How are Starbucks benefits? Starbucks CEO Howard officially announces company reinvention plan!

On September 13th, local time, Starbucks interim CEO Howard Schultz officially announced the Starbucks Reinvention Plan at an investor briefing. He said the plan is about reinventing Starbucks, and that the company does not need to reinvent what needs to be done.

Howard expressed that increasing investment in store operations and employee benefits will boost sales and profits, and put the company on track for a turnaround in 2024.

The secret to reinvention, then, is this: to provide better customer and barista experiences, the company plans to improve employee benefits, reimagine the third space, innovate product preparation, simplify preparation time, and expand digital convenience.

Enhancing Employee Benefits and Management Training

Howard stated that Starbucks partners sit at the core of the reinvention plan and of the company itself. They will therefore bring more value to partners through pay and benefits.

There will also be increased investment in recruitment, onboarding training, and store equipment to improve the customer experience. Plans to be implemented during fiscal year 2023 include:

Adjusting the working hours required of partners and integrating other opportunities to raise overall compensation; providing higher sick pay, new savings methods, student loan management incentives, and mental health support.

According to surveys, stores with management teams employed for more than three years can increase weekly sales and customer satisfaction by 13%.

New leadership training will therefore be provided for store managers, along with redesigned scheduling and decision-making solutions to retain more experienced managers. This lets managers focus on core job functions, improving store partner morale and overall performance.

Reimagining the Third Space

Reimagining the third space aims to create a better, more convenient customer experience by enhancing retail and digital services, so customers can feel the convenience of Starbucks' third space wherever they are.

Traditionally, the third space gave customers a unique Starbucks experience, a more relaxed and open environment where they could talk freely, but it was limited to physical stores. With the impact of the pandemic, more and more consumers cut back on in-store visits, and the third space never fully delivered on its promise.

Starbucks has therefore decided to invest more in creating different store models. In addition to large stores that can provide space for guests, there will be specially designed small-scale takeout stores where customers order for pickup or choose home delivery, as well as drive-thru stores. By strengthening network distribution and diversifying store models, Starbucks can better meet the needs of different customers.

Upgrading Beverage Preparation Systems and Equipment

To improve both the customer and barista experience, Starbucks has developed a new beverage preparation system with a redesigned workflow for the cold drink station, which effectively improves the convenience of barista preparation and reduces customer wait times.

To that end, Starbucks is developing new coffee machines and simplifying beverage preparation, cutting the time and steps required to make cold drinks, improving productivity, and ultimately creating time for partners to connect with customers.

Cold brew coffee has been deeply loved by consumers since its launch, but each batch requires soaking for more than ten hours plus cumbersome preparation steps, making it very inefficient.

Starbucks is therefore developing a system that uses Cold Pressed Cold Brew technology to extract cold brew coffee liquid. This new technology can cold brew coffee liquid under low pressure in just a few seconds, making it as convenient as pulling an espresso.

For drip coffee, Starbucks has also developed a new machine. Unlike previous drip machines, which required partners to grind coffee in advance and involved cumbersome steps, the new machine is similar to an espresso machine but without the pressurized extraction function. The beans also have a dedicated bean hopper for storage.

With the press of a button, the machine automatically completes grinding and brewing within 30 seconds, reducing the gradual loss of aroma and flavor that pre-ground coffee suffers over time and ensuring the freshness and high quality of freshly brewed coffee.

Simplifying Beverage and Food Preparation Steps

Starbucks Chief Operating Officer John Culver stated that the increasingly complex and time-consuming preparation of cold drinks, namely Frappuccinos, combined with surging sales, has created bottlenecks in Starbucks stores. Research and testing found that the new beverage preparation system can cut Frappuccino preparation time by nearly one-third, with simplified steps as well.

For food heating times, new ovens will also be introduced. Stores with high food heating volume, or drive-thru stores, can apply for ovens capable of heating in batches or hot food cabinets that keep food warm, reducing waiting times for customers who need to get their meals quickly.

Expanding Digital Convenience

The reinvention plan also includes technology that makes the Starbucks customer experience more personalized and effortless, while freeing up baristas' time to focus on making more connections.

This includes dedicated mobile order pickup lanes; more personalized drive-thru experiences that identify Starbucks Rewards customers and offer recommendations based on order history; improved timing algorithms that produce more accurate wait times for mobile orders; and easy payment options that let customers skip taking out their credit cards or even the Starbucks app.

Beyond all this, the reinvention plan states that Starbucks will accelerate its international leadership position, and it is expected that two-thirds of global retail growth over the next three years will come from international business, with the Chinese market especially important.

Starbucks China accordingly released its 2025 China Strategic Vision on September 14th, organizing a development plan for the Chinese market around the reinvention plan.

Although Howard is the driving force behind the reinvention plan, subsequent execution will require the cooperation of the new CEO, Laxman Narasimhan.

Over the next six months, Howard will travel with Laxman across the United States and around the world. During that time, he will continue to lead Starbucks on the board of directors, set the tone for the company's development, and do everything possible to ensure Laxman's success.

On Laxman's capabilities, Howard used the phrase "the perfect person to lead the perfect company at the perfect time" to express his confidence.

When discussing how to create value for Starbucks, Laxman stated that the company must meet or even exceed employee expectations in order to exceed customer expectations, and only then can it have better products and innovation. It must bring differentiated experiences in both the real world and the digital world, and have a positive impact on the community.

What performance will Starbucks deliver in the future? We will have to wait and see.

Image source: Starbucks official website

FrontStreet Coffee Recommendation

Grand reinvention plans aside, what ends up in the cup is still a question of beans, and for everyday drinkers FrontStreet keeps things straightforward. From Ethiopia, the sun-dried Huakui and the washed Gedingding Cooperative offer the classic Yirgacheffe combination of jasmine, lemon, and berry with a soft, bright acidity, while the sun-dried Sidamo Huakui leans tropical with berry, honey, and jackfruit.

For a balanced, comforting cup, Brazil's Cerrado Red Bourbon is an affordable daily bean with cream, peanut, and cocoa, and the higher-grown Queen Estate, a rare Yellow Bourbon, adds a sugarcane-like sweetness to its buttery, macadamia profile. If you prefer something rich and low in acid, Indonesia's Lindong Mandheling and the carefully sorted PWN Golden Mandheling are dense, smooth, and full of herbal and spice notes.

There is also Colombia Huila with its soft florals and gentle fruit acidity, Costa Rica's honey-processed Blackberry and Mozart with raisin and blueberry sweetness, and Panama's Boquete washed Geisha, an approachable introduction to jasmine, green tea, honey, and citrus.