Howard Schultz: From Brooklyn Housing Projects to Global Coffee Icon

Howard Schultz, born on July 19, 1953, is an American businessman and author renowned for transforming Starbucks from a regional coffee bean store into a global coffeehouse chain. He served multiple stints as CEO, demonstrating visionary leadership and a commitment to both business and social causes.

Early Life and Education

Born in Brooklyn, New York, to Ashkenazi Jewish parents, Fred and Elaine Schultz, Howard Schultz spent his early years in the Bayview Housing projects in Canarsie. His father, a World War II veteran, worked various blue-collar jobs, while his mother was a receptionist. The family faced financial struggles, which instilled in Schultz a drive to escape poverty and achieve success.

Schultz excelled in sports and earned a football scholarship to Northern Michigan University (NMU). He graduated in 1975 with a Bachelor of Arts/Science degree in communications, becoming the first in his family to graduate from college. He was a member of Tau Kappa Epsilon fraternity. To finance his education, he took out loans and worked part-time during the school year and full-time in the summer.

Early Career

After college, Schultz briefly worked at a Michigan ski lodge before joining Xerox Corp. in a marketing and sales role in 1976. He later joined Perstorp AB, a Swedish company, as vice president and general manager of its American subsidiary, Hammarplast USA, at the age of 26. Hammarplast was a housewares company based in New York.

Discovering Starbucks

Schultz's connection with Starbucks began when the Seattle coffee bean store ordered a large number of coffeemakers from Hammarplast. Intrigued, Schultz visited Starbucks, which at the time only sold coffee beans and brewing accessories, offering free samples to customers. He was impressed by the owners, Gerald Baldwin and Gordon Bowker, and their passion for coffee.

Read also: Tuition and Fees at Howard

Joining Starbucks and the Italian Inspiration

In 1982, Schultz joined Starbucks as the director of retail operations and marketing. A pivotal moment occurred during a buying trip to Milan, Italy, in 1983. Schultz was captivated by the Italian coffee culture and the prevalence of coffee bars. He envisioned bringing the Italian café experience to America, where customers could enjoy espresso beverages in a welcoming atmosphere.

Il Giornale and the Acquisition of Starbucks

However, Starbucks' executives were not initially receptive to Schultz's idea of selling brewed coffee. Undeterred, Schultz left Starbucks in 1985 and founded his own coffee company, Il Giornale, which meant "the daily" in Italian. He replicated the Italian coffee bar experience and spent the next two years growing his brand.

In 1987, Schultz acquired Starbucks, which had six stores at the time, for $3.8 million. He merged the companies and became CEO of Starbucks, implementing his vision of offering fancy coffee drinks and creating a welcoming environment for customers. He quickly reorganized the coffee shops according to his vision, adding drinks such as espressos, cappuccinos, lattes, and iced coffees to the menu.

Starbucks' Growth and Success

Under Schultz's leadership, Starbucks experienced phenomenal growth. He focused on creating a "third place" - a gathering spot between home and work - where customers could relax and socialize. He also prioritized employee training and benefits, offering health insurance and stock options to both full-time and part-time workers, whom he called partners. This was motivated by his father's lack of health insurance when injured.

Starbucks became popular, and the company added thousands of stores worldwide, growing its empire to be worth more than $2 billion into the early 2000s. Schultz took the company public in 1992, using a $271 million valuation to double their store count.

Stepping Down and Returning as CEO

Schultz left Starbucks as CEO in 2000 to focus on other ventures, but he remained with the company as an executive of the board. He purchased the Seattle Supersonics basketball team in 2001. However, in the years that followed, the team struggled, and Schultz sold the franchise in 2006.

In 2008, Schultz returned as CEO to revitalize the struggling brand. He ordered the temporary closure of thousands of stores to implement a new training program, ensuring employees made perfect coffee drinks. The stores reopened, and the brand eventually regained success, more than tripling its profits by 2010.

Later Years at Starbucks

In late 2016, Schultz announced that he was stepping down as CEO effective April 2017. He remained executive chairman, focusing on the company's involvement in social causes and growing Starbucks Reserve, the company's premium brand.

Schultz retired from his role as executive chairman, becoming chairman emeritus, in 2018. In 2022, he returned to helm Starbucks as interim chief executive when Johnson stepped down in April. Schultz stepped down again in March 2023 when Laxman Narasimhan took over as CEO. He retired from the Board of Directors in September, but Starbucks named him its lifelong chair emeritus.

Social and Political Views

Schultz has been an outspoken advocate for social causes. He supported same-sex marriage and opposed Seattle's ordinance to raise the local minimum wage to $15. He also launched initiatives to hire veterans, youths, and refugees.

Schultz explored a 2020 presidential bid as an independent candidate but ultimately decided against it, citing concerns that it would risk the re-election of Donald Trump. His positions on domestic politics are socially liberal and fiscally moderate. In foreign policy, he is seen as a "liberal hawk", favoring American-led international affairs and neoliberalism.

Controversies

Schultz has faced criticism for his anti-union stance. In 2022, the National Labor Relations Board (NLRB) ruled that he violated labor law by telling an employee that they could find employment elsewhere if they were unhappy with Starbucks.

His sale of the Seattle SuperSonics in 2006, which led to the team's relocation to Oklahoma City, damaged his popularity in Seattle.

Philanthropy

Through his Schultz Family Foundation, Schultz invests in training and hiring veterans and youths, helping veterans ensure a smooth transition back into civilian life. He also focuses on education and youth programs.

Legacy

Howard Schultz transformed Starbucks into a global phenomenon, with more than 35,000 stores worldwide. He created a unique coffeehouse experience and prioritized employee benefits, setting a new standard for corporate social responsibility. His books, including "Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time" and "Onward: How Starbucks Fought for Its Life Without Losing Its Soul," offer insights into his leadership and business philosophy.

Personal Life

Schultz is married to Sheri Kersch and has two children. His son, Jordan, is a sports analyst and NFL insider. As of October 2024, his net worth was estimated at $3.4 billion.

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