Schultz Bemoans Starbucks' Lost 'Soul'

Starbucks CEO Howard Schultz

hide captionStarbucks CEO Howard Schultz complained in an e-mail that the company's rapid expansion has hurt its original style.

Bill Pugliano/Getty Images

Starbucks CEO Howard Schultz is worried that his company's 13,000 coffee shops have lost their soul.

For example, in some stores the romance and showmanship of a handmade latte has been replaced by an automated espresso machine. And the aroma of freshly ground coffee beans is missing.

In a recent e-mail, Schultz urged his staff to make changes to evoke Starbucks' heritage and tradition.

But the e-mail struck some as contradictory and even duplicitous. While Schultz complained that rapid expansion had come at a cost, the company is actually accelerating that expansion.

"If you go back three or four years, they have upped their unit forecast several times," said Bob Goldin, executive vice president of Teck Nomic, a food industry research and consulting firm.

Goldin said Starbucks has increased it plans for new stores from a target of 25,000 to 40,000.

"That's kind of a staggering number," he said.

The company says about half of those stores will be in the United States, the rest abroad.

Meanwhile, development organizations are gathering petitions to pressure Starbucks to pay better rates to Ethiopian farmers. And Consumer Reports magazine said McDonald's brewed coffee was better than Starbucks, which it described as burnt and bitter.

Still, Starbucks is the second-most admired company in America, according to a survey of analysts and executives by Fortune magazine. They admire its fair-trade coffee, support of ecological growing practices, and how it treats its workforce.

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