Starbucks Corporation
Coffee retail and restaurantsFounded 1971- Updated June 2026
Reviewed by Swet Parvadiya
Last reviewed: June 2026
CorpDigest
Starbucks Corporation
Company History
Founded 1971 in Seattle, Washington
Last reviewed: 2026-06-03 · By Swet Parvadiya
Jerry Baldwin, Zev Siegl, and Gordon Bowker opened the first Starbucks store at Seattle's Pike Place Market in 1971, selling whole-bean coffee to customers who wanted to grind their own at home. The founders were coffee intellectuals more than business builders — they were fascinated by the craft of roasting and the quality difference between fresh-roasted beans and the pre-ground grocery store product that most Americans accepted without question. The store was a retail shop, not a café; no coffee was brewed for customers to drink on the premises.
Howard Schultz joined as director of retail operations in 1982 and traveled to Italy in 1983, where the espresso bar culture — the casual, social, standing-room coffee consumption of Milan's neighborhood bars — struck him as a model that had no equivalent in American retail. He proposed that Starbucks open espresso bars alongside its coffee retail stores. The founders declined. Schultz left in 1985, opened his own espresso bar concept called Il Giornale with Seattle investors, and two years later bought Starbucks from Baldwin, Siegl, and Bowker for $3.8 million when they decided to exit the business.
The growth from 1987 through the mid-1990s was driven by Schultz's conviction that Americans would pay a premium for a consistently good espresso-based beverage served in a comfortable space — a conviction that the coffee industry, the food service industry, and most market researchers thought was wrong. The 1992 IPO funded the national expansion that proved them wrong at scale: the "third place" concept — not home, not work, but Starbucks — captured a behavioral pattern that turned out to be universal.
The 2003 acquisition of Seattle Coffee Company and the 2012 Teavana acquisition extended the brand into adjacent categories with mixed results. Teavana's retail store closures in 2018 represented one of the first meaningful strategic retreats in the company's expansion history, and the 2022 unionization wave — which spread from Buffalo, New York to hundreds of stores nationally — marked the beginning of a period of labor relations complexity that legacy management had not experienced.
Jerry Baldwin was one of the three original founders of Starbucks and the strongest guardian of its early coffee standards. His contribution was product authority: sourcing quality beans, learning from Alfred Peet, and establishing a retail environment where customers could ask questions and discover specialty coffee. Baldwin helped keep the first Starbucks focused on roasted beans and equipment rather than prepared beverages, which later put him at odds with Howard Schultz's cafe ambitions. After Schultz acquired Starbucks in 1987, Baldwin continued in the specialty coffee world, including involvement with Peet's Coffee. His lasting influence is visible in Starbucks' continuing need to defend coffee credibility even as the company has become famous for customized beverages, mobile ordering, and seasonal products. The premium brand would have been weaker without Baldwin's original insistence that quality came first.
Zev Siegl co-founded Starbucks in 1971 and helped turn a specialty coffee idea into a functioning retail business. He contributed to early store operations, customer education, and the day-to-day systems needed to sell whole-bean coffee and equipment near Pike Place Market. Siegl left Starbucks in 1980, before Howard Schultz acquired the company and transformed it into a cafe chain, but his early work helped establish the educational tone that separated Starbucks from ordinary coffee sellers. After leaving, he remained active as an entrepreneur, adviser, and speaker, often helping small businesses understand startup discipline. His lasting influence on Starbucks is the idea that a coffee brand could teach customers rather than simply sell to them. That educational posture later helped the company justify premium pricing and build customer trust.
Gordon Bowker co-founded Starbucks and played a central role in the company's early brand identity. His specific contribution was storytelling: the name, tone, and sense of place that made Starbucks feel like a specialty merchant rather than a generic coffee seller. Bowker understood that premium coffee needed atmosphere, language, and memory, not only better beans. He remained involved during the early phase before Howard Schultz's cafe model changed the company's direction. Bowker later became known for other entrepreneurial and creative ventures, but his Starbucks legacy remains unusually durable. The company still depends on the emotional world he helped frame: coffee as travel, craft, origin, ritual, and personal identity. Even as Starbucks became global and digital, that original branding instinct helped the company sell a feeling around a cup.
Starbucks acquired Teavana to expand into premium tea globally. Tea represented a large category, especially in markets where coffee penetration was lower, and Starbucks wanted a broader beverage platform beyond espresso and brewed coffee.
Starbucks acquired Seattle Coffee Company, which included Seattle's Best Coffee, to gain a secondary coffee brand with lower-price and foodservice potential. The deal allowed Starbucks to reach channels where the main Starbucks brand might have been too premium.
Starbucks acquired Ethos Water to add a bottled water brand with a social-impact message around global water access. The product fit Starbucks' ability to sell premium packaged beverages at the cafe counter.
Starbucks acquired Coffee Equipment Company, maker of the Clover brewing system, to strengthen premium brewed coffee and differentiate store-level coffee quality. The deal supported Howard Schultz's push to restore coffee authority after the overexpansion crisis.
Starbucks acquired Evolution Fresh to enter cold-pressed juice and health-oriented beverages. The deal reflected management's interest in expanding beyond coffee into wellness and premium packaged drinks.
Starbucks acquired Bay Bread and the La Boulange bakery brand to improve food quality and increase food attachment to beverage purchases. The deal was intended to make Starbucks more credible in breakfast and bakery occasions.
Starbucks opened on March 30, 1971, at 2000 Western Avenue in Seattle, near Pike Place Market, founded by three University of San Francisco friends: Jerry Baldwin, an English teacher, Zev Siegl, a history teacher, and Gordon Bowker, a writer. The trio had been inspired by Alfred Peet of Peet's Coffee and Tea in Berkeley, California, who had been roasting and selling high-quality dark-roasted whole bean coffee since 1966. The original Starbucks store sold only whole bean coffee, tea, and spices, with no espresso bar and no brewed coffee for in-store consumption. The store was a wholesaler and retailer for premium beans roasted nearby, and the founders modeled their approach explicitly on Peet's coffee, even initially sourcing roasted beans from Peet's. The name Starbucks was chosen after the founders flipped through a list of possibilities, settling on a reference to the first mate Starbuck in Herman Melville's novel Moby-Dick. The original mermaid logo, designed by Terry Heckler, was inspired by sixteenth-century Norse woodcuts. The store moved to its current Pike Place Market address in 1976, where the original location still operates as a popular tourist destination.
Howard Schultz joined Starbucks in September 1982 as director of retail operations and marketing, hired by Jerry Baldwin after Schultz had been a sales representative for Hammarplast, a Swedish housewares company that sold drip coffee makers to Starbucks. On a 1983 buying trip to Milan, Italy, Schultz was inspired by the espresso bar culture of Italian cafes and proposed that Starbucks add brewed espresso drinks and a cafe-style environment, an idea that the original founders resisted because they considered Starbucks a coffee bean retailer, not a beverage seller. Schultz left Starbucks in 1985 to start his own coffee bar concept, Il Giornale, which opened in April 1986. When Jerry Baldwin and the other original founders sold Starbucks to Schultz in March 1987 for $3.8 million, financed largely through investor money Schultz had raised, the original Starbucks roasting operation was renamed Starbucks Corporation and merged into Il Giornale. The combined entity kept the Starbucks name, and Howard Schultz became chief executive officer of the new Starbucks Corporation at age 33. The Peet's Coffee business was retained by the original Starbucks founders and sold separately.
Starbucks went public on June 26, 1992, at a split-adjusted price of approximately $17 per share, raising roughly $29 million and giving the company a market capitalization of around $271 million at the IPO. At the time of the public offering, Starbucks had approximately 165 stores, almost all in the United States, primarily in the Pacific Northwest, California, Chicago, and a handful of other major cities. The IPO was led by Alex Brown and Sons and Wertheim Schroder, and was met with strong investor demand for what was then a fast-growing specialty retailer with a distinctive brand and clear unit economics. From the 1992 IPO through 2024, Starbucks grew to more than 38,000 stores globally, revenue of $36.18 billion in fiscal year 2024, and a market capitalization of approximately $92.9 billion. Multiple stock splits along the way have meant that an investor who bought at the IPO and held would have seen one share grow to several shares, with substantial total return on the original investment. The growth has spanned multiple chief executive officer transitions, multiple major brand revamps, and the development of the Starbucks Rewards loyalty program that drives much of the modern unit economics.
Starbucks opened its first international store on August 2, 1996, in Tokyo, Japan, through a joint venture with Sazaby League, which marked the beginning of an aggressive global expansion that has since reached more than 80 countries. The United Kingdom followed with the acquisition of Seattle Coffee Company in 1998 for approximately 50 million pounds. China opened its first store in Beijing in January 1999, the country that has since become the second-largest Starbucks market in the world by store count. As of 2024, Starbucks operates more than 38,000 stores globally, with the United States as the largest market at over 16,000 stores, China as the second-largest at more than 7,500 stores, and meaningful presences in Japan, South Korea, Canada, the United Kingdom, Mexico, Indonesia, the Philippines, and dozens of other countries. The China business has been the focus of intense attention in recent years as the local competitor Luckin Coffee has surpassed Starbucks in Chinese store count and undercut Starbucks on price, putting pressure on the company's growth and profitability in its second-largest market. Starbucks also operates Reserve Roastery flagship stores in Seattle, Shanghai, Milan, New York, Tokyo, and Chicago.
Starbucks Reserve is the premium tier of the Starbucks brand and the Reserve Roastery is the immersive flagship retail concept that the company has developed to showcase the Reserve product line and the broader Starbucks brand. The first Starbucks Reserve Roastery and Tasting Room opened in December 2014 at 1124 Pike Street in Seattle, occupying approximately 15,000 square feet with an in-store coffee roaster, multiple brewing methods, food service, an integrated retail merchandise area, and a coffee education experience. The Roastery concept was expanded to Shanghai in December 2017 at 30,000 square feet, the largest Starbucks store in the world at the time, followed by Milan in September 2018 inside the historic Palazzo delle Poste building, New York Reserve Roastery in December 2018, Tokyo Reserve Roastery in February 2019, and Chicago Reserve Roastery in November 2019. The Roasteries are essentially brand experience destinations that operate as flagship retail stores, often producing limited-edition coffees and food, and they have become tourist destinations in their cities. Reserve coffees are also sold at a smaller number of Reserve Bar locations and at select Starbucks stores worldwide as a premium up-sell beyond the core menu.