Starbucks 2011 Annual Report Download - page 8

PART I
Item 1. Business
General
Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in more than 50
countries. Formed in 1985, Starbucks Corporation’s common stock trades on the NASDAQ Global Select Market
(“NASDAQ”) under the symbol “SBUX.” We purchase and roast high-quality whole bean coffees that we sell,
along with handcrafted coffee and tea beverages and a variety of fresh food items, through company-operated stores.
We also sell a variety of coffee and tea products and license our trademarks through other channels such as licensed
stores, grocery and national foodservice accounts. In addition to our flagship Starbucks brand, our portfolio also
includes Tazo®Tea, Seattle’s Best Coffee®, and Starbucks VIA®Ready Brew.
Our objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. To
achieve this goal, we are continuing the disciplined expansion of our store base, primarily focused on growth in
countries outside of the US. In addition, by leveraging the experience gained through our traditional store model, we
continue to offer consumers new coffee products in multiple forms, across new categories, and through diverse
channels. Starbucks Global Responsibility strategy and commitments related to coffee and the communities we do
business in, as well as our focus on being an employer of choice, are also key complements to our business
strategies.
In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended October 2, 2011 (“fiscal 2011”),
Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or
“our”.
Segment Financial Information
Starbucks has three reportable operating segments: United States (“US”), International, and Global Consumer
Products Group (“CPG”). Our Seattle’s Best Coffee operating segment is reported in “Other” with our Digital
Ventures business and unallocated corporate expenses that pertain to corporate administrative functions that support
our operating segments but are not specifically attributable to or managed by any segment and are not included in
the reported financial results of the operating segments. Segment revenues as a percentage of total net revenues for
fiscal year 2011 were as follows: US (69%), International (22%), and CPG (7%). The Other category comprised 2%
of total net revenues.
The US and International segments both include company-operated stores and licensed stores. The International
segment also includes foodservice accounts primarily in Canada and the United Kingdom (“UK”). Our International
segment’s largest markets, based on number of company-operated and licensed stores, are Canada, Japan and the
UK. The CPG segment includes packaged coffee and tea, Starbucks VIA®Ready Brew and other branded products
sold worldwide through channels such as grocery stores, warehouse clubs and convenience stores, and US
foodservice accounts.
Financial information for Starbucks reportable operating segments and Other is included in Note 18 to the
consolidated financial statements included in Item 8 of this 10-K.
Revenue Components
We generate our revenues through company-operated stores, licensed stores, consumer packaged goods and
foodservice operations. Our consumer packaged goods and foodservice operations include packaged coffee and tea
sold in grocery and warehouse club stores, licensing arrangements with business partners to use our brands on
various products, and arrangements with foodservice companies that support a variety of locations outside our retail
store footprint.
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