Can Starbucks Be Considered a Manufacturer?
While Starbucks is primarily recognized as a coffeehouse chain and retailer, it does engage in certain manufacturing activities that contribute to its overall business model. This article will explore the extent to which Starbucks can be classified as a manufacturer and discuss its manufacturing components.
Retail and Service Focus: Core Business
Starbucksrsquo; core business revolves around operating coffee shops that serve beverages and food items directly to customers. The emphasis is on enhancing the customer experience through the ambiance of its stores and the interactions with baristas. Despite this focus on service and retail, Starbucks also has a manufacturing component that is integral to its products.
Product Development: Creative Manufacturing
Starbucks produces and develops its own coffee blends and food items. This creative process involves complex manufacturing steps, from sourcing high-quality raw materials to roasting and packaging products. The company’s relentless pursuit of flavor and quality ensures that each item is crafted with care and precision, contributing significantly to its brand reputation.
Supply Chain: Managing Raw Materials and Packaging
The supply chain at Starbucks is extensive and involves managing the sourcing of raw materials such as coffee beans, along with roasting and packaging them for retail sale. This supply chain management is crucial for ensuring that each product meets the high standards set by the company. From verified sourcing to the final packaging, every step is meticulously controlled to maintain quality and consistency.
Consumer Packaged Goods (CPG)
Starbucks also produces packaged coffee and tea products for sale in grocery stores, which involves significant manufacturing processes. These products include roasted whole bean and ground coffees, premium Tazo teas, Starbucks- and Tazo-branded single-serve products, and a variety of ready-to-drink beverages such as Frappuccino, Starbucks Doubleshot, and Starbucks Refreshers. These products are sold to retailers in bulk, aligning with the typical wholesale business model of manufacturers.
Channel Development Segment
About nine percent of Starbucksrsquo; business is categorized under the Channel Development segment. This segment includes a range of products such as roasted whole bean and ground coffees, premium Tazo teas, and single-serve products. These products are sold through various channels including grocery stores, warehouse clubs, specialty retailers, convenience stores, and U.S. foodservice accounts. This demonstrates that Starbucks actively engages in manufacturing and distribution activities, albeit to a lesser extent compared to its retail operations.
Conclusion
While Starbucks is not traditionally considered a manufacturer due to its focus on retailing, it does have significant manufacturing components related to its coffee and food products. Thus, Starbucks can be regarded as a manufacturer to some extent, particularly in regards to its roasted coffee and packaged goods. This dual nature of the business allows Starbucks to maintain control over its product quality and ensure consistent customer satisfaction across all its retail outlets and online platforms.