July 19, 1953 is the birthday of Howard Schultz, the entrepreneur who bought a small Seattle chain of stores selling gourmet coffee and tea, named for a character in Herman Melville’s novel “Moby Dick,” and in short time transformed it into the world’s largest chain of coffee bars. Today, Starbucks has 21,000 outlets worldwide and is worth about $60 billion on the stock exchange. Schultz remains deeply involved in its operations as both chairman and CEO.
Howard Schultz was born in 1953, in Brooklyn. He grew up in the working-class neighborhood of Canarsie, where the family lived in the public Bayview Houses. His father, Fred, was an army veteran with a high-school education who held a variety of jobs, including driving a truck for a diaper service. His son has described him as frustrated and beaten down by his constant lack of financial security. His mother, Elaine Schultz, was a full-time mom.
A very short career in football
At Canarsie High School, Howard excelled at sports and received a football scholarship to attend Northern Michigan University. During his first week of practice, however, his jaw was broken, and his football career ended. But Schultz remained at the school, graduating in 1975 with a bachelor’s degree in communications.
Schultz worked as a sales person for Xerox Corporation, before getting a job in 1979 as manager of the U.S. operations of a Swedish houseware manufacturer called Hammarplast. As the legend goes, he noticed that, among many large retail clients, a small chain of coffee-bean stores in Seattle was ordering an inordinate number of drip-coffee makers, and he resolved to drop in on the company during his business travels.
When he walked into the original Starbucks Coffee, Tea and Spices – a company that had been started in 1971 by three graduate-school friends – he felt like he had come home. He met and befriended Jerry Baldwin, the remaining partner who now ran the six-store chain. A year later, in 1982, he joined the company as its sales manager. He and his new wife, Sheri Kersch, gave up a comfortable home in Manhattan and moved to Seattle.
Starbucks sold roasted coffee and tea leaves, and its owners, having briefly also offered brewed drinks at their stores, had no interest in becoming a restaurant chain. But during a trip to Milan in 1983, Schultz encountered the Italian neighborhood espresso bar for the first time, and became focused on the idea of turning the company’s stores into cafés. His bosses demurred, but with their encouragement, in 1986, he founded his own café chain, which he called Il Giornale – in tribute to the Milan newspaper. Within two years, when the original owners decided to focus on another brand they owned, Peet’s Coffee, he came back and bought the original company.
A company with a soul
That was in August 1987. Schultz immediately began to grow the chain aggressively: By 1989, four outlets had become 46, all company-owned (rather than franchises); in 1992, the company went public.
Under Schultz’s leadership (his degree of involvement has varied significantly over the years, particularly during the brief period in the early 2000s when he owned what was then the Seattle SuperSonics basketball team – a time he has termed a “nightmare”), the firm has embraced various progressive causes, including same-sex marriage, civil rights and even the carrying of Fair Trade coffee. It famously offers health insurance to all employees.
Schultz neither hides nor makes apologies for being Jewish, and in 1998 accepted an award from the Orthodox-outreach movement Aish Hatorah. When it comes to Israel, though, his company nimbly steers away from saying anything remotely political. Nonetheless, Starbucks has frequently been regularly attacked by both “pro” and “anti” Israel groups, which accuse it of holding positions it has carefully avoided assuming.
What is true is that Starbucks opened six branches in Israel in 2001 – and closed them all down after two years, because of the tough business climate, the company explained. And that its 20,000-plus outlets worldwide include many in the Gulf states and Egypt.
And as Howard Schultz continues to seek imaginative ways to keep Starbucks ahead of the curve, let’s raise a Grande cup of Pike’s Place Roast to the man who put it all over the map.
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