Can Starbuck’s Coffee Fix the Economy?

Coffee Fix: Starbucks Pushes Small Business Loans
Posted by: John Tozzi on October 18, 2011

      Howard Schultz is giving new meaning to “start me up.” The increasingly activist Starbucks Corp. chief executive officer is taking donations online and through Starbucks cafes to create a small business lending fund. The company will donate $5 million in seed money to give the project, umm, a jolt.

New York Times columnist Joe Nocera today lauds Starbucks for supporting community development financial institutions, the nonprofit lenders serving small businesses and affordable housing in low-income communities. The coffee chain is donating $5 million and encouraging customers to pitch in at the checkout line as well. CEO Howard Schultz touts it as a way to help create jobs, without relying on Washington for help. Nocera writes.

With the government a nonfactor, Schultz began mulling other ideas. He knew that small businesses created most new jobs, but that many small businesspeople couldn’t hire because they had lost access to credit after the financial crisis. He thought about Starbucks’s involvement in microlending programs in some of the countries where it bought coffee. He wondered if there was some way that that could be applied to small business lending in this country. Finally, he thought about the nearly 7,000 Starbucks stores in the United States, and its tens of millions of customers. Surely, he mused, there must be some way to take advantage of Starbucks’s sheer size.

Last year Mark Pinsky, CEO of the group that will distribute the Starbucks funds to lenders, described in Bloomberg Businessweek how CDFIs work. They combine careful underwriting and lots of hands-on help for business owners to make good loans that get paid back, even though many of their borrowers aren’t considered credit worthy by mainstream lenders. Demand has only increased through the recession and limp recovery.

Starbucks is the latest big brand to get behind CDFIs. Financial institutions including Goldman Sachs have funded the lenders, looking to benefit from the halo effect of aiding small businesses. In addition to the money, CDFIs will benefit from the marketing oomph of one of America’s biggest consumer brands. That may be even more important for the industry, which as Nocera says, operate “mostly under the radar.”

For more, see Bloomberg View’s take on Schultz’s plan.

Lattes, Beers and Wine, Oh My!

Starbucks to start selling beer & wine in Portland’s Pearl

by Joe Smith, KGW business reporter
See Video Posted on June 9, 2011 at 5:04 PM

PORTLAND — Starbucks is going in a new direction at one location in Portland. The Seattle-based coffee giant will start selling beer and wine at it’s newest location in the Pearl District.

“We do know that 75-percent of our customers do come in before 2 p.m., so for us, this is a great way to expand into the afternoon and evening day part,” said Andrea Streedain, Regional Director for Starbucks.

Starbucks already has three stores that sell alcohol in Seattle. But KGW has learned in an exclusive report that the new location at The at 1039 NW Couch Street will be a first for Portland.

The design of the store (shown above) is to blend with the neighborhood and to fit into Portland’s coffee culture.

“It will very much capture the industrial feel of the Pearl District and that warehouse feel,” said Streedain.

Some of the fixtures were picked from local salvage yards and the main counter was even made out of a fallen tree from a farm in Oregon City.  Also, in an homage to Portland’s biking community, an entire wall was made from tire inner tubes.

Local-ism is the theme and that extends to many of the wine and beer selections that will be offered. Rouge, Widmer and Deschutes will be served.

“It can help introduce people who are in a mainstream larger company, who maybe don’t experience the smaller brands. It can bring those smaller brands like ours to them, ” said Assistant Brew master Ryan Schmiege for Deschutes Brewery.

Starbucks will look for answers in Portland before rolling out this concept to other locations here and across the country. But, the company promised that one thing will always remain constant – “Coffee will always be at the forefront,” Streedain said.

The new Starbucks store will open on June 13th at 5 a.m. Beer and wine service will start at 2 p.m. each day until closing at 11 p.m.

Starbucks also plans to open two other traditional locations in Portland later this year – at 14th and Morrison Avenue and 1st and Main Street.

Starbucks e-bucks – NYC Goes Mobile for Java

– Source: ZippyCart
Fresh off of the successful roll out of pay-by-mobile versions of their already ubiquitous Starbucks Card in Seattle, San Fransisco, and some Target in-store locations, Starbucks has expanded the service to test stores in one of the top tier coffee drinking markets – New York City.

About 300 corporate locations in New York City proper as well as Long Island are now equipped to process purchases using the electronic app version of the Starbucks Card, instead of its plastic predecessor. Apps are currently available for the iPhone and Blackberry only, as research showed that 71% of Starbucks consumers with smartphones used one or the other.

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