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In 1987, the original owners sold the Starbucks chain to former manager Howard Schultz, who rebranded his Il Giornale coffee outlets as Starbucks and quickly began to expand. By 1986, the company operated six stores in Seattle and had only just begun to sell espresso coffee. During the 1980s, total sales of coffee in the US were falling, but sales of specialty coffee increased, forming 10% of the market in 1989, compared with 3% in 1983. In 1984, the original owners of Starbucks, led by Jerry Baldwin, purchased Peet's. During their first year of operation, they purchased green coffee beans from Peet's, then began buying directly from growers. During this time, the company only sold roasted whole coffee beans and did not yet brew coffee to sell. This cafe was later moved to 1912 Pike Place. The first Starbucks store was located in Seattle at 2000 Western Avenue from 1971–1976. Bowker said, " Moby-Dick didn't have anything to do with Starbucks directly it was only coincidental that the sound seemed to make sense." From there, the group remembered "Starbuck," the name of the chief mate in the book Moby-Dick. The founders brainstormed a list of words beginning with "st," and eventually landed on "Starbo," a mining town in the Cascade Range. Bowker recalls that Terry Heckler, with whom Bowker owned an advertising agency, thought words beginning with "st" were powerful. The first Starbucks was opened in Seattle, Washington, on March 31, 1971, by three partners who met while they were students at the University of San Francisco: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker were inspired to sell high-quality coffee beans and equipment by coffee roasting entrepreneur Alfred Peet after he taught them his style of roasting beans. Johnson assumed the role of CEO on April 3, 2017, and Howard Schultz retired to become Chairman Emeritus effective June 26, 2018.
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On December 1, 2016, Howard Schultz announced he would resign as CEO effective April 2017 and would be replaced by Kevin Johnson. In November 2019, the world's largest Starbucks opened in Chicago on the Magnificent Mile as the sixth roastery location. Starbucks operates six roasteries with tasting rooms and 43 coffee bars as part of the program.
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In 2010, the company began its Starbucks Reserve program for single-origin coffees and high-end coffee shops. The company opened an average of two new locations daily between 19. The first Starbucks location outside North America opened in Tokyo in 1996 overseas properties now constitute almost one-third of its stores. Despite an initial economic downturn with its expansion into the Midwest and British Columbia in the late 1980s, the company experienced revitalized prosperity with its entry into California in the early 1990s. Starbucks first became profitable in Seattle in the early 1980s. Starbucks-brand coffee, ice cream, and bottled cold coffee drinks are also sold at grocery stores. Many stores sell pre-packaged food items, hot and cold sandwiches, and drinkware including mugs and tumblers select "Starbucks Evenings" locations offer beer, wine, and appetizers. Starbucks locations serve hot and cold drinks, whole-bean coffee, microground instant coffee known as VIA, espresso, caffe latte, full- and loose-leaf teas including Teavana tea products, Evolution Fresh juices, Frappuccino beverages, La Boulange pastries, and snacks including items such as chips and crackers some offerings (including their annual fall launch of the Pumpkin Spice Latte) are seasonal or specific to the locality of the store. Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for efficiency and safety reasons. Starbucks has been described as the main representative of "second wave coffee," a retrospectively termed movement that popularized artisanal coffee, particularly darkly roasted coffee.