Complete coverage: Starbucks 2019 Annual Meeting of Shareholders
We’ll be reporting throughout the day from the WaMu theater in downtown Seattle.
All the top moments from the event, plus the films shown onstage and more.
Top 5 things you might have missed at the 2019 Starbucks shareholder meeting
- A new lid for cold beverages announced as part of the company’s sustainability commitments, could eventually eliminate a billion straws a year.
- Brandi Carlile was the surprise musical guest, singing stories for shareholders on her wife’s birthday. “Thank you, Starbucks. This made my whole day,” she told the crowd. “Don’t tell Catherine!”
- Dad joke of the day from CFO Pat Grismer, saying he had a new favorite beverage, the Cloud Macchiato: “It used to be a tall skinny vanilla latte. You might say it seemed a little like me.”
- A new venue for the meeting, the WaMu Theater in downtown Seattle, created potential for new experiences, including an interactive exhibit in which shareholders raked green coffee beans on a replica patio.
- In a year in which the stock price hit a record high, Starbucks chief exec Kevin Johnson closed the meeting with a pledge to keep doing good in the world – and investing in telling stories that inspire others to do the same.
Brandi Carlile sings stories
11:55 a.m. PDT
It’s a tradition at the Annual Meeting to have a surprise musical guest, and Starbucks ceo Kevin Johnson closed Wednesday’s shareholder event by introducing “one of Washington’s greatest treasures,” special musical guest Brandi Carlile.
“At today’s meeting we’ve explored stories of the human experience,” Johnson said. “She is one of the best lyrical storytellers in music today, a woman who combines her art with her personal mission.”
Singer-songwriter Carlile is a three-time Grammy Award winner and seven-time Grammy Award nominee.
“It doesn’t feel like noon,” Carlile said. “This feels like a rock-and-roll show.”
Before she began, someone from the back of the theater called, “I love you, Brandi!”
“I love you, too,” Carlile said, laughing. She and her bandmates performed “The Story” and “The Joke.” Then Carlile performed “The Mother” solo, a song she wrote for her oldest daughter, Evangeline.
“It was an honor to play for you,” Carlile said, as she got a standing ovation from the room. “Thank you, Starbucks. This made my whole day.”
Telling great stories: Introducing Starbucks Productions
11:49 a.m. PDT
“As Starbucks partners pursue good, they create so many inspiring stories,” said Kevin Johnson, Starbucks chief executive officer, as he described a new initiative to find, tell and curate stories of humanity and inspiration.
“This year, we assembled a small, talented, in-house team to help tell stories that celebrate the human experience,” he said.
For a sense of the kind of stories the team is working on, watch this trailer that Johnson described as highlighting projects in the pipeline like: Hingakawa, a documentary about two women after the Rwandan genocide, where coffee production bridges unimaginable divides; To Be Human, a series in which we meet our customers where they are – living lives with extraordinary meaning; and another focused on the profound joy and passion of the community that is world football:
The pursuit of doing good
11:43 a.m. PDT
Last year at the shareholder meeting, Starbucks outlined commitments to make coffee the first sustainable agriculture product and to serve it in sustainable packages. Starbucks agronomists continue to make progress, in partnership with Conservation International, on the sustainability of coffee, said Kevin Johnson, Starbucks chief executive officer, at Wednesday’s Annual Meeting in Seattle.
The company also has donated 30 million disease-resistant coffee trees to farmers around the world and invested $50 million in the Starbucks Global Farmer Fund to help farmers operate their business.
“We cannot do this alone,” he said. “We will continue to work with industry and governments around the world to address climate change.”
Starbucks commitment to the pursuit of good also means strengthening communities, he said.
In the last two years, more than 15 million Starbucks meals have been donated to those in need through the Food Share program. Locally, in Seattle, Starbucks worked with the community to enable six family shelters operated by Mary’s Place.
“These are just a few of the examples of how we are a different kind of company, with a different kind of mindset,” he said.
Starbucks works toward global gender equity in pay
11:38 a.m. PDT
As Kevin Johnson, chief executive officer, returned to the stage at Wednesday’s shareholder meeting, he said that there’s one more important element of the Starbucks brand that he wants to close with – the importance of doing good.
“We are believers who understand that the pursuit of profit is not in conflict with the pursuit of doing good,” he said. “Doing good is what inspires the believers and it is authentic to who we are.”
It begins with creating opportunity for Starbucks partners, he said, noting that over the past three years, Starbucks has hired more than 22,000 veterans and military spouses and 75,000 young adults through the Opportunity Youth initiative. And 12,000 partners are pursing a free college degree through the Starbucks College Achievement Program.
But “we are not just creating opportunities, we are creating equal opportunities,” he said.
Last year, Starbucks announced it had achieved 100 percent gender and race pay equity in the United States, where nationally women make 80 cents to every dollar a man makes.
Johnson said that company has maintained that standard in the U.S. for the second year and also verified that it has gender equity in pay in China and Canada. Starbucks has made a commitment to working to closing the gender pay gap around the globe.
“We are not just creating opportunities, we are creating equal opportunities,” he said. Read more
Partner power key to Starbucks success
11:36 a.m. PDT
Starbucks partners are the common thread, the thread that binds, said Roz Brewer, chief operating officer and group president for the Americas, at the Annual Meeting of Shareholders Wednesday in Seattle.
Partners “should feel empowered to make connections that are personal, inspired and positive. They should feel supported in having fewer administrative tasks, greater clarity on what’s important and more time to make meaningful connections,” Brewer said.
Yet over the years, as the business has become more complicated, it has also complicated their jobs. This is why Starbucks is working hard to streamline – to reduce the time partners spend on manual tasks and to align their hours with store traffic flow.
Brewer said partner engagement was at its highest just after Starbucks closed its stores for anti-bias training last May. The opportunities will continue later this year, when the company will introduce a new curriculum developed in partnership with Arizona State University (ASU) faculty and outside diversity experts that focuses on empathy, courage, and inclusion. In addition, 12,000 store managers will gather in Chicago in September for a leadership conference, in nearly 10 years.
“We know this will be a defining moment for galvanizing our partners around our mission and values. Together, we’ll build on conversations about taking ownership and making best moments for our customers,” Brewer said. “We’re in the people business serving coffee. Our success rises and falls on human connection.”
Reimagining the third place
11:31 a.m. PDT
Decades ago, Howard Schultz, now Starbucks chairman emeritus, shared his vision for the third place, said Roz Brewer, chief operating officer. He envisioned the stores as places where people could take a break from the busy pace of life, have conversations with friends and have a great cup of coffee.
It’s still the guiding vision today, she said on stage at Wednesday’s Starbucks shareholder meeting in Seattle. Even as customers and the company have changed and evolved, as people’s lives have gotten busier and the Starbucks has grown to offer a more robust menu, the third place is more vital than ever, she stressed.
“This reality inspires us to lead with a growth mindset and to reinvest in our partners, customers and company,” she said. “At the same time, the vitality of our mission and place in the world challenges us to connect with customers on a deeper level … to ensure we always see the humanity in every customer who walks through our front doors.”
Reimagining the third place of today means focusing on three attributes: convenience, comfort and connection. It’s about “listening to our customers so we can better position our business now and for the future.”
Last summer, the company began exploring what customers and partners needed in different markets across the country and making changes to some stores.
“And yet… no matter how much we innovate… perhaps the most important insight is this:
“We must always feel like Starbucks,” Brewer said. “Our relationship with our customers starts with the moment they think of us. They connect with us through their barista and the quality of what’s in the cup they take with them.
“Their third place is everywhere they’re holding our cup.”
‘This is our brand at its best’
11: 24 a.m. PDT
Roz Brewer, chief operating officer and group president for the Americas, said growth means continuing to build on the company’s foundation with innovation, including new forays into beverage development, delivery and digital transformation.
On stage at Wednesday’s Starbucks Annual Meeting of Shareholders in Seattle, Brewer said the popular Nitro beverage is now available in almost half of the stores in the U.S, and Starbucks now offers delivery in 12 countries, including China, Japan, the United Kingdom and Mexico. In the United States, Starbucks Delivers is now available in nearly 1,600 stores in seven major markets, and soon in Seattle.
On the digital front, the Starbucks Rewards loyalty program has grown more than 25 percent over the last two years, significant given that the program’s 16 million members now drives 40 percent of sales in the U.S., she said. Next month Starbucks is enhancing its rewards program to give members even more flexibility and choice in redeeming their stars, Brewer said.
“I’m thrilled with the headway we’ve made, driven by the passion and hard work of our partners,” Brewer said. “And we see it in markets all around the world.”
Brewer recently traveled to the opening of the Starbucks Reserve Roastery in Tokyo, Japan – the highest sales day in the history of the company. Starbucks continues to grow in China, opening a new store about every 15 hours and being named one of the country’s best employers four years in a row. Last week, Starbucks opened its 30,000th store worldwide in Shenzen.
“Growing our store base remains essential to our brand,” Brewer said. “It’s truly remarkable to think how we’ve grown from a single store in Seattle where customers scooped roasted beans for brewing at home, to serve a city halfway around the world with a full menu of craft beverages and delicious food. And they can have their Starbucks delivered, too!”
‘To Be Human’: Our stores, your stories
11:12 a.m. PDT
Roz Brewer, chief operating officer and group president, opened her remarks with customer voices from around the United States. The customers were interviewed as part of the Starbucks Productions “To Be Human” storytelling series.
To Be Human aims to connect more deeply with the incredible and diverse humans who occupy the third place. By hearing and sharing these stories, we celebrate the grace, humor, courage and grit that exists at tables and in crowds at every single one of the 30,000 Starbucks stores. Each individual story is unique but together they tell a larger story about our world – what we value, what we fear, how we can better understand each other and what it means to be human.
Shareholders meet new strawless lid and compostable, recyclable cup prototype
10:57 a.m. PDT
Michelle Burns introduced shareholders to the new Starbucks strawless cold drink lid that will eventually replace more than a billion straws a year.
The senior vice president of global coffee & tea said the new cold drink lid uses 9 percent less plastic than the former lid and straw combined and can still accommodate a straw, which will be available upon request, for those who need to use one. In July 2018 Starbucks announced it would phase out plastic straws from its more than 30,000 stores worldwide by 2020. The new lightweight, strawless cold drink lid will begin rolling out to stores in the United States and Canada this summer, an important milestone for eliminating plastic straws.
“We have made great progress over the year on sustainability practices and materials,” Burns said.
The new cold drink lid uses 9 percent less plastic than the former lid and straw combined and can still accommodate a straw, which will be available upon request, for those who need to use one, Corlett said. Starbucks is currently testing alternative materials to replace plastic straws as part of its goals to eliminate plastic straws by 2020 and to double the recyclability, compostability and reusability of its cups and packaging by 2022.
Burns also gave shareholders updates on other sustainability fronts, including progress on a “next-generation” cup, as the audience sipped Pike Place® Roast from a prototype cup that is both recyclable and compostable. Burns said over the next year, customers in New York, San Francisco, Seattle, Vancouver and London will help test several cups from the 12 NextGen Cup Challenge winners announced earlier this month – all cities that support both recycling and composting.
Starbucks initiated a collaboration called the NextGen Consortium last spring with partners such as McDonald’s, The Coca-Cola Company, Nestlé, Yum! Brands, Wendy’s and the World Wildlife Fund to not only explore next-generation recycling and composting technologies, but to work with municipalities to increase acceptance of these green cups.
Starbucks explores using technology to trace the coffee journey
10:50 a.m. PDT
Michelle Burns, senior vice president of global coffee & tea, previewed a coffee traceability feature for the Starbucks mobile app on stage at the Starbucks Annual Meeting of Shareholders Wednesday.
Eventually customers will be able to use the Starbucks mobile app to trace the journey of their favorite packaged coffees. Burns demonstrated the potential power of digital traceability on stage by scanning a bag of Pike Place beans, the coffee served in a tasting to those at the meeting.
The shareholders got to see the path of the coffee beans in their cup from where the beans were grown (farms in Colombia and Brazil) to where they were roasted (Kent, Wash.). Burns also showed how a technological traceability tool could potentially include information about brewing methods, ethical and sustainable sourcing and tips for brewing the perfect cup.
“Our passion and our love for coffee – from the ground our coffees come from, to the farmers who handpick the coffee cherries, to the expert coffee roasters who roast each bean to perfection, to the talented baristas who handcraft each beverage for the perfect cup – each step reflects both our Starbucks heritage and a unwavering commitment to a brighter future for our farmers, our partners and our customers,” Burns said.
A year ago, Starbucks announced the company’s commitment to developing innovative technology platforms to understand the potential for farmer empowerment and to connect customers to the journey of their favorite coffees.
The world’s largest Starbucks run
10:45 a.m. PDT
Attendees sip Starbucks Pike Place Roast during a coffee tasting led Michelle Burns, senior vice president of Global Coffee and Tea at Wednesday’s shareholders meeting in Seattle. Because what would a meeting be without coffee?
Coffee tasting by the numbers
- 13 pouring stations
- 104 pounds of Starbucks Pike Place® Roast coffee
- 162 hawking trays
- 265 volunteers
- 2,608 short cups
Nurturing the next generation of coffee farmers
10:38 a.m. PDT
A short film highlighting a fourth-generation coffee farmer in Guatemala shows the importance of continuing support for family farms around the world. Learn more and watch it here.
Looking toward the financial future
10:35 a.m. PDT
Pat Grismer, Starbucks chief financial officer, took to the stage at Wednesday’s shareholder meeting in Seattle to talk about the company’s future growth expectations.
Grismer, who joined the company four months ago, said he’s “thrilled” to share the company’s growth outlook.
Fiscal year 2018 showed that the strategies the company is implementing to sustain growth and build long-term shareholder value are working, he said.
“With the improving business momentum in the last quarter of the year, Starbucks grew revenues by 10 percent to a record $25 billion, fueled by 7 percent grown in our global retail store base,” he said.
And looking ahead, “we envision a new phase of growth for Starbucks … what we call ‘growth at scale,’” he said. “… We are continuing to grow rapidly, and we are investing behind that growth, demonstrating our belief in the power of our brand and it’s untapped potential globally.”
The company is committed to paying a meaningful dividend, he said. “We target an earning payout ratio of approximately 50 percent, which has generated a dividend yield of about 2 percent recently, which is quite competitive for a company with our growth profile.”
In the last year, the company committed to return $25 billion of shareholder capitol over a three-year period, fueled by actions to streamline the company, monetize assets and optimize our capital structure, he said.
“I am pleased to announce today, an additional accelerated share repurchase plan of $2 billion, which we expect to complete by the end of June 2019,” he said. “This puts us on a path to deliver over 80 percent of our $25 billion shareholder capital return commitment by the end of this fiscal year.”
In closing, Grismer told the audience, “You are the most important part of our business. We expect to continue to earn your trust and support by growing this great company and delivering strong operating results.”
Starbucks invest in fund that supports brands like Tesla, Uber, SpaceX and Starbucks
10:29 a.m. PDT
Starbucks ceo Kevin Johnson announced the company will make a $100 million investment in the Valor Siren Ventures I L.P. (VSV) to accelerate its innovation agenda. VSV is a private equity investment firm that was an early investor in Tesla, Uber, Eatsa and SpaceX. Johnson said the fund will identify and invest in companies developing technologies, products and solutions in food and retail.
In addition to the Starbucks anchor investment of $100 million, VSV will raise an additional $300M from other investors to round out this fund, Johnson said on stage at Wednesday’s Annual Meeting of Shareholders in Seattle.
“This action reinforces our belief that innovative ideas are fuel for the future,” Johnson told shareholders.
Increasing the velocity of innovation is an important part of streamlining the business and key to building an enduring company, Johnson said.
“We have done this by shifting from a long-cycle innovation model – which was too slow – to one that enables us to go from idea to action in less than 100 days,” Johnson said. “Then we rapidly learn and adapt, learn and adapt.”
The company has also shifted to smaller, cross-functional teams and opened a new Tryer Lab, a space for rapid ideation, prototyping and action.
Taking the long view, building an enduring company
10:27 a.m. PDT
Each morning at 5 a.m., said Starbucks ceo Kevin Johnson in his opening address, the leadership team studies daily sales report. Monthly, they do a deeper dive into business performance and quarterly publish financial results and host an investor call.
“All of these activities are important,” he said at the Annual Meeting of Shareholders on Wednesday, “but let’s be real … these are all short-term milestones… Today, we want to focus on the long-term and how, together, we are building an enduring company.”
The company was founded in 1971. Now, 48 years later, Starbucks has 30,000 stores, 380,000 partners and serves 100 million customers a week.
“I pose a question: what does it mean to build an enduring company?” he said. “… It takes a long-term view and a long-term commitment.”
He said it takes:
- Staying true to our mission and values
- Embracing new ideas and innovating in ways that are relevant to our customers, inspiring to our partners and meaningful to our business
- Inspiring the believers, people who believe Starbucks has a purpose that goes beyond profit. “Believers who approach the world with an attitude of optimism and the pursuit of doing good,” he said.
Johnson talked about seeing how Starbucks touches the lives of coffee farmers around the world, notably a fifth-generation family farm in Costa Rica where he heard the grandfather tell the story of their family farm.
“As I listened, I watched the 7-year-old boy as he looked to his grandfather with pride. An enduring company will be there for this 7-year-old boy when, one day, he takes over that farm and cares for his family.”
Kevin Johnson, ceo, welcomes the crowd
10:18 a.m. PDT
Kevin Johnson, Starbucks chief executive offer, took to the stage to applause from the audience as the Annual Meeting of Shareholders kicked off.
“Today is also a special day for me,” he said. Ten years ago, at the Annual Meeting of Shareholders, he officially joined the board of directors. He introduced the current board, and separately, asked Starbucks partners and veterans, active duty military and military spouses in the audience to stand and be recognized.
“We are so pleased to have all of you here as we celebrate the past year while looking forward to the future,” he said.
Johnson noted it’s been a year of transformation for Starbucks.
“It was also a year in which we delivered record revenue and watched our stock price hit an all-time high,” he said to applause.
“A different kind of company” video opens show
Behind the curtain: More Star Trek than Starbucks
9:43 a.m. PDT
Backstage at the digital production center, things look more Star Trek than Starbucks. It takes 43 monitors, dozens of computers, three cameras, and miles of cable to power the auditorium’s 12 displays, including the 66-foot screen onstage.
Up before dark: Scenes from the line
9:14 a.m. PDT
It was still dark when Debbie Lehrberger woke this morning to get ready for the Starbucks Annual Meeting of Shareholders at WaMu Theater in Seattle. By 5 a.m. she was in line – the first in line, in fact.
Four thousand people are expected to attend the event, which begins at 10 a.m. today. “I like hearing what Starbucks is doing around the world,” said Lehrberger, who is marking her fifth annual meeting.
Farther back in the line were Heather Battaglia and her 11-year-old son, Salvatore. This year he used some of the money he’d saved to buy stock in the company. His mom pulled him out of school today to attend his first annual meeting.
“Kids should be exposed to this,” she said. “It’s a global learning experience. It opens children’s minds to everything.”
Salvatore said he wasn’t sure what to expect today but he was eager to learn more about the company. He goes with his mom regularly to Starbucks in Madison Park, near where they live, where he likes to get hot chocolate or a Caramel Frappuccino. They are usually accompanied by their 200-pound Great Dane, who has become a bit of celebrity there. “We call it Dogbucks,” Salvatore said.
The deeply personal reason one partner traveled 2,400 miles to Annual Meeting
8:42 a.m. PDT
David Bradley paused in front of the Siren on the Starbucks sign from the very first store, now hanging at the Starbucks Support Center, the company’s headquarters in Seattle. He’d traveled a long way to come home to her.
Bradley, 26, is a Starbucks shift supervisor in Hendersonville, Tenn., who flew across the country at his own expense to attend the Starbucks Annual Meeting of Shareholders on Wednesday.
“I’ve always loved the culture of Starbucks and I wanted to experience the connection,” he explained. “It’s kind of like having communion.”
On Tuesday, he stopped by the SSC, where he saw the company’s first coffee roaster, the cupping room where each lot of coffee is tasted before being sold, the honor wall bearing medallions of partners who have served in the military and the massive sign, hanging in the building’s sunlit atrium bearing the company’s mission: “To inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.”
It’s a mission that means something to him, from a company that has nurtured him, he said. Five years ago, not long after he began working for Starbucks, he experienced a crushing depression following a breakup. He was overcome with the thick weight of depression and paralyzed by anxiety.
Medications didn’t work for him and he took a leave of absence from the company while he went to therapy and tried to extricate himself from the despair. When he was feeling better, he returned to Starbucks. “I knew I had a job that was still there for me,” he said. “If I didn’t have that opportunity to (take time off) and be human, I’d be in a different place now.”
A lot of people don’t talk about mental health issues, but Bradley believes it’s important to be honest about his own journey. It invites others to be open too. Transparency is a good leadership trait, he said. It’s one of the things he’s learning now as he’s working toward a bachelor’s degree in organizational leadership in Arizona State University’s online program through the Starbucks College Achievement Program.
He’s in a very different place now than he was all those years ago. He’s made the Dean’s list for the last two quarters, earning a 4.17 last quarter.
“I want to show partners that you can achieve anything you care about,” he said.
He’s engaged to a woman named Sabrina, whom he cherishes being with, and is focused on learning and growing. Attending the shareholders meeting is part of that. He’s pushing himself outside his comfort zone to do something different.
He’s part of an online meetup group of dozens of Starbucks partners who are coming from around the country to attend the meeting. Wednesday, they began their day with a coffee tasting and then headed to WaMu Theater south of downtown Seattle to find seats. He’s excited to hear what the company leaders will say from the stage, but he’s the most excited about connecting with others, he said.
“I figured going to the annual meeting was the biggest opportunity to meet the most amount of people and experience the most amount of conversations I can have and listen to,” he said. “It’ll be an expansive experience.”
Walk through like a shareholder
8:35 a.m. PDT
Volunteers at the shareholders event prepare the lobby experience moments before doors open at the WaMu Theater in downtown Seattle. For meeting-goers there are espresso beverages, Teavana teas, Princi pastries and an interactive coffee-bean drying and raking walk-through experience.
Meeting’s new venue: WaMu Theater
7:45 a.m. PDT
This year’s annual meeting will be its first at a new venue in more than a decade. After years of overflow crowds in the 2,900-seat auditorium at Marion Oliver McCaw Hall, the event has moved to WaMu Theater with its seating for up to 3,900 attendees. The location is also a bit closer to home – less than a mile from Starbucks headquarters in Seattle’s SoDo neighborhood.
6 a.m. PDT
Press Release: CEO: How we’re building an enduring company
“Our long-term plan for growth with focus and discipline is built on the acknowledgement that the pursuit of profit is not in conflict with the pursuit of doing good. We are a part of millions of people’s everyday lives around the world, and I believe we are uniquely positioned to be one of the most enduring brands of all time.”
A ticket as hot as the coffee
6 a.m. PDT
The first Starbucks annual meeting in 1993 was just a small gathering in a downtown Seattle hotel conference room, with a slide presentation and stack of tri-fold brochures. For the next few years it was hosted at the company’s new roasting plant in Kent, Wash., where rows of folding chairs lined the loading dock’s concrete floors. By 1998 the meeting went uptown, occupying the grand stage at the historic Paramount Theater for a year before moving to the Seattle Symphony’s home at Benaroya Hall from 1999-2003. Marion Oliver McCaw Hall hosted the event from 2004-2018 and was the scene of many of the event’s most iconic moments. Starbucks coffee was once even piped down to the stage from the top of the Space Needle.
Here’s a look back at Starbucks annual meetings over the years:
Feeling green
6 a.m. PDT
More than 350 Starbucks partner volunteers bring the annual meeting to life, greeting guests, and of course – serving coffee.
Putting the ‘star’ in Starbucks
6 a.m. PDT
There’s a buzz in the early morning air as attendees wonder about this year’s surprise musical guest. The meeting has featured performances by such legendary artists as Tony Bennett, John Legend, Sheryl Crow and Alicia Keyes. Paul McCartney once even greeted guests live from London via satellite. Here’s a look back at just a few of the many memorable moments.
