In just two weeks, Starbucks CEO Howard Schultz will step down from his post as CEO to focus on the company's premium brand, Starbucks Reserve.

As a fan of the company, I originally thought this was a horrible idea. I mean, the last time the man stepped down, the company slipped into a free fall until Schultz was forced to take the reins again in 2008. Since then, though, Schultz has brought his vision of "the third place," where people come between work and home, to fruition. And love it or hate it, he's built the world's largest coffeehouse in the process.

As head of Starbucks Reserve, Schultz's goal is to nurture consumers' desire for a new, premium coffee experience.

All of this began with a vision some eight years ago, when Schultz scribbled the words "the Willy Wonka of coffee" in his journal. In 2014, Starbucks opened a 15,000-square-foot Mecca of coffee in Seattle, known as the Starbucks Reserve Roastery and Tasting Room. Here, top baristas roast special blends of coffee, and then brew them using a variety of methods.

Beware, though: The premium experience is accompanied by a premium price. (One 12-ounce cup of coffee which uses a process of brewing involving a siphon costs $12.) But as the specialty coffee market continues to rise, market research indicates that premium, high-quality coffee is a fast-growing trend that's not likely to go away.

Retail expert Bryan Pearson compares the luxury coffee market to "the craft cocktail lounge and its respected mixologists."

"To maintain its target customer base, the Roastery will have to transport them to a new café plane--an opulent environment that can be justified as a personal indulgence," writes Pearson in Forbes. "That justification is achieved by stimulating the senses in purely emotional ways ...The location's atmosphere--the way it makes its visitors feel--must justify the higher price tag."

So far, it seems to be working. Pleased with sales at the original Starbucks Reserve in Seattle, the company now has plans to open 20 to 30 more Roasteries over time (with locations in New York City, Shanghai, and Tokyo), as well as 1,000 smaller "Reserve" stores that are similar in look and feel (although without the on-site roasting).

The man in charge is optimistic.

"This is the beginning of creating a new brand of rare and exotic coffees," explains Schultz, enthusiastically.

"Everything we've ever done to this point has led us here. This is the moment of the next generation of Starbucks."

Published on: Mar 20, 2017
Like this column? Sign up to subscribe to email alerts and you'll never miss a post.