As my readers know, I am a Starbucks raving fan. Howard Schultz, CEO, left his company to pursue other interests in early part of the last decade only to return January 2008 to revitalize the chain. And that he has. The stock has tripled since then and items like hot breakfast sandwiches and specialty frozen drinks have driven growth.

So it came as quite a surprise to receive a letter from Schultz this past Friday that was emailed to most likely his Gold customers. What follows is his letter which is of pure political nature. If you don’t want to read about political issues, then don’t read this letter. I am enclosing it because Schultz obviously has a reason for writing the letter and sharing with the world. Ironically, it was sent two hours after one of the worst employment reports to come out of the U.S .Government since 1945. The stock market is not happy, people looking for work are not happy and truthfully, when it comes down to the economy, what is there to be happy about?

Obama just registered his lowest approval rating yet, only 43%. He scores far worse when it comes to the economy. Perhaps he will have something to say on Thursday at 7PM, we will all be listening (or will we?).

As a CEO, our responsibilities are many but mainly are focused on our talent (employees), customers and community. I can tell you that the biggest concern going right now is if the country and rest of the world will go back into a recession (double-dip). The fact that so many people think so means we have hope it won’t. But until then, look for more business executives like Schultz to get involved in politics, something typical taboo for highly recognized CEO’s. Here you go:

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September 2011 Dear Starbucks Friend and Fellow Citizen: I love our country. And I am a beneficiary of the promise of America. But today, I am very concerned that at times I do not recognize the America that I love. Like so many of you, I am deeply disappointed by the pervasive failure of leadership in Washington. And also like you, I am frustrated by our political leaders’ steadfast refusal to recognize that, for every day they perpetuate partisan conflict and put ideology over country, America and Americans suffer from the combined effects of paralysis and uncertainty. Americans can’t find jobs. Small businesses can’t get credit. And the fracturing of consumer confidence continues. We are better than this. Three weeks ago, I asked fellow business leaders to join me in urging the President and the Congress to put an end to partisan gridlock and, in its place, to set in motion an upward spiral of confidence. More than 100 business leaders representing American companies – large and small – joined me in signing a two-part pledge: First, to withhold political campaign contributions until a transparent, comprehensive, bipartisan debt-and-deficit package is reached that honestly, and fairly, sets America on a path to long-term financial health and security. Second, to do all we can to break the cycle of economic uncertainty that grips our country by committing to accelerate investment in jobs and hiring. In the weeks since then, I have been overwhelmed by the heartfelt stories of Americans from across the country, sharing their anguish over losing hope in the strongest and most galvanizing force of all – the American Dream. Some feel they have no voice. Others feel they no longer matter. And many feel they have been left behind. We cannot let this stand. Please join other concerned Americans and me on a national call-in conversation on Tuesday September 6th hosted by “No Labels,” a nonpartisan organization dedicated to fostering cooperative and more effective government. To learn more about the forum and the pledges, visit www.upwardspiral2011.org America is at a fragile and critical moment in its history. We must restore hope in the American Dream. We must celebrate all that America stands for around the world. And while our Founding Fathers recognized the constructive value of political debate, we must send the message to today’s elected officials in a civil, respectful voice they hear and understand, that the time to put citizenship ahead of partisanship is now. Yours is the voice that can help ignite the contagious upward spiral of confidence that our country desperately needs. With great respect, chief executive officer, Starbucks Coffee Company

Happy Tuesday!

 

You got to hand it to Howard Schultz: He will try anything. Proof positive is the launch of his new VIA.

What is VIA you ask? It’s innovative, it’s tasty, it’s expensive and it’s something you shake your head and ask yourself, "Are you kidding me?"

VIA is instant coffee packed in a little tiny package about the size of a green bean. Each package makes one 8-oz. cup of Starbuck’s coffee. Oh, you can buy a 12-pack for about $10, or about 80 cents a piece.

Who is going to spend 80 cents for a cup of coffee that one: You have to have boiling water available and two: You have to have a cup available and three: You have to have something to stir the coffee available?

Schultz thinks millions will. I tried VIA and surprisingly so, it tasted like fresh-brewed coffee.

Coffee pods have become big business and sell for about the same price. However, you need a pod maker to make pod coffee. With VIA, you only need boiling water. So I thought about the instances that I would use VIA instead of my coffee maker or my visit to Starbucks:

Hiking and camping: Perhaps 3 VIA’s in the next 20 years

Airplane: Delta still offers boiling water for free

Stuck in a place with no Starbucks: Impossible

McDonald’s: Just to prove that VIA is better than their fresh brewed coffee

I hope VIA is a success. If consumers are willing to pay 80 cents a pop, then I’m thinking the re-invention of shampoo, conditioner, hand lotion and other packets is a must. Consumers surely want to use the same products when they travel as they do at home. And packets are TSA safe, convenient just like VIA. And at 80 cents each, affordable.

In fact, I am envisioning a whole slew of packet ideas. We already love them for ketchup, mustard, wet naps, sweeteners, and make-up removers. I’m sure Hershey will offer chocolate packets (better tasting than GOO). And how about Charmin packets? I have a lot of work to do because I can see modern civilization turning into a packet society. China, India, Vietnam will demand packets.

OK, I got to go and write all this stuff down. In the meantime, let me know how VIA sells Howard.

Happy Thursday!

 

I remember my first espresso experience. It happened in New York with a guy that I hired to manage our trade shows. He took me to this hip and relevant coffee shop and ordered up espresso’s and pastries.

He handed me my espresso and I asked him what this was? He said to drink it slow, savor it and that it is very concentrated coffee. Two gulps later the cup was empty, the pastry was gone and he was still nursing his cup. I told him I liked hot coffee and nursing an espresso wasn’t for me.

He bought me another one to keep me quiet.

I also remember my first Starbucks experience. This was well before Michigan had its first Starbucks. In fact if my memory serves me correctly, we were one of the last states to land a Starbucks. Coffee in this town always meant stopping at the gas station or Dunkin.

We were in Vegas on vacation with my brother and his wife who lived in Florida. Starbucks invaded Florida rightfully so and she got hooked on Starbucks. There just happened to be a Starbucks in the casino hotel we stayed at (Treasure Island) and if we didn’t stop and have Starbucks, she would of ranted and raved all day long. After just one minute of her ranting, we ran to Starbucks.

The line was out the door, around the casino, which led to being around the pool which let to being down the Strip which led to standing and waiting for a very long time. Any attempt to leave the line would have resulted in A: broken knee cap B: two more days of ranting and/or C: divorce from my brother. We stayed in line.

I had my first Cap and it was quite tasty. But then after waiting in line for so long, a cup of Joe from White Castle would have been tasty. Needless to say, we had to endure this each morning of our stay.

Back in Michigan, since there were no Starbucks, it was back to normalcy. But a year or two later, they invaded Michigan with a thunderous landing. I started out doing Friday’s. Then it was Monday’s and Friday’s. Then it was M-W-F. Then it was M-F (still, never on weekends). The only solace was that my sister-in-law was still crazier than I am-she does weekends.

Anyway, this story has gotten way too long and it’s time to get to the point. I went today for my usual triple Grande wet cap extra hot and the barista told me $4.08. I paid $3.71 yesterday. The barista and the rest of the staff were in mourning and explained the new prices started today. Extra espresso shots zoomed from $.55 to $.70. Grande’s zoomed up $.15 as well. Large coffees crossed the $2.00 zone.

The increase is $.37. Multiply that by 5 = $1.85 and multiply that by 50 weeks = $92.50 annual increase.

Howard Schultz, founder of Starbucks is no dummy. He calculated that Starbuck’s zealots like myself will go into shock the first day or even first week, and then get over the shock and ante up the $92.50 which of course will go right to his bottom line. He figured that a small percentage will defect to Dunkin or Mickey D’s but overall, his take will be bigger.

There is a lesson to be learned from this. If you have zealots as customers, raise your prices. If you can raise prices during the worst economic times of our times, just think what the future holds when times get better. Hmm, it might be a good time to buy Starbuck’s stock which already zoomed from $9 to over $19. Or I can give up the coffee for a week buy one share a week instead. At the end of year, I will have something of value instead of pissing it away.

Happy Thursday!