Starbucks Announces New Upgrade

Seattle Howard D. Schultz, the CEO of Starbucks, announced on Wednesday changes for the company as it seeks to reconnect with customers who have left for competitors or pared back their coffee budgets in hard economic times, according to the New York Times.

The initiatives are intended to restore an authentic coffeehouse experience to the stores, said Schultz, and in turn re-energize an ailing stock that has lost half its value in the last 15 months.

At the annual shareholder meeting on Wednesday, Schultz introduced an improved automated espresso machine that grinds coffee for each drink and has a lower height that will allow customers to see baristas making their beverages. He said the company would roll out the Swiss-made Mastrena machines to three-fourths of Starbucks stores by 2010.

He also announced the acquisition of the Coffee Equipment Co., the four-year-old Seattle-based maker of the Clover coffee machine, which brews a more expensive, higher-quality coffee one cup at a time. The price was not disclosed. Starbucks will roll out Clover systems in select markets, according to Schultz.

Schultz described other plans, such as a new coffee blend, a partnership with Conservation International to certify environmentally responsible whole-bean espresso products, and a rewards program for users of the Starbucks customer card.

Beginning in mid-April, users of the customer card will be able to customize their drinks—with soy milk or vanilla, for example—at no cost. Starbucks also introduced a new online community, www.mystarbucksidea.com, where Schultz and other managers will contribute to a corporate blog. Customers will be encouraged to visit the site to make suggestions and interact with employees. The site opened on Thursday.

Looking further ahead, Schultz said that the company plans to introduce health- and wellness-related food and drinks and energy beverages later in the year.