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Europe: Starbucks Coffee Is Coming!

Bellingham, Wash., 22 May 1998 (RFE/RL) -- Starbucks is the Seattle-based company that, single-handedly, created an American market for high-priced Italian-style coffee drinks from espresso to cafe latte and cafe mocha. Now the rapidly growing company is planning an invasion of Europe from a new base in what may seem to be an unlikely place -- Great Britain, a nation of tea-sippers.

And that's only a first step to crossing the English Channel and driving on toward -- who knows? -- Moscow and the Pacific beyond, spokesman Soon Beng Yeap of Starbucks International tells RFE/RL.

If the inspiration for its coffee stands is the Italian espresso bar, Starbucks Coffee Company is, nonetheless, as American as its name, which is taken from a coffee-loving character in Herman Melville's classic 19th century whaling novel, Moby Dick. Starbucks is American also in the audacity and speed with which it has developed over the last decade, since the Seattle coffee roaster came under the leadership of its current chief executive officer, Howard Schultz.

Looking back, Schultz credits a trip to Italy in 1983 with having inspired his vision for selling freshly brewed coffee drinks in a style reminiscent of the conviviality and convenience of Italy's espresso bars. Schultz says "there are 200,000 espresso bars in Italy" -- 1,500 of them in the northern Italian commercial center of Milan, a city not much larger than the Seattle metropolitan area.

So, using the original Starbucks roasted coffee, which had been around as a coffee roaster at Seattle's tourist-famous Pike Public Market since 1971, Schultz opened a few coffee stands in Seattle under the Italian name Il Giornale. Within a few years, he led a team of Seattle investors to buy out the original coffee-roasting operation and take on its savory American name, Starbucks.

Under Schultze's leadership, Starbucks Coffee today is sold at 1,500 coffee stands in 29 of the 50 United States and several Canadian provinces. This is the basis of its claim to be the leading retailer, roaster and brand of specialty coffees in North America. It also expresses pride in how it treats its 25,000 employees and its coffee suppliers in Central America, the Pacific and Africa.

First, Starbucks calls its staff members "partners," not workers. It trains them into knowledgeable baristas, the Italian name for the people who brew fresh coffee drinks to order, and offers its "partners" -- whether they are full-time employees or college students working part-time -- medical and other benefits. These include an opportunity to buy company stock under favorable terms most stock companies reserve to reward top executives.

Schultze says "we realize that our people are the cornerstone of our success, and we know that their ideas, commitment and connection to our customers are truly the essential elements" of what he calls "the Starbucks Experience" -- all the aspects that attract new customers to Starbucks and keep them coming back for more.

Starbucks also contributes, through its Starbucks Foundation, to support the communities in which it operates -- at home and abroad. In addition, the company claims to be the first importer of an agricultural commodity -- its coffee beans -- to develop a code of conduct as a first step in what it describes as "a long-term strategy to improve conditions in coffee-origin countries. This strategy includes working with smaller growers to improve working conditions, increase income and improve the quality of the harvest, reduce pollution and respect the environment where they operate.

Having opened coffee stands through joint ventures with local catering companies in several Pacific Rim countries -- Japan, Singapore, the Philippines, Taiwan and New Zealand -- Starbucks feels confident enough now to enter Europe.

Another Howard -- Howard Behar -- heads the international operation, Starbucks Coffee International, a wholly-owned subsidiary of the parent company. Local joint ventures are Behar's strategy of choice, he says, seeking "opportunities with companies that have expertise in the marketplace and, more importantly, share similar values, vision and business philosophy."

Last month, Behar announced Starbucks' invasion of London. It is accomplishing this peaceful invasion by acquiring a London-based company begun in 1995 by a husband-and-wife team from Seattle and called Seattle Coffee Company. The founders, Scott and Ally Svenson, are staying with Starbucks to consolidate and guide the British operation, which includes 56 Starbucks-style retail stores across the United Kingdom, adding 30 more outlets by the end of this year.

Behar describes the London acquisition as "an excellent opportunity to expand the Starbucks brand throughout the United Kingdom and Europe, while continuing our successful operations and expansion in the Asia Pacific region."

At this point, says spokesman Soon Beng Yeap, the company's emphasis is on absorbing its British acquisition rather than mapping out a specific plan for crossing the English Channel -- though that is Starbucks' intention. As Yeap puts it, the United Kingdom -- where Earl Grey tea is, after all, better known than arabica coffees -- will be "our springboard to Europe."