Wednesday, October 19, 2005

Interviewing Starbucks/Sonics owner Howard Schultz

Starbucks Chairman Howard Schultz was here a few weeks ago and Becky met with him. He asked her a lot of quetions about moving here, how her family was adjusting, etc. She mentioned me and what I did. "Tell him they need to put Ray Allen on the cover!" Schultz exclaimed. (He also owns the Seattle Supersonics in case you didn't know). "Have him email me directly."

I did email him, explaining that Ray was on the cover of slam in the middle of last season and it wasn't time to go back there, but I said we'd like to do a short interview with him. He readily agreed. My editor at That's Beijing asked me to keep him posted about anyone I speak to whom they might be interested in featuring. So I did, and they asked me to do the following interview.

I didn't have the heart to tell him how much I prefer Peet's, where he worked at one point and which the founders of Starbucks bought after selling out to him many moons ago (when Starbucks just had four Seattle stores.) He is either a pretty cool guy or a very good actor.

You'll have to buy Slam in a month or so to read that part of the interview, but here's the Starbucks/TBJ portion.


5 Questions with Starbucks Chairman Howard Schultz
1. What has been the biggest surprise about the Chinese coffee market?
We never imagined that the level of awareness about the Starbucks brand would be as high as it was given that we don’t advertise and do very little promotion. The Chinese customers very quickly began to use Starbucks as the third place between home and work, almost as an extension of their home or office. And all the concerns people had about the Chinese being too in love with tea to drink coffee have been unfounded. We have over 200 stores in China now, and we are not trying to replace tea. Coffee is a complementary beverage and tea is very ingrained in many peoples’ lives.

2. How do Chinese customers differ from American customers?

I think it’s all very different. Eighty percent of our business in the States is take out and 80- percent in China is sit-down. I also don’t think many Chinese people are making coffee at home right now and if they are it’s probably instant and I think Starbucks will educate the market about quality a as we have many other places. Instant coffee will not seem like a good alternative.

3. Do you give your employees in China and elsewhere in the world the same benefits Americans receive?
In the U.S. Starbucks has been recognized for providing comprehensive health insurance, largely because the government does not do it. In china and other places we are looking at unique ways we can provide benefits that are compatible with the needs of our employees and with the laws of the nation and the local municipalities.
The goal is for Starbucks to be the employer of choice wherever we are and I think we’re attracting a wonderful young person to work in China. I’ve been really happy about that.

4. What are Starbucks’ long-term plans for China?
I think it will be an important part of our long-term growth. There’s no doubt in my mind that China will evolve into Starbucks’ second largest market, behind only North America. So we’re talking thousands of stores. It’s important to note, however, that despite the success we have enjoyed all over the world, success in China is not an entitlement. We have to earn it and establish the brand the right way. We want o invest early in giving back and showing we don’t want to just take but also to give. I will spend a lot of time in China over the next few years demonstrating our commitment to the country and to being involved in the community beyond selling coffee. I marvel at what China has been able to do in such a short amount of time and look forward to seeing what comes next.


5. Given your relatively progressive employee policies and corporate ethos is it frustrating to be viewed as a symbol of American imperialism; whenever anti-globalists protest, they seem to seek out a Starbucks window to smash.
Yes, but that really has quieted down over the last few years. That was more about American foreign policy and convenient targets. Despite the publicity something that receives, I think most people are able to separate American foreign policy form American businesses quite easily. When we opened in Paris two years ago, we were killed by the Parisian press for a long time in advance, but the French customers lined up that day and every day since, even through some very rough periods in French-American governmental relationship. We’ve had great success all over the world.

That's what I turned in, but the conversation continued, like this:

You’ve asked me five questions. Now can I ask you one?

Sure.

What are your impressions of Starbucks in China?

First and foremost that it tastes…

The same! Yes, that's very important to us.

Yes, and it is certainly not the case with all Western food and drink. I am also very happy that you have free wi fi. You know, my first month or so here I spent an inordinate amount of time in Starbucks because I did not have my internet hookup yet. I spent hours on many days sitting there pekcing away and drinking coffee and green tea frappucinos and I must say I was shocked by how many Chinese customers you have. I assumed it was there to service expats.

It is very popular and growing as we educate Chinese customers about coffee.