Starbucks aligns top management for growth abroad
Tuesday, July 12, 2011
PORTLAND, Ore. (AP) — Starbucks is realigning its top management to help drive its international growth.
The Seattle-based coffee giant said Monday that it is dividing responsibilities for its business into three global regions: Asia, the Americas and a combination of Europe, the Middle East and Africa. It now has two units, the U.S. and international.
The company has appointed three of its current executives to lead the regions.
Starbucks CEO Howard Schultz says the company’s financial performance has never been stronger and this move helps maximize its opportunities in key growing markets such as China, Brazil and India.
Starbucks has nearly 11,000 stores in North America and almost 6,000 in the rest of the world.
Starbucks hit a major slump in the recession due to changing consumer habits and its rapid overexpansion. It slowed its growth, cut jobs, closed stores and reorganized, and its sales in cafes have since rebounded and it is expanding its overseas and consumer products businesses.
The U.S. still generates most of Starbucks’ revenue. Nearly three-fourths of the $10.7 billion the company brought in during its most recent fiscal year was from the U.S. But Schultz said its international business eventually will produce at least half the company’s revenue. He didn’t estimate when.
Starbucks is one of many consumer products companies looking overseas for growth as the middle class populations in other countries expand. One of the “biggest prizes” in terms of pure growth, Schultz said in an interview with The Associated Press, is China. The company also plans to expand in India in its current fiscal year and in Vietnam the following year.
John Culver, who current leads the company’s international business, will serve as president of the critical China and Asia Pacific region.
Cliff Burrows, president of Starbucks U.S., will head the Americas business, which includes the United States, Canada, Mexico and Central and South America.
Michelle Gass, president of Seattle’s Best Coffee, was named president of Starbucks’ business in Europe, Africa and the Middle East.
Other changes announced Monday include adding Seattle’s Best responsibilities over to Jeff Hansberry, head of company’s global consumer products and foodservice business. Annie Young-Scrivner, global chief marketing officer, will also oversee its Tazo tea business.
“When we look at the global opportunities we have, I think it was time we restructure it and put our top talent on it,” Schultz said.
Starbucks said it will continue to push its consumer products, such as Via instant coffee, under the new management structure.
The company announced the changes to its employees Monday and said the transition would be complete by September.
“This takes full advantage of a significant global opportunity,” Schultz said.
Shares of Starbucks fell 59 cents to close at $39.76 but were unchanged in after-hours trading following the news.