UNION.
TOP STORY THIS HALF AN HOUR,
STARBUCKS MEETING IS HAPPENING
NOT ONLY ROLLING OUT BRAND-NEW
ROYALTY PROGRAM CUSTOMERS WILL
GET TO SIP COFFEE OUT OF A
GREEN CUP REKRIEKTSDZ OR COME
POSTED FIRST ON FOX BUSINESS,
JOINING ME CEO OF STARBUCKS
KEVIN JOHNSON THANKS SO MUCH
FOR JOINING US.
>> GOOD MORNING, MARIA.
.
>> KEVIN YOU'VE GOT A BIG
MEETING WITH SHAREHOLDERS GIVE
YOUR MESSAGE WHAT WILL BE THE
MAIN FOCUS OF THE MEETING THIS
MORNING?
>> WELL MARIA, WE ARE EXCITED
TO HOST 4,000 ATTENDEES AT OUR
27th ANNUAL MEETING OF
SHAREHOLDERS AND THIS IS BEEN
A TRANSFORMATIVE YEAR THIS IS
A CELEBRATION OF 380,000
STARBUCKS PARTNERS PROUDLY
WEAR GREEN UP A ROP SERVED A
HUNDRED MILLION CUSTOMERS A
WEEK.
>> YOU ARE ALSO MARKING ERROR
YOU TWO YEA
YOU TWO YEE
YOU TWO VEE
YOU TWO VARY ANNIVERSARY YOU
TALKED ABOUT GUIDANCE AS A
CONFERENCE RECENTLY TALK TO US
ABOUT THE STORY OF STARBUCKS
WHERE THE PRIORITIES IS, WHERE
DOES GROWTH COME FROM IN THE
COMING FIVE YEARS?
>> WELL MARIA YOU KNOW LAST
TWO YEARS, WE HAVE STREAMLINED
THE COMPANY TO EP ABLE TO US
FOCUS ON MOST IMPORTANT
PRIORITIES THE BUSINESS, AND
NOW WE ARE SXUTH WITH
DISCIPLINE.
YOU KNOW EXECUTING WITH
DISCIPLINE WE DELIVERED 0%
TOP-LINE GROWTH 17% GROWTH
EARNINGS PER SHARE THE
STRATEGIC PRIORITIES OUTLINED
CLEARLY U.S. AND CHINA ARE TWO
TARGETED LONG-TERM GROWTH
MARKETS.
THE GLOBAL COFFEE ALLIANCE
WITH NESTLE
WITH NESTLÉ'S ALLOWING TO US
BRING STARBUCKS COFFEE TO
EXPRESSO PLATFORMS MARKETS
AROUND THE WORLD AND
SHAREHOLDER RETURNED FOCUS SO
ALL HAS COME TOGETHER TO PUT
US IN A NOTION FOR AGENDA THAT
WE CALL GROWTH AT SCALE.
THAT GROWTH AT SCALE, HAS BEEN
ENABLED BY STREAMLINE
ACTIVITIES SHARPENED FOCUS ON
PRIORITIES, DISCIPLINED
EXECUTION.
>> I WANT TO TALK NESTLE
>> I WANT TO TALK NESTLÉ'S
DEAL A BIG ONE IMPORTANT FOR
GROWTH STORY LET ME START ON
CHINA GIVEN THE FACT THAT WE
HAVE MORE OFFICIALS NEXT WEEK
HEADED TO CHINA, TO BEIJING,
STEVEN MNUCHIN ROBERT
LIGHTHIZER.
THE TWO GENTLEMEN THAT HAVE
BEEN TRYING TO STRIKE A DEAL
WITH THEIR COUNTERPARTS IN
CHINA SOME ANALYSTS WORRY YOU
ARE SEEING A DECELERATING OF
BUSINESS IN CHINA THIS IS A
HIGH GROWTH STORY FOR
STARBUCKS IT IS IMPORTANT
MARKET CAN YOU CHARACTERIZE
THE BUSINESS IN CHINA RIGHT
NOW?
>> YOU KNOW OUR BUSINESS
CONTINUES TO ABOUT CONTINUES
TO ABOUT VERY HEALTHY IN
CHINA.
WE ARE WE HAVE ACCELERATED OUR
NEW STORE GROWTH NOW AT 3400
STORES WE ARE BUILDING 600 NET
NEW STORES A YEAR OPENING A
NEW STARBUCKS STORE IN CHINA
EVERY 15 HOURS MANY WAYS WE
HAVE BEEN THIS CHINA 20 YEARS
BUT WE ARE PLAYING THE LONG
GAME.
AND SO CERTAINLY AS WE LOOK TO
THE FUTURE, CHINA IS GOING TO
REMAIN ONE OF OUR TWO TARGETED
LONG-TERM GROWTH MARKETS IN
ADDITION TO THE UNITED STATES.
>> WHAT IS THE DIFFERENCE IN
TERMS OF CONSUMER BEHAVIORS IN
CHINA VERSUS THE U.S. KEVIN?
ARE YOU SEEING A DYNAMIC THAT
IS CHANGING WHERE -- I MEAN I
KNOW YOU ARE SEEING ALSO,
COMPETITION AS WELL IN CHINA,
CAN YOU SPEAK TO THAT
COMPETITION AS WELL AS
THE CONSUMER BEHAVIORS THERE
HOW YOU HAVE ADJUSTED TO
ADDRESS CONSUMERS THERE?
>> FIRST OF ALL, CHINA IS
PREDOMINANTLY A TEA DRINKING
CULTURE SO AS STARBUCKS
ENTERED THE MARKET TWO DECADES
AGO WE BEGAN TO INTRODUCE YOU
CHINESE CONSUMER TO PREMIUM
COFFEE HAND CAVEATED BEVERAGES
WE MAKE SERVE IN STARBUCKS
STORES AROUND THE WORLD WE
SERVE IN CHINA OVER THAT
PERIOD AS WE INTRODUCED
CHINESE CONSUMER TO PREMIUM
COFFEE CERTAINLY THAT IS
SHOWING THERE IS A LARGE
GROWING ABOUT ABOUT
ADDRESSABLE MARKET BRINGING IN
NEW COMPETITION, YOU KNOW WE
THE MARKET IS SO LARGE, AND
THERE ARE SO MANY
OPPORTUNITIES, THAT IN MANY
WAYS, COMPETITION IS HELPING
ACCELERATE THE ADOPTION OF
COFFEE CONSUMPTION IN CHINA I
THINK STATISTICALLY YOUR
MONITOR REPORTED ON AVERAGE
CHINESE CONSUMER CONSUMES ONE
CUP PER CAPITA PER YEAR,
COMPARED TO 300 CUPS OF COFFEE
PER CAPITA PER YEAR IN THE YU
TATES SO SIGNIFICANT GROWTH
OPPORTUNITY, WE BELIEVE IN THE
LONG TERM, AND, YES, WE WILL
HAVE MANY COMPETITORS WE
ALWAYS HAVE WE ALWAYS WILL, WE
ARE SEEING THAT HAPPEN IN
CHINA, BECAUSE THEY TOO SEE
THE SIZE OF THE EBB
ADDRESSABLE MARKET WHAT IS
HAPPENING IN THAT MARKET.
>> HAS COMPETITION INCREASED
LAST COUPLE YEARS THAT YOU'VE
BEEN RAMPING UP IN CHINA?
I THINK THE COMPETITION HE
GLOBALLY AROUND THE
ADDRESSABLE MARKET OF COFFEE
HAS BEEN INCREASING OVER THE
LAST THREE TO FIVE YEARS.
YOU KNOW, SOME OF IT IS
START-UP COMPANIES, OR THIRD
WAVE INDEPENDENTS, BUT YOU ARE
SEEING MANY LARGE COMPANIES
MAKING ACQUISITIONS, AND DOING
CONSOLIDATION AROUND THE
INDUSTRY OF COFFEE.
FOR STARBUCKS WE STAYED
FOCUSED ON THE FORMULA HAS
WORKED FOR US FOR THE LAST 48
YEARS, YOU KNOW WE WERE
FOUNDED IN 1971, ONE STORE IN
PICKS PLACE MARKET DOWN STREET
EITHER FROM WHERE I AM SITTING
NOW LAST WEEK OPENED 30,000'S
STORE IN.
>> CHINA, HAND KASTEDZ
BEVERAGES FOR EACH AND EVERY
CUSTOMER AND THE FOCUS THAT WE
HAVE ON OUR CONSTANT PURSUIT
OF DOING GOOD.
THAT FORMULA CREATED A BRAND
THAT IS ONE OF THE WORLD'S
MOST ADMIRED TRUSTED BRANDS WE