There were no coffee bars, nor was there much of a demand for espresso-based drinks.
You purchased coffee beans and you either took them home as beans or we ground them for you in the store.
Nobody expected to get a beverage at a Starbucks coffee store until after 1980.
Hi, everybody.
My name is Shawna, and this is the American English Podcast.
My goal here is to teach you the English spoken in the United States through common expressions, pronunciation tips and interesting cultural snippets or stories.
I hope to keep this fun, useful, and interesting.
Let's do it.
Hi, everyone.
Welcome back.
Today's a feature episode.
It's an episode from the past that I've improved.
I've improved the audio quality and also updated some of the statistics.
Today, you'll hear the story of Starbucks.
You know Starbucks, right?
The coffee company?
Born in Seattle, Washington and brewed around the world?
I bet you do.
They have over 40,000 stores in over 80 countries.
I know some of you are thinking, oh no, not Starbucks.
But hear me out.
This story is interesting.
One, because it's an absurdly successful business.
How did they do it?
Two, it's about coffee.
And come on, who doesn't love coffee?
And three, you'll learn a bucket load of new vocabulary as we go.
So pay attention, make notes, and as usual, write your sentences after you're done.
Original sentences using new vocab and phrases.
The introduction to this audio was taken from the YouTube channel CNBC, in a video titled How Starbucks Became an 80 Billion Business.
I'll provide the link to that video on the episode webpage and also in the transcript.
Before we begin...
I'd like to give a big shout out to Picante Paolo and the other anonymous contributors who bought me coffee recently.
It's amazing.
You are amazing.
Thank you so much for your support.
A while back, I put a link in the episode notes that allows listeners to support this podcast through coffee.
It's kind of a funny way to contribute, but my daughters and I love it and we think of you guys when we indulge in ice cream and coffee and other nice treats.
I don't give coffee to my daughters, but you know what I mean.
Thank you so much.
I also appreciate everyone who has signed up to Premium Content.
With premium content, you get all of the bonus materials for seasons.
Seasons are chunks of episodes, so 50 episodes.
And in them you'll have exercises quizzes, shadowing exercises, the transcripts with notes and vocabulary explained.
There's just so much more.
So if you're interested in checking out premium content, Those links are also in the episode notes.
Once again, thank you all for your support.
Without any further ado, let's begin our talk about Starbucks.
It's a misty Saturday morning as you walk along the water towards Pike Place Market, the longest operating public market in the United States.
From the corner of your eye you can see fishermen pulling the latest catch off their boats.
Salmon lingcod, flounder and dungeness crab are just a few things found in the northern Pacific's icy waters.
The body of water to your left where the fishing boats are docked is called the Puget Sound, and it's an inlet that connects Seattle Washington to the Pacific Ocean and the rest of the world.
Seattle is a port city. and Pike Place Market is a necessary stopping point there.
It's more than just an elevated fish market.
It's where you go as a local or a tourist to buy fresh bread and flowers.
It's where you go to meet old friends and connect with new ones.
The thing is, Pike Place is to Seattle as the Coliseum is to Rome.
It's iconic, it's legendary and it's where the first Starbucks location opened, on a cold March day in 1971.
That's where you're headed, the original Starbucks.
You can see the humble storefront from a distance.
1912 Pike Place is the address.
Across its shaded porch is the Starbucks name written in caps.
In caps means in capital letters.
Across its shaded porch is the Starbucks name written in caps.
There's also nothing fancy about the facade, nor the 1,000-square-foot shop behind its front door.
The floors are aging, as are the countertops and the fixtures.
Yet, that little shop draws in thousands of customers daily.
People want to know where Starbucks began.
And that's the story you're about to hear.
Let's flash back to Berkeley, California in the 1960s.
If you studied American history, Berkeley might come to mind.
Berkeley was a hotbed of protests in the 60s.
Anti-war protests, civil rights protests, tree hugging.
There were a lot of drugs, new waves of music, and just a lot going on culturally.
It was a time, also, when coffee culture in the U.S. started to change.
A Dutch-American coffee importer named Alfred Piet was greatly responsible for that change.
Piet moved to Berkeley around that time, and funny enough, he deeply disliked American coffee.
He actually compared it to poor quality coffee that was rationed during World War II.
And there's sort of some truth to that statement.
Back then, coffee in the U.S. was freeze-dried in cans, or it was instant.
Pete opened a coffee shop in Berkeley in 1966 that took pride in specialty coffee.
Custom Coffee.
The shop's name you may know if you've been to the West Coast.
Pete's Coffee and Tea.
But he wasn't one to market his products.
However, he was a good teacher.
Alfred Pete eagerly taught any entrepreneur that was interested in coffee how to properly roast coffee beans.
He wanted to help them bring the flavor out.
Three of his very important pupils included Gordon Bowker, a writer, Gerald Baldwin, also known as Jerry Baldwin, and Zeg Siegel, a history teacher at a public school.
Three friends from the University of San Francisco and the founders of Starbucks.
So just picture it three guys in their 20s with their love of food, wine and dark roasted coffee hanging out with Pete, the specialist in that subject.
Soon enough, with their newly learned roasting skills, it was time to set up shop.
To set up shop means to open a business.
The three guys decided to set up shop in Seattle, Washington.
But first, they needed a name.
According to the Starbucks website, the founders were looking for a name that would quote suggest a sense of adventure, a connection to the Northwest and a link to the seafaring tradition of the early coffee traders.
At first, they thought of the name Cargo House, but it was shot down at the last minute.
The phrasal verb to shoot down means to reject.
Cargo House, the alternative name for Starbucks, was shot down.
Pequod was also shot down.
Pequod was the name of Captain Ahab's boat in the famous novel Moby Dick.
It isn't too appetizing, is it?
I think I'm going to grab a cup of coffee at Pequod's.
It's probably a good thing that name didn't stick.
That's when Terry Heckler, a friend of the founders, mentioned that business names starting with S-T are strong.
Starbo was the name of an old mining town near Mount Rainier, a mountain in Washington.
How about that name? a light went on at that moment in Gordon Bowker's head.
Aboard the Pequod in Herman Melville's famous novel.
There was Captain Ahab and his first mate Starbuck.
Starbucks it was.
When it came time to look for a logo, the founders searched for ideas also in seafaring literature, books about the ocean and adventure.
They came across a siren.
I'm not talking about sirens on police cars or ambulances.
Sirens are also mermaids, mermaids with two tails.
They're mythological creatures.
In most stories, sirens hang out near rocky shores where they sing hypnotic songs and lure in sailors.
To lure in, L-U-R-E, in, means to attract or tempt, usually offering something as a reward.
So these sirens would lure in sailors with their hypnotic songs and then let them crash along the rocky coast.
So the siren ticked all of their boxes.
First, it tied together the seafaring tradition to their Seattle location.
Remember, Seattle is a port city and by no means are coffee beans or spices grown there.
Number two, a siren lures in sailors.
The aim of Starbucks Coffee, Tea and Spices was to lure in customers, even sailors who were docked at the port.
Cool, right?
The year was 1971.
For the venture, for this business, each had contributed $1,500 each.
And as a group, they'd gotten a loan from the bank of $5,000.
Zeg was the only paid employee in the beginning.
Neither Bowker nor Baldwin had quit their day jobs.
For the first two years in business, they were roasting Pete's coffee beans.
No brewed coffee.
You couldn't order a cup of coffee to go, like you can today.
They just sold bags of whole beans, bags of spices.
You purchased coffee beans and you either took them home as beans or we ground them for you in the store.
Nobody expected to get a beverage at a Starbucks coffee store until after 1980.
Ten years in, things started to change.
There was this guy named Howard Schultz.
On his way back home to New York from San Francisco, Howard Schultz, who was a businessman, stopped in Seattle to visit Starbucks.
Starbucks was using a non-electric thermal coffee maker that Schultz's employers provided.
That's a mouthful, but yeah, he was basically supplying a product that Starbucks used.
In an interview by Guy Raz with Howard Schultz, which I highly recommend listening to, Howard explains that walking in felt like he was having an epiphany the coffee, the romance, the passion that people had.
The scene was extraordinary, and he immediately wanted to be part of it.
Everything about it, the product, the experience, the whole nine yards.
The whole nine yards means anything and everything.
He wanted to be part of the product, the experience, the whole nine yards.
Over the course of the next year, he convinced the owners that he would be an asset to the company.
And soon enough, he had to quit his job and was hired as the director of sales and marketing.
His first work trip?
He was sent to a trade show in Milan where he was representing Starbucks.
When in Italy, he noticed that coffee culture was everywhere.
Cafes, espresso bars.
Howard noticed that for Italians, this was a third place between work and home.
There, people would run into friends.
They'd chat.
There was a sort of elegance and style.
He describes it as having theater and magic.
In the U.S., at that time, coffee culture was not common.
It was entirely uncommon.
It didn't exist.
Americans drank coffee in the comfort of their own home or maybe at the office.
So Howard returned to the United States thrilled about Italian coffee bars.
But his enthusiasm wasn't reciprocated.
The enthusiasm wasn't returned.
The founders of Starbucks didn't want to sell brewed coffee.
They just wanted to sell bagged beans.
Schultz was a businessman through and through.
He had a background in cold calling.
He knew how to convince even the most skeptical people of a good idea.
So when the founders opened up a new location in downtown Seattle, they designated 500 square feet of it to Howard's Coffee Bar.
The result?
It made exponentially more money than any of the whole bean coffee or tea sold.
For Howard, that was a huge green light.
For the owners, not so much.
They actually said they didn't want to do it again.
A coffee bar business wasn't their jam.
It wasn't their cup of tea.
That wasn't the business they wanted for themselves.
That was in 1984.
Right.
So Starbucks had acquired Pete's Coffee.
Things were going well for them.
Howard was just confused.
He'd introduced lattes to Seattle and they loved them.
People craved their espresso bar.
People would keep coming back.
He had regulars.
Why wouldn't you want to open a thousand other shops just like it?
It felt like an obvious business opportunity that would be missed.
Of course he decided not to miss it.
He decided to leave Starbucks.
At this point in the story, Howard is just a young visionary.
He wanted to set up coffee culture in the United States.
So he opened a coffee chain called Il Giornale, which was the name of a newspaper in Milan.
Then, one day, out of the blue, Jerry Baldwin called him.
Remember, Jerry Baldwin's one of the founders of Starbucks.
He said he was headed to California...
He was keeping Pete's Coffee, and Starbucks was up for sale.
If Howard could come up with $3.8 million in 90 days, the six stores that existed would be his.
Howard was certain that he could come up with the funding.
About two months in, he'd raised about half of the $3.8 million.
And then Jerry called again.
Someone else, a competitive buyer, was willing to pay $4 million.
Howard was confused.
Like, why?
How?
What?
I thought I had 90 days.
It turns out the competitive buyer was actually one of the investors for Howard's Il Giornale chain.
He was distraught.
To be distraught means to be extremely upset.
What was he going to do?
One night, Howard was playing basketball with his lawyer, and after the game he laid out the whole story, explaining why he was so upset.
And the lawyer decided to do something for him.
He introduced him to someone important, William Gates Sr, Bill Gates' dad and co-founder of Microsoft.
His lawyer wanted him to retell his story about his dreams about his trip to Milan, all of the nitty-gritty.
He wanted him to share that, just to show how much he'd invested in Starbucks and just how much this opportunity was suited for him.
William Gates Sr. was moved by the story.
And after confirming that it was true, he told Schultz, let's take a walk.
Ten minutes later they were in a different office building, standing in front of the competitive buyer.
They had walked straight to the man who was willing to pay $4 million.
And William Gates Sr said You should be ashamed of yourself that you're going to steal this kid's dream.
That's not going to happen.
You and I both know this is not going to happen.
According to Schultz, after about 10 minutes of chatting he knew he was the one who would own Starbucks.
The other guy backed down.
You like options.
Oh, yeah.
Big options guy.
Sure, you'll buy a car once you've seen all your options.
All 45,000 of them.
Sedans, pickups, four-wheel drives.
They're all options when you're an options guy.
CarMax even has options for how you shop at home, online, or on the lot.
Want to buy your way?
Want to drive?
CarMax.
To back down means to accept defeat or withdraw from a claim that you've made.
If it wasn't for William Gates Sr., the other investor probably wouldn't have backed down.
That was in 1987.
In the first few years as CEO Schultz merged his Il Giornale stores with Starbucks, and his team invested a ton of money focused on fast growth.
Naturally, the first few years they didn't make a lot of money, but they did make a lot of mistakes.
Chicago was the first location outside of the Northwest and very few customers went to that new location the whole season because of one simple issue.
There was no internal entrance to the store.
Chicago in winter is cold and no one could muster up the courage to go out into the frigid cold, even if it was to buy a hot cup of coffee.
Eventually, growth kicked in.
By 1992, when the company went public, there were 165 stores in the U.S.
As a public company, the public, the people, can buy shares or stocks of your company.
In 1996, the first store opened overseas in Tokyo.
It was a huge success.
Today, the company boasts over 40,000 locations in over 80 countries.
From the surface, it looked like the perfect company.
But even Schultz admits that it was not.
He's been CEO three times over the past few decades.
He's needed to step down occasionally as CEO to blow off steam.
It gets stressful.
A lot of HR issues occur.
He admits that there was a downward spiral when growth was happening too fast.
That was back in 2007 to around 2009.
There were so many stores and not all of them were getting business.
The stock prices plummeted.
At one point, he didn't know what to expect when walking into a Starbucks.
Would the store smell of espresso beans or a new grilled cheese sandwich being sold inside the display case?
Could the barista properly make a latte?
It wasn't predictable.
However, as CEO, he's done a lot to bring the company back to life and has been criticized for a lot of it.
He's been criticized for closing approximately 900 stores overnight.
People said he was nuts when he invited 10000 store managers to a venue to reteach how Starbucks should be run.
That event cost him $30 million.
At the same time, he's applauded for being a great businessman.
Since 2009, stock prices have increased drastically.
He's also been recognized for his efforts to adopt fair trade principles and set up community building programs across the United States.
People like that stuff.
He claims that he's trying to build a company that people are proud to work at.
Not all blue-collar jobs in the US have benefits such as health care and educational compensation.
Starbucks does.
Over the years, the drink menu has gotten longer.
From the introduction of cold drinks like frappuccinos, iced coffees and teas to, and even now, the famous strawberry acai refresher, which went viral on TikTok.
Yet, as the drink list changes, the sizing stays the same.
Tall is a normal, coffee grande is a large and venti is apparently Italian for 20, because that drink is 20 ounces.
It's massive.
Today, the company owns its own farm in Costa Rica with 240 hectares, which is equivalent to 24 square kilometers.
That's where a lot of coffee research and development takes place.
Starbucks beans are not only sourced from Costa Rica.
They are from over 400000 farmers in 30 countries and from all three primary growing regions, regions where coffee can be grown.
So Central and South America, Africa and the Middle East, and Southeast Asia.
There are efforts to ensure that growth is sustainable and farming families are treated well.
If you are listening to this podcast, I would love to know if you've ever heard of a family, a farming family, that works for a Starbucks farm.
If so, I'm curious are they really following the standards of CAFE, C-A-F-E Coffee and Farmer Equity Practices?
Yeah, let me know. you can write to me at American English Podcast on Instagram.
Today, when you go to 1912 Pike Place, the first store, or first real store, I should say that served coffee.
You'll see the original logo out front.
It's a round emblem with the words Starbucks, coffee, tea, and spices in a circular formation.
And inside that, there's an image of a siren with her two tails and her bare breasts.
Over time, her hair was fixed to cover her breasts, the words were removed and the color of the logo was changed from brown to green.
That siren has been the face of the company.
The attractive woman, and I guess Howard Schultz, the man behind it, is Starbucks.
Howard Schultz has what we call a rags-to-riches story.
He grew up poor in the projects of Brooklyn, New York, and is now one of the wealthiest people in the world.
Over the years, there have also been rumors that he might run for president.
Imagine that.
So my question is, what's your relationship to Starbucks?
Most of us probably have a story.
I'm going to tell you mine.
When I was in middle school, the first Starbucks opened within walking distance from my house.
My friends and I often complained that we had nothing to do.
But when that Starbucks opened, that became our activity.
We'd walk there or have our parents drop us off, and we'd sit and talk for hours.
In summertime, we'd order frappuccinos.
In fall, pumpkin-spiced drinks were a must-have.
And in winter, we'd get hot coffee or peppermint hot cocoa.
Since we were using up our allowance.
So the money our parents gave us, we'd often split some sort of pastry or cookie or brownie and yeah, sit around for hours sipping on our drinks and nibbling on our food, until it got dark outside.
None of us were crazy about the coffee per se.
It was the experience.
Many of my students have complained that in the US, waiters and waitresses put the tab on the table before you're done eating or before you ask for it.
And because of that, they feel rushed.
I get that.
I agree.
And it's super annoying.
Starbucks was the first place I'd visited in my life that welcomed customers and let them sit.
They let them relax.
They let them have longer conversations and that set the bar for coffee shops to come.
There was a coziness to the environment.
The velvet chairs, Nora Jones playing on the speakers, decorations for the holiday seasons.
It did sort of feel like a third place, away from work and away from home, where we could meet up with people.
Actually, even in one of the articles I read, one of the former managers at the original Starbucks said that many proposals happen there.
So I have a feeling a lot of people have either met at Starbucks, had some sort of special memories, built relationships there.
Do you relate to this, or is there a different place that you can think of where your friends hung out?
Where'd you guys go?
Think about it?
Since high school i actually haven't been very often, despite the number of stores near my homes where I've lived.
I tend to try different coffee shops every time I go out and when I'm in the mood for a cup of joe.
A cup of joe is another way to say coffee.
But you know, if I want a taste of nostalgia, that tastes like a pumpkin spice latte, and I know exactly where to get it.
Hope you enjoyed that episode.
If you are interested in hearing more about Washington and the city of Seattle, be sure to check out the Discover Washington episode with my good friend, Philip Philip Clem.
That is episode number 127.
Have a good day and until next time, bye.
Bye. on AmericanEnglishPodcast.com.
Thanks and hope to see you soon.
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