From the bar to the Oval Office. This could be the fate of Howard Schultz, the man who didn’t invent the wheel, but redesigned the cup in such a radical way as to create a veritable empire based on Frappuccini, chocolate cookies, sofas and free wi-fi for all clients. The Starbucks coffee shop perfected by him have imposed a new model that is so powerful that it has now been copied at every latitude and so successful that it has propelled its creator towards the most prestigious armchair in the world.
The journey in Italy
A business trip to Italy ignites sparks in Mr. Schultz’s mind. It is 1983 and in Milan, the American manager comes across a phenomenon that is unheard of in the United States. There are 1,500 bars scattered through the streets. Different in terms of style and public, but always marked by the same climate of conviviality: the smiling cashier, the coffee shop attendant who greets clients by name and chats as he prepares a cappuccino, the other patrons seated around tables intent on reading the newspaper or conversing, employees in work meetings, people relaxing. For one who is used to the instantaneous and poetically bereft ritual of soluble coffee it’s like being part of a stage play. He makes the most of what he has witnessed and aims to transform the spontaneity of Italian bars into a business model, making a drink that after all is common into an exclusive and new product. Apart from anything else, the coffee bar was his destiny. During his years at Northern Michigan University, Mr. Schultz had rejected his study grant based on sporting merit to support himself at university. He took out a student loan that he repaid through various jobs: one of which was a coffee shop attendant.
From “Giornale” to Starbucks
Mr. Schultz acquires his sales skills during his time at Xerox and then Hammarplast, a company owned by a Swedish business where he soon becomes vice president and general manager of the sales team. It is at this very time that he comes into contact with Starbucks. It is a small and unknown coffee roasting house in Seattle but has all the cards on the table to put into place ideas matured in Milan, as he visited bar after bar drinking espressos and cold coffee. The owner of Starbucks, however, does not want anything to do with the transformation of the roasting house into an Italian-style coffee shop with an American tone.
Starting his own business is the only way. He does so in 1985 with his own brand (it’s no coincidence that it has an Italian name, “Il Giornale”), and starts looking for investments, to the tune of 1.6 million dollars. Not an easy undertaking as Mr. Schultz explains, “I spoke with 242 people and 217 said no. It’s really discouraging to hear that your idea is something that’s not worth investing it so many times”. However, for a child of the American working class the will to make it was so strong to overcome these discouraging moments. He rolled up his sleeves and started to open one shop after another.
Two years later “Il Giornale” had grown so much that it was time to consider expansion. Mr. Schultz bought the Starbucks coffee shop for 3.8 million dollars and became the Managing Director. He opened more than 140 shops in just five years and then thought really big and hit Wall Street.
1992 was the year of the IPO and the group had a turnover of 73.5 million dollars. Passion for his original coffees spreads outside of America and by 2000 the number of shops has reached 3,500 with a turnover of 2.2 billion dollars. The success of the format is not so much based on the product as the context in which it is served and consumed, a type of “third home” after the house and workplace, a place to meet and relax, where you can work undisturbed or sit down to read a good book.
With more than 238,000 employees, the Starbucks bars now number more than 28,000 in 77 countries. Numbers that are so important to permit the next step, the launch in Italy, the country that has nothing to learn from anyone about coffee. September will see the arrival of the venture in Milan, postponed on a number of occasions. A launch that Mr. Schultz himself has promised will be marked by “humility and respect”.
A coffee at the White House?
As early as 2000, Mr. Schultz tried to leave the group created from almost nothing. He backtracks eight years later and returns to the helm of the group, concerned about share value losses. In 2016, he again takes up the role of Managing Director and in June 2018, he leaves the role of Executive Chairman, after 40 years in the company. An exit that was not fully explained and immediately interpreted as heralding an imminent descent into politics. Mr. Schultz has never hidden his strong anti-Trump feelings and this had fed the hopes of the Democratic Party of being able to count on him for the challenging post Hillary Clinton phase.
Via the “New York Times” Mr. Schultz gave a little away for the first time: “I want to be honest without encouraging speculation. For some time I have been very concerned for our country, for the increasing internal divisions and our position in the world. One of the things that I would like to do in the next chapter of my life is to evaluate the role that I could play in paying back what I received from the United States”.
The primaries for the Democratic Party are still a long way off, but the best candidate at the moment is the man himself. The son of a truck driver who was left an invalid, as he did not have health insurance. A man who created one of the most powerful and known brands of stars and stripes capitalism and who is able to give the American dream a less populist and flaunted twist.