Howard Schultz — From Brooklyn Housing to Starbucks
Explore the documented turning points, decisions and setbacks behind Howard Schultz — From Brooklyn Housing to Starbucks, with sources and an editorially…
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Howard Schultz — From Brooklyn Housing to Starbucks
Explore the documented turning points, decisions and setbacks behind Howard Schultz — From Brooklyn Housing to Starbucks, with sources and an editorially… Howard Schultz — From Brooklyn Housing to Starbucks How a visit to Italy helped Howard Schultz imagine a different kind of American coffeehouse—and how employee benefits became part of the company story. Growing up in public housing Howard Schultz was born in Brooklyn in 1953 and grew up in the Bayview Houses, a public-housing development. He has often described watching his family struggle when his father was injured and lacked the workplace protections that could have softened the financial shock. That memory later influenced how Schultz talked about employee benefits and company responsibility.…
Howard Schultz — From Brooklyn Housing to Starbucks
How a visit to Italy helped Howard Schultz imagine a different kind of American coffeehouse—and how employee benefits became part of the company story.
Growing up in public housing
Howard Schultz was born in Brooklyn in 1953 and grew up in the Bayview Houses, a public-housing development. He has often described watching his family struggle when his father was injured and lacked the workplace protections that could have softened the financial shock. That memory later influenced how Schultz talked about employee benefits and company responsibility.
Schultz became the first person in his family to graduate from college, attending Northern Michigan University and working to help pay his way. He later built a career in sales, eventually working for Hammarplast, a housewares company that sold coffee equipment.
Discovering Starbucks
In 1981 Schultz noticed that a small Seattle coffee retailer was buying an unusual number of Hammarplast products. The company was Starbucks, then focused mainly on high-quality coffee beans and equipment. Schultz joined Starbucks in 1982 as director of retail operations and marketing.
A 1983 trip to Italy changed his view of what the business could become. In Milan he saw espresso bars functioning as social spaces—places between home and work where customers stayed, talked and returned as regulars. Schultz believed that a version of that experience could work in the United States.
Il Giornale and the purchase of Starbucks
The original Starbucks owners were cautious about transforming a bean retailer into a coffeehouse chain. Schultz left and founded Il Giornale in 1985 around the espresso-bar concept. Two years later, with investor backing, Il Giornale acquired Starbucks assets and adopted the Starbucks name.
According to Starbucks’ company timeline, the combined business had 17 stores in 1987. It expanded quickly, entered new cities and went public in 1992. Schultz’s ambition was not simply to sell more coffee but to build a repeatable customer experience around stores, baristas and community.
Benefits, growth and a return to leadership
Starbucks began offering health benefits to eligible full- and part-time employees in 1988 and later expanded employee stock participation. Those policies became a prominent part of Schultz’s explanation of what he wanted to build differently from the workplaces his father had known.
Schultz stepped away from daily management, returned as chief executive in 2008 during a difficult period, and later left the role again. Starbucks continued to change under subsequent leadership, but the core idea associated with Schultz—a coffeehouse as a “third place” between home and work—became one of the most influential concepts in modern retail hospitality.
Why the story still matters
Schultz’s story is more useful when stripped of billionaire mythology. It shows how a personal memory, a retail observation in another country and a carefully designed customer experience can combine into a durable business strategy.
Benefits, scale and the idea of a “third place”
Starbucks’ official timeline makes clear that Schultz did not found the original Starbucks. The first store opened in 1971, years before he joined. His contribution was to push the business toward the coffeehouse experience he had observed in Italy. He joined Starbucks in 1982, traveled to Italy in 1983, tested the coffeehouse idea with the founders, then left to build Il Giornale in 1985. In 1987, Il Giornale acquired Starbucks’ assets and adopted the Starbucks name.
That sequence matters because it replaces a simplified founder myth with a more interesting business story: Schultz encountered an existing specialty-coffee company, imagined a different customer experience and eventually gained control of the brand after proving the concept elsewhere. By the end of 1987 Starbucks had 17 stores. The challenge after that was reproducing an experience—coffee, service, store design and atmosphere—across a rapidly growing network.
Employee benefits became another part of the company’s identity. Starbucks’ timeline says it offered full health benefits to eligible full- and part-time employees in 1988 and introduced a stock-option program including part-time employees in 1991. Those policies were unusual enough in retail to become central to Schultz’s public story about what he wanted a company to provide its workers.
Starbucks went public in 1992. Later growth brought its own problems, including periods when expansion outpaced the experience the brand was supposed to deliver. Schultz’s return to the CEO role in 2008 reflected that tension. The company had to keep asking whether scale was strengthening the original idea or diluting it. That question—how to turn a local experience into a global system without making it feel generic—is one of the reasons the Starbucks story remains useful to study.
The difficulty of scaling an experience
A coffeehouse is partly a product business and partly an experience business. Beans, milk and equipment can be standardized, but warmth, pace, service and the feeling of a neighborhood gathering place are harder to reproduce. Starbucks’ growth forced it to turn those less tangible qualities into training, store design, operating routines and brand standards that could work across thousands of locations.
That tension explains why the company’s history includes both rapid expansion and periods of retrenchment. Opening more stores can make a brand more convenient while also risking sameness or declining quality. Schultz’s repeated emphasis on the “third place” was an attempt to keep a human idea at the center of an increasingly large system. Whether every store achieved that ideal is debatable, but the management challenge is clear and remains relevant to any service company trying to scale.
Sources & References
- Starbucks — Company Timeline: https://about.starbucks.com/uploads/2019/01/AboutUs-Timeline-1.26.17-1.pdf
- Howard Schultz, Pour Your Heart Into It (1997)
- Starbucks — Company Timeline ↗
- Howard Schultz, Pour Your Heart Into It (1997)
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