”

Several inspiring guest speakers will address attendees on the subject of leadership. In addition to Schultz, speakers will include Starbucks president of Americas Cliff Burrows; Square founder and ceo Jack Dorsey; and Harvard Business School professor Nancy Koehn.

Conference attendees will participate in interactive sessions that will strengthen store managers’ expertise in coffee, communications, customer service and partner recruitment as well as other leadership skills and business fundamentals that will accelerate Starbucks retail growth and differentiation. To bring the brand, mission and leadership imperatives to life, the company has created a nearly 400,000-square-foot immersive “Leaders’ Lab” that will guide conference participants through a two-hour interactive journey.

Accelerating Starbucks Mobile Payment Leadership

In a joint presentation today, Schultz and Dorsey announced that Starbucks customers will be able to begin using Square’s mobile payment application, Square Wallet, in early November at Starbucks approximately 7,000 U.S. company-operated locations. Starbucks also announced that it will enable digital tipping at its U.S. company-operated stores through both the Square and Starbucks mobile payment applications in the summer of 2013.

“Starbucks and Square share a passion for constantly improving the customer experience,” said Dorsey. “This partnership gives millions of Starbucks customers a quick, seamless payment experience and introduces them to hundreds of thousands of small businesses in the Square directory.”

Additionally, the official Starbucks mobile app is now even easier for customers with an iPhone or iPod touch. Today, Starbucks announced that Starbucks Card integrates Passbook functionality. From the Starbucks app, iPhone and iPod touch users simply need to tap “add to Passbook” once, and just swipe their Starbucks pass in Passbook to pay at a Starbucks store. Passbook is time and location enabled, so the Starbucks Card will show on the device’s Lock screen automatically as soon as a customer enters their favorite Starbucks store.

In early August, Square and Starbucks announced a groundbreaking partnership that will enhance the payment experience for millions of Starbucks customers while helping stimulate small business growth. With more than 70 million mobile payment transactions since Starbucks launched its mobile payment app in January 2011, the company has quickly emerged as the nation’s largest mobile payment platform. In August, the companies also announced that Square will process Starbucks U.S. credit and debit card transactions, which will significantly expand Square’s scale and accelerate the benefits to businesses on the Square platform, especially small businesses, while reducing Starbucks payment processing costs.

Elevating Coffee Leadership

“Our store managers are the heart and soul of Starbucks and being a coffee leader is just as critical as being a business leader,” said Burrows in Houston. “At this conference, we are ensuring that our managers fully understand and embrace our rich heritage and expertise in sourcing and roasting the highest-quality coffee. This will help them deliver a perfect coffee experience with inspired customer service every day.”

Underscoring its coffee leadership and innovation, the company announced it plans to increase the number of locations where it sells and brews its rare and exotic Starbucks Reserve® coffees. There are currently 347 locations in the United States that sell Starbucks Reserve® coffee in packages of whole bean and also offer it by the cup brewed on the company’s patented Clover® Brewer.

In 2013, the company is planning to expand the number of Starbucks Reserve® stores by 60 percent – or approximately 200 locations - in the U.S. and Canada with additional expansion planned for key international markets, including Japan and the U.K., where Starbucks Reserve® already has a presence. Starbucks also plans to add several new exotic coffees to the Reserve® assortment, including a rare Geisha coffee varietal from Costa Rica that is one of the most highly sought-after coffees in the world this holiday season.

Bringing Starbucks Juice and Food Innovation To Life

Additionally, Starbucks announced that the third retail store for Evolution Fresh will open mid-October in the Filmore district of San Francisco, and it plans to open an additional store in the University Village Shopping Center in Seattle in mid-November. The opening of the new stores, as well as the continued expansion of Evolution Fresh™ bottled beverages, positions the brand’s continued growth in the $3.4 billion and growing cold-crafted juice category.

The addition of La Boulange® to the Starbucks portfolio earlier this year was a key next step in the company’s journey to bring authentic and delicious food to customers, delivering additional reasons to enjoy their experience during multiple day-parts and at differentiated retail locations. After an initial market evaluation this fall and winter, Starbucks will begin to roll-out fresh La Boulange™ products to its company-operated stores in the U.S. beginning with the broader San Francisco area in late spring 2013.

Helping Communities Thrive

Starbucks has a long history of supporting communities and has always believed that passion for service is directly tied to leadership. As part of the conference, nearly 10,000 partners will participate in community service projects across several Houston neighborhoods, creating sustainable value for some of Houston’s most underserved communities.

Starbucks is teaming up with the Fifth Ward Community Redevelopment Corporation, Houston Food Bank, Volunteer Houston and the Association for the Advancement of Mexican Americans (AAMA). Partners will participate in a variety of projects including revitalization of Lyons Avenue, home restoration, internal and external refurbishments on the AAMA campus, assembly of hygiene kits for homeless veterans, urban garden creation and packaging and sorting food that will be distributed to nearly 500 food pantries, soup kitchens, senior centers and other agencies.

More than 200,000 Houston residents are expected to benefit from these efforts, making this the single largest corporate volunteer effort in Houston’s recent history. It is estimated that Starbucks partners will contribute more than 42,000 hours of community service over the next three days—resulting in nearly $1 million of financial value for the Houston community through service.

The company also celebrated the opening of a profit-sharing Community Store in Houston’s East End neighborhood. The Houston location is the company’s third Community Store in the U.S. Starbucks opened its first two profit-sharing Community stores in Harlem, N.Y. and Crenshaw, Calif. one year ago.

Starbucks is partnering with AAMA on the Houston Community Store which opened on September 25. A portion of each transaction from this store will be directed to AAMA and be strategically invested in youth and education programs benefiting Houston’s most underserved Hispanic community.

About Starbucks Corporation

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest-quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.

Forward-Looking Statements

This release contains forward-looking statements relating to certain company initiatives, strategies, plans, trends and expectations regarding our business, including the availability and functionality of certain payment systems and the cost savings to Starbucks, the acceleration of our retail growth and differentiation, and the expansion of Evolution Fresh, La Boulange and other brands and products. These forward-looking statements are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results may differ materially depending on a variety of factors including, but not limited to, successful implementation by us and our third party providers, and acceptance by our customers, of our new payment systems, the ability to successfully provide our partners (employees) with the necessary skills to create growth and differentiation, the acceptance of our new and innovative products, the costs associated with, and the successful execution of, these and other of the company’s initiatives, strategies and plans in markets in which Starbucks does business, the impact of competition in such markets and other risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” section of Starbucks Annual Report on Form 10-K for the fiscal year ended October 2, 2011. The company assumes no obligation to update any of these forward-looking statements.



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