Starbucks Taking a Cue From the Wine Industry: CEO
Americans continue to come to Starbucks for their caffeine fix. Now, the coffee chain is taking a cue from the wine industry to create rare high-quality coffees to further separate itself from the competition, CEO Howard Schultz told CNBC's "Closing Bell" on Wednesday.
"I am cautiously optimistic about the economy," the head of the world's largest coffee chain said. "Despite the unemployment, despite the debt, consumers are spending and we are enjoying the same level of success that we've enjoyed the last 12 months in the U.S. business."
Schultz said that February was a tough period as consumers adjusted to the 2-percent payroll-tax increase.
Starbucks plans to open at least 3,000 stores over the next five years in the Americas, half of which will be in the U.S. The coffee chain will also open 1,500 stores in mainland China by the end of 2015.
While the U.S. business is "quite strong," Schultz warned, "one has to be incredibly concerned about the fragile nature of Western Europe and what's happening in Cyprus and geopolitical issues that ultimately affect the United States."
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The chain is also looking for ways to continue to distinguish itself from competitors. On Tuesday, Starbucks said it bought its first coffee farm in Costa Rica. Schultz said the farm will be used as a model to teach other coffee farmers around the world high-end sustainable practices.
"We believe there's an opportunity to use technology and best practices to cross varietals, not unlike the wine industry with grapes, and create micro lots of very special rare, high-quality coffees," he said.
"This will be the beginning potentially of other acquisitions we will make…to put us in a better position not only in terms of supply but differentiation in terms of quality," Schultz said.
-By CNBC's Justin Menza
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