Our Transformation is a Journey

[Pages:1]Our Transformation is a Journey

Starbucks transformation is a journey--embracing our rich heritage while responding to the most challenging business environment in our history. We must be determined to build Starbucks for the future, inspire our customers and grow our business. Every partner has a role in this journey. The time is now. Make it personal.

March

October

NOVEMBER

JANUARY Howard Returns as CEO

Howard Schultz introduced the Transformation Agenda to build the future of Starbucks by improving the current state of the U.S. business, re-igniting our emotional attachment with our customers and investing for the long term.

FEB

Annual Meeting of Shareholders

A series of bold customer-facing initiatives were announced representing the next steps in our transformation.

Clover? Brewing System: Clover? brewing system and Starbucks? small batch coffees highlight how flavorful and distinctive coffee can be, brewing the perfect coffee, one cup at a time.

and V2V: My Starbucks Idea is a community designed to let customers and partners shape the future of Starbucks. V2V is an online social network that connects people to action in their local and global communities.

Wi-Fi: With an active registered Starbucks Card, loyal customers receive up to two free hours of Wi-Fi service every day at our U.S. and Canada company-operated stores equipped with a hotspot. Partners enjoy free Wi-Fi every day, all day long.

Conservation International: Starbucks renewed our 10-year partnership with Conservation International to expand our ethical trading practices. Together, we embarked on a five-year plan to work with farmers to tackle climate change and preserve rainforests in and around coffee growing regions.

MastrenaTM Espresso Machine: The gold standard among espresso machines, the MastrenaTM was developed exclusively for Starbucks, and provides superior quality and consistency and enables baristas to connect visually with customers.

MAR APR

Ongoing

International Expansion

Starbucks Coffee International is a significant component of our company's long-term growth strategy. We will take a measured approach to our international store expansion.

Here are the new markets we entered in 2008: January: Czech Republic May: Argentina September: Portugal

2008 Leadership

Conference

The 2008 Leadership Conference, held in New Orleans, brought together 10,000 store managers and field leaders from the U.S. and Canada, including Licensed Stores, and representatives from our International markets. The goal was to reconnect and focus on our vision and strategy to build Starbucks for the future.

Our Commitment

to Our Stores & Partners

Starbucks has worldclass coffee and extraordinary people. As we transform, we are investing in the critical tools our store managers need to grow their businesses and move our company forward. New compensation and incentive plans will reward partners for high performance and results.

Starbucks Gold Card The new Starbucks Gold Card entitles loyal customers in the U.S. to 10% off most regularly-priced Starbucks products, including whole

bean coffee. This value is an addition to our Starbucks Card Rewards program available in U.S. company-operated stores.

DEC

AUGUST

Providing Value

to Customers

OCT

Recognizing the economic

pressures on consumer

spending, we introduced

programs such as the Treat Receipt,

designed to provide value to our customers.

NOV

DECEMBER

(RED)

Starbucks joined forces with (RED) to help save lives in Africa. Beginning this holiday, every time customers in the U.S. and Canada buy a (STARBUCKS) RED EXCLUSIVE beverage, we'll give 5? to the Global Fund. This is a part of StarbucksTM Shared PlanetTM and our ongoing commitment to the people and communities that grow our coffee.

February

APRIL

MAY

Espresso Excellence

Pike PlaceTM Roast

JAN

Training

Starbucks reinvented

Starbucks U.S. company-

brewed coffee with the

operated stores closed

launch of Pike PlaceTM

JUN

for a three-hour train-

Roast ? a special signa-

ing. Worldwide partners

ture coffee that is freshly

JUNE

pledged their commitment to upholding the uncompromising standards and quality that have made Starbucks the world's coffee leader-- this is known as the "Starbucks Promise."

roasted, ground and brewed every day.

Starbucks Card Rewards Program: By registering a re-loadable Starbucks Card in the U.S., customers tap into extra value from select free beverage customi-

zations to refills on brewed coffee.

Strategic Framework:

01: Be the undisputed coffee authority

STRENGTHEN THE CORE:

Great coffee and proud partners

ELEVATE THE EXPERIENCE:

One customer and one store at a time

02: Engage and inspire our partners

SEVEN BIG MOVES

03: Ignite the emotional attachment with our customers

04: Expand our global presence--while making each store the heart of the local neighborhood

05: Be a leader in ethical sourcing and environmental impact

INVEST AND GROW:

Responsibly and profitably for the long term

06: Create innovative growth platforms worthy of our coffee

07: Deliver a sustainable economic model

SEPTEMBER

StarbucksTM Shared PlanetTM

SEP

StarbucksTM Shared PlanetTM is the way we engage

with customers and communities to help create

a better future for our world. It is based on three

AUG JUL

commitments: sourcing our coffee ethically, acting as good environmental stewards, and being actively involved in our communities. Starbucks

announced a groundbreaking initiative to support

small-scale coffee farmers.

July--SEPTEMBER

A Changing Business

Climate

Starbucks demonstrated our willingness to make tough, timely decisions to improve profitable growth, operational efficiencies and an enhanced experience for customers and partners. In response to a challenging economic environment and to strengthen our business, we realigned and reduced our U.S. support organization and identified 600 under-performing company-operated stores in the U.S. and 61 in Australia for closure.

Health & Wellbeing

Our customers' health and wellbeing is, and will continue to be, a top priority. We have developed new items that are not only moderate in calories, but provide a nutritional benefit without sacrificing quality and great taste.

VivannoTM Nourishing Blends: VivannoTM Nourishing Blends were developed to fulfill a real need for our customers--providing nutritious, great-tasting beverage options.

They contain nutrients, protein and fiber, and have no artificial sweeteners giving customers the energy they need.

Starbucks? Perfect Oatmeal: Starbucks? Perfect Oatmeal is one of five new healthy breakfast options added to the menu in participating stores in the U.S. and Canada. Customers can now start their day with a great-tasting, nutritious breakfast.

October

Our Starbucks Mission

Since 1990, the Mission Statement and Guiding Principles have served as the foundation for all that Starbucks stands for. Nearly 20 years later ? and in the midst of our transformation ? this is more important than ever. Our new Mission articulates our passion and commitment to elevate the Starbucks Experience: "To inspire and nurture the human spirit ? one person, one cup, and one neighborhood at a time."

? 2008 Starbucks Coffee Company. All rights reserved.

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