Howard Schultz brought an Italian-style cafe experience to the United States. When he took over Starbucks (SBUX), the company was simply a roastery, offering coffee beans for sale and not even selling the beverage by the cup.
In his time as the company's CEO, Schultz not only taught Americans about espresso-based beverages like cappuccinos, macchiatos, lattes, and other classics. He also, somewhat more controversially, changed the definition of what coffee is.
Schultz made coffee accessible by adding flavored syrups and other innovations like cold foam that made coffee, well, less coffee-like. Starbucks under Schultz innovated in ways that went well beyond coffee. It created the Frappuccino, a frozen beverage that managed to retain the creamy nature of coffee with milk or cream despite it being made with ice.
By broadening the appeal of coffee (or coffee-ish) beverages, Schultz put a Starbucks on seemingly every corner in the U.S., and sometimes two across the street from each other in larger cities.
Now, as he prepares to cede the CEO job for a third (and presumably final) time to Laxman Narasimhan, Schultz has promised one last major surprise to fans of the brand.
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Schultz Won't Actually Be Leaving This Time
The last time Schultz left the Starbucks CEO job, he actually moved into an executive chairman role. The plan was that he would stay active, helping the company grow its premium brand by building Roastery locations and Premier stores.
Unfortunately, new CEO Kevin Johnson did not believe that Starbucks should be heavily investing in that area. Instead, he wanted to focus on operations and improving the chain's efficiencies.
Those moves proved prescient during the pandemic when Starbucks was able to shift to a delivery, drive-through, and pickup model while its drive-throughs were closed. Johnson, however, "retired" abruptly in March 2022, which allowed Schultz to make his brief return and likely select a successor he's more likely to share a vision with.
This time, Schultz won't be executive chairman, but he will remain on the board of directors. And, the long-time, three-time CEO will also give the chain's fans a parting gift.
Schultz Has Made a Big Promise
Starbucks traces its lineage back to Italy, where the company currently has dozens of stores and a Roastery in Milan. Now, Schultz says the country has inspired him again. He shared those plans (sort of) during his final earnings call as CEO (for now, at least).
"Finally, while Starbucks has launched many successful coffee beverages over the years, my Starbucks journey will come full circle when I return to Milan later this month to introduce something much bigger than any new promotion or beverage," he said.
The outgoing CEO offered up some details, but few specifics as the call continued.
"While I was in Italy last summer, I discovered an enduring, transformative new category and platform for the company, unlike anything I had ever experienced. The word I would use to describe it without giving too much away is alchemy," he added. "We won't unveil details today, but it will be a game changer, so standby."
