December 9, 1996

Starbucks: Inside the Coffee Cult


Not unlike the cultural blitz of personal computing, Starbucks has created one of the great marketing stories of recent history, and it's just getting started. The company manages to imprint its obsession with customer service on 20,000 milk-steaming, shot-pulling employees. It turns tattooed kids into managers of $800,000-a-year cafés. It successfully replicates a perfectly creamy caffè latte in stores from Seattle to St. Paul. There is some science involved, and one of the primary labs happens to be Starbucks' employee training program.

I'm attending the indoctrination seminars to learn about being a "barista," in addition to learning how a small Seattle specialty retailer has become a national phenomenon. Olivia, one of my instructors, kicks off "Brewing the Perfect Cup at Home" by having us read aloud the above-quoted history of coffee in America. Olivia's job today is to drum into our heads the need to educate customers in proper coffeemaking techniques. Customers must be reminded to purchase new beans weekly; to understand that their tap water might not do those beans justice ("You wouldn't want to make coffee with unpleasant-tasting water any more than you'd want to make a milk shake from sour milk," lectures the manual); and to never, ever let coffee sit on a hot plate for more than 20 minutes. In these ultra-earnest training sessions it is sometimes tempting to shout, "Good God, people, it's just coffee!" But this is Starbucks, and it's not just coffee: This is double-digit earnings growth and retail history in the making.

"Brewing the Perfect Cup" is one of five classes that all "partners," as employees are called, must complete during their first six weeks with the company. In San Francisco these days, Starbucks is running the classes back to back; it is bringing on 300 to 400 people nationally every month. You'd have to live in a pretty unchic place--say, the state of Utah--not to notice that there are Starbucks popping up all over. This year the company, which does not franchise, has opened a new store every business day, and it will unveil another 325 in fiscal 1997.

Olivia supervises a fluorescent-lit room set up to resemble a Starbucks store so that partners can practice "calling" (you know: "triple-tall nonfat mocha") and making drinks. I quickly learn that Starbucks is a company with a lot of rules, and all partners have to memorize them. Milk must be steamed to at least 150° F. but never more than 170° F. Every espresso shot must be pulled within 23 seconds--or tossed. Getting it all down is one goal of the training program. But it is far from the only one.


Starbucks is a smashing success, thanks in large part to the people who come out of these therapy-like training programs. Annual barista [employee] turnover at the company is 60%, compared with 140% for hourly workers in the fast-food business. "I don't have a negative thing to say," says Kim Sigelman, who manages the store in Emeryville, California, of her four years with the company. She seems to mean it.

It has become boilerplate public relations for corporations to boast about how much they value their people. But Starbucks really does treat its partners astonishingly well. The pay--between $6 and $8 an hour--is better than that of most entry-level food service jobs. The company also offers health insurance to all employees, even part-timers. And then there are the stock options. The fact that most baristas leave before a single share vests makes it an affordable proposition, but still, it's an unusually generous policy. Yes, it's also self-serving: The temperature of every latte and the cachet of the "Starbucks experience" are entirely in the hands of these partners.