Starbucks vs Dunkin - Mission Espresso | 2
Introducing the capital one walmart rewards card earn five percent back at Walmart online games for the kids headphones for data laptop. For Mom doesn't matter you get five percents back at Walmart Online. You'll also earn two percent at Walmart in store restaurants and travel and one percent everywhere else. When you want all that H- you need the capital. One Walmart rewards card. What's in your wallet? Terms and exclusions apply capital one in a New York City. It's a blazing hot Monday. In July nineteen eighty-one twenty-eight-year-old Howard Schultz heaves his way through a revolving door and trudges toward the elevator as he hits the up button. A CO worker spots him in Russia's over they worked together at a company that manufactures plastic household objects holdovers man squeezes doors closed Schultz. Look straight ahead hoping to avoid the repetitive Chitchat. Who Howard. How was your weekend? Fine fine not too. Shabby hung out by the pool in the hamptons noise. Yeah it was great Schultz tries to sound upbeat and sociable. But he can't deny it. Life is built fields dull unrewarding as a VP. He's got the loft style apartment on Manhattan's upper east side with its tasteful salmon colored walls. He's got the Pricey Car. The hefty salary the generous expense account the prestige. He's emerged from a difficult impoverished childhood. Where a ringing phone almost always announced a bill collector and he's the first in his family to go to college now just six years after graduation. He's a genuine American success. But something's missing. Schultz is the kind of guy who needs emission a purpose and frittering away. His weekends in the Hamptons isn't it. He makes his way into his office stares out the window wishing he could be anywhere else. He'd even trade places with a guy on the street below selling peanuts from a pushcart. He stirs his coffee after all is daydreaming. It's cold and that's when he remembers last week he noticed an odd billing pattern he digs through his file cabinet for the invoice. He studies it. There must be an error. A small retailer in Seattle is placing unusually large orders for plastic drip coffee maker the name of the company starbucks coffee tea and spice a few minutes later. His wife calls. Hi Howard how are you just thought I'd say hello? Hi Sweetie I'm okay. I can't believe it's only Monday. I know well I want to distract you too much. Just wanted to hear your voice. So you'd home way. Listen I have to tell you about something? Strange there's this retailer in Seattle. That has just four stores but they're placing larger orders for our coffeemaker than macy's really. Why do they need so many? I don't know but I've got to figure out what's going on at this company. I'm going out there myself. His curiosity is about to end his life soon. Howard Schultz will find his mission but securing. It won't be easy own business. Wars is sponsored by light. Box ever heard of lab grown diamonds lab grown diamonds or essentially chemically identical to natural ones just made in a lab at light box. They've hacked the process to grow gorgeous stones every time it starts with a tiny piece of lab grown diamond heated up a plasma reactor to temperatures nearly as hot as the sun after about two weeks. Those little seeds grow into full stones. Now here's where it gets really interesting. Light box lab. Grown diamonds aren't just made the same every time they're also priced the same. Each carrot is eight hundred dollars. Mind blown. They've even cracked the science of color. So you can sparkling pink white and blue. Check THEM OUT AT light box. Jewelry DOT com slash. Vw and make sure to use code. B W for twenty five dollars off. That's life box L. I. G. H. T. B. O. X. DOT COM SLASH B. W Don't forget code. B W for twenty five dollars off from wintry. I'm David Brown. And this is business wars Every wildly successful company needs a visionary leader. Dunkin donuts had theirs in the smiling determined. Bill Rosenberg and now his son Bob. As of Nineteen eighty-one Dunkin donuts has been successful for more than three decades in part because they never faced major competition but Howard Schultz is about to descend on Seattle and once he does. Dunkin donuts will finally have a worthy rival. This is episode to Mission Espresso. Schultz arrives in Seattle an Autumn Day in one thousand nine hundred eighty one. The clean air is so sharp. It makes his lungs ache. He can't wait to get to the starbucks store it's located in Seattle's original farmers market the famous Pike Place Market. Schulz makes his way through the enormous market. He's never seen anything like it. He walked by a stall where freshly caught. Salmon is displayed on beds of ice. He takes in the delicious aroma baking bread. When he finally reaches the starbucks store he surprised by how small and UNASSUMING. It is a young violinist at the doors. Playing Mozart Schultz. Drop some change in his open case and enters the store deep. Fragrant scent of coffee beans practically overwhelms him. He gazes at the dozens of large bins full of beans behind the warn wooden counter. They're displayed on long shelves that reach up to the ceiling. There are beans from Kenya. Costa Rica in Madagascar beans from plantations on the Indonesian island of Sumatra in the center of the store Schultz sees a mysterious gleaming metal machine with a large tree in the front a cheerful man wearing a red bandanna is pulling a metal scoop from it. What does this machine do? This is the roaster. We roast the beans for a long time until the green coffee beans turn a deep brown. The man stands by the machine leaning toward it cupping his ear. Oh what are you listening for for the beans to pop twice? That's whether done Schultz shakes his head in disbelief for him. As for everyone else he knows coffee comes from a can not being. Those starbucks sells only beans. Customers are offered small samples brewed coffee. Schultz takes a steaming cup of Sumatra coffee. The intense aroma fills his nose. He takes a small SIP. Whoa is it too much more. You know it just prising. He takes another SIP now. The flavors are fully striking. You say this is Sumatra coffee folks like I could see why it's got body in packs a punch. I've never tasted anything with such a strong earthy flavor. Another thing that makes it so good is brewing it in those coffee makers we sell everyone who buys our beans also buys one of those. This is why the coffeemaker orders are so big Schultz realizes that all. The coffee's been drinking his whole life has been nothing but swell before. Schultz came to Seattle. He set up a meeting with the company's owners. Now he heads upstairs to introduce himself to the two men. Schultz can immediately see that. They're both at least ten years older than him. Jerry Baldwin is reserved informal. He Run starbucks full-time Gordon. Bowker is offbeat an artsy. He divides his time between the store and his advertising agency. Schultz is impressed that they're both so intelligent engaging well-traveled and they both have an undying passion for coffee. Baldwin opens a bag of beans straight from Java. He grabs them and Bruce. Two Cups in a French coffee. Press this job as a rich buttery brew. Smell that it's known for. Its delicate floral notes. In a sweet aroma. I had no idea there was so much variety in taste. And why is it so important to roast the beans dark that roast differentiate starbucks from everyone else the finest beans can withstand the heat the darker you roast them. The more flavor you get coffee is simple. Just watering ground beens but when you have the perfect means it's one of the world's special pleasures Schultz nods. He's envious of Baldwin's passion for the beans. It borders on and Schultz has to admit that although he likes his job. There's nothing magical about plastic products on the plane. Ride back to New York. He can't stop thinking about starbucks. He thinks maybe just maybe by the time the Plane Lands Howard. Schultz knows what he wants to do with his life. The next day he takes his mother to lunch in midtown. Manhattan Mom. You know. I haven't been completely satisfied lately. Well I have a new goal. I want to leave. New York moved to Seattle and become part of this great new coffee store. It's called starbucks. You're doing well you have a future. Don't give up everything you've achieved for a company. Nobody ever heard of but despite his mom's warning he can't get the idea out of his head a few weeks later on a cool and rainy Seattle morning. Jerry Baldwin is in the starbucks store unpacking a new shipment of Kenyan beans. The phone rings he size. He has a feeling WHO's calling. Is that kid from New York again. Hello Again Howard is the third time. Schultz is called this week. I don't mean to be a past. I'm just so sure I'd be a perfect addition to starbucks but we don't have a position for you. I'll do anything just to get my foot in the door. I understand Howard but my answer is still no while. Scholtz tries time and again to get a job at starbucks Dunkin donuts. Ceo Bob Rosenberg is basking in his company. Success they now have more than one thousand franchises throughout the northeast though his father Bill Rosenberg is no longer. Ceo He's the company's most knowledgeable and respected adviser wherever he goes for business or pleasure. He looks for potential new store. Locations or checks out existing stores builds developed a point system to scout out the best locations for new stores. It gives credit for visibility. Traffic Count for traffic. The ease of getting in and out of the store. Plus points for demographic diversity how many people live nearby how well nearby supermarkets are doing. Even the number of kids bikes is an indicator. Kids eat more doughnuts than adults. They build Dunkin donuts franchises in places that receive at least seven points and these prime locations can be anywhere lately. Dunkin donuts franchise stores have been cropping up outside the US. Many of them in Asia in the fall of Nineteen eighty-one Rosenberg and his wife visit Dunkin donut. Stores in Singapore and Hong Kong businesses booming. Their next stop his Bangkok Thailand. The Dunkin donuts store in the World Rosenberg and his wife gingerly crossed the street in Siam Square. A popular shopping district motorcycles and buses go whizzing by the streets are packed with small shops and restaurants and stalls selling food and Candy. It's eight am and the store is already bustling. Well look at that. One hundred thirty seats in every one of them failed at the counter. Young shop wearing trendy blackout fits stand next to businessmen in suits local musicians who've been up all night and are making their final stop before they go to bed. They're all drinking coffee out of Dunkin donuts signature Styrofoam Cups with a name written out in bright orange and pink and they're happily devouring the special doughnut geared to tie tastes a traditional glazed donut shop with dried shredded chicken. Thai Chili Paste. Rosenberg looks on the big smile on his face. He's proud of the savvy way. Dunkin donuts has adapted its menu to its locations around the world. It's a smart move that let them quickly gain a solid foothold overseas from there. Rosenberg goes to Japan where the first International Dunkin donuts open in nineteen seventy. Most of the Tokyo franchises are running smoothly but to his perfectionist. I one store stands out. He pulls the franchise owner aside. You'll coffee's cold. Dunkin donuts is famous for its coffee. It's the best there is if you can't meet my standards. I warned you. I'll shut down you store. We will do better. I promise. Then start now. My good name depends on you doing your job. The whole point of these stories is to share the joy of great doughnuts. Great coffee you CAN'T SETTLE FOR ANYTHING LESS. Rosenberg's white pulled him aside. You were awfully tough on that man. I need to be Dunkin donuts. Success is based on attention to detail. We can't afford to get sloppy or lazy so the more successful. We become the more vigilant. Again and Rosenberg's vigilance is legendary from the very first store. He's made sure. The coffee is brewed in Small Tin Cup. Silex pots to preserve its freshness after eighteen minutes in the pot. The coffee is thrown away. It's expensive but Rosenberg doesn't care after the old coffee is toss beans freshly ground for the next. Batch is his way of assuring that customers receive uniform dependable experience. He knows that it's this insistence on excellence. That's made his fortune winter. Nineteen eighty to New York City. Howard Schultz is totally frustrated. Months have passed since he visited starbucks yet. He can't keep himself from calling Jerry Baldwin again and again Jerry. You've gotTa know that starbucks has tremendous potential. I'm sure of this is I've ever been of anything and I know I could play a huge role in helping you reach that potential. But we don't care about potential Howard for us. The company's mandate is to sell coffee beans and coffee makers and a few small stores. Don't you ever dream of making it something more? Well to tell you the truth. I sometimes wonder if we could expand a bit beyond Seattle. You could Jerry. That's a good dream finally in the spring of nineteen eighty two Baldwin invited Scholtz to join him in Gordon. Backer for dinner and San Francisco. Schultz is Giddy with anticipation before the dinner. Schultz is in his hotel room dressing in his best suit and a new shirt and tie he bought for the occasion. He's meeting the starbucks crew at Donatello's an upscale Italian restaurant he arrives early. There's a light rain falling. But he walks around the entire block to pump up his confidence as he walks he tells himself. I've waited my entire career for this dinner. He's already at the table when Baldwin and back arrive there dressed casually in sports jackets no ties Schultz wonders. If he's made a mistake with his formal attire then he thinks they're both older than I am. I'm dressed to show respect. But his main goal is to charm them. Once they're seated he launches into his pitch. You got a real jewel in starbucks in New York. When I served your coffee of my friends they love it. Why wouldn't people all over? America react the same way you can open stores throughout the United States and Canada. You could share your knowledge passion with so many people as Baldwin. Listen they're calm expressions? Don't change but by the end of the meal. Schulz's convinced he's won them over with his youthful enthusiasm and energy. He calls his wife get ready to move to Seattle. I'm about to be hired throughout the night shots tosses and turns. He's too excited to sleep at eleven. Am The next morning. His Hotel Room phone finally rings. It's Jerry Baldwin. I'm sorry Howard. We're just not going to hire you. What why not? It's too risky too much change Shen. Oh no shots thanks. My enthusiasm. Didn't impress them at SPOOK THEM. He paces the room. He has to do something to change their minds but what a few minutes later. He calls Baldwin Back Jerry. You're making a terrible mistake. The destiny of starbucks is at stake. I know that you know how great it can be. Baldwin is about to blurt another stronger version of no but then he catches himself. Schultz is wearing him down. What gets him? Most is shows his faith in starbucks. He asks himself. Does it make sense to turn away a person with so much conviction? All Right Howard will hire you. You'll be our director of retail operations in marketing. But look don't get any big ideas. Were keeping starbucks as it is. We've got four stores. We import coffee beans. We roast them and sell them. That's all thanks. You won't be sorry but deep down. Schultz knows he won't settle and soon he'll get a massive jolt of inspiration on a trip overseas. Meanwhile Dunkin donuts hits the Jackpot with a dynamite ad that features of beleaguered Baker. Here's a question. What do companies like ring hint and Tacomas all have in common the answer? They all use net sweet to accelerate their growth successful companies. Know that an order grow faster. You've got to have the right tools if you WANNA take your company from two million to ten million or ten million to hundreds of millions in revenue net. Suite by Oracle gives you the tools to turbocharger growth with net. Sweet you get a full picture of your business finance inventory. Hr customers and more. It's everything you need to grow all in one place right there from your phone or computer. C Net sweet is the world's number one cloud business system trusted by more than nineteen thousand companies. It's the last system you'll ever need and it'll give you the visibility and control. You need to make the right decisions and grow with confidence. Net sweet business grows here schedule. Your free product tour right now and receive your free guide six ways to run a more profitable business. That's at net sweet dot com slash wars net sweet dot com slash wars. I'll give it to one wartime net sweet dot com slash wars business wars is sponsored by a real favorite of mine. The Economist The economist is a weekly magazine that offers insight and opinion on international and US News Politics Business Finance Science Technology Arts and the environment. It helps readers like you and me make a little more sense of what's going on in the world around us and it's been doing that for over a hundred and seventy years I've been about both brexit and the corona virus today both major stories in the news but you see the economist always find new angles to stories like these showing how these major events halfway around the world have the potential to affect all of us right here on the home front long before the competition gets around to it. The Economist is the smart guy to the forces. Changing your world. You can get twelve weeks access right now for just twelve dollars. That's an amazing deal for your twelve dollars. You'll get twelve print issues delivered to your door. A fantastic digital offering including full access to economist Dot Com with exclusive web only content. You'll get the new APP so you can read or listen to current and previous editions of the Economist and a whole lot more for your twelve weeks access to the economist for just twelve dollar shoes. All you need to do just text. Bw Twelve to nine nine zero zero zero. That's the letters b. w. and then the number twelve all one word to nine nine zero zero zero for your first twelve issues and enjoy the economist whenever and wherever you want you can thank me later Springtime Nineteen eighty-three Milan. Italy Howard Schultz. Feels like he's on top of the world here on behalf of starbucks to check out new coffee makers at an international houseware show as he walks jauntily down narrow street he passes the smallest Bresso Bar and decides to duck inside behind the counter. Talkative man is pressing down on a metal bar that releases a thick cloud of steam. The man hands a Deputy Toss Cup of Espresso one of the customers lined up at the counter next. He makes a Cappuccino topping off with thick white foam. The BARISTA keeps making various types of coffee. All the while chatting with his customers to Schultz. It's great theater and all the while. He's breathing in a blend of enticing aromas. Some are fruity others are spicy. Still others woody or sweet. There are not like sets and deep sense that him of fine wine. It's a delight for the senses. Schultz goes to the counter. I haven't Espresso please. Are you an American? Can you tell your accent? I'm used to it. We had a lot of Americans in here and do they love the coffee. They crazy for. They say they can't get anything like at home. The counter man hands Schultz's espresso as he drinks it. He feels like he's sipping a cup of them. Brosio seductively thick and rich. The caffeine jolts him leaving the store he notices one espresso bar. After another all packed with customers inside the shops customers. Sit At small round tables summer talking away gesturing dramatically with their hands others seated alone are engrossed in a book or the newspaper still others stand at the counter chatting do other customers as they wait for their orders that night. He calls his wife. The Italians are so passionate about coffee. They've elevated it to a whole new level there's a romance and a ritual to it on the way he formulates. What he's sure is a brilliant idea to open espresso bars in the United States while Howard Schultz flies home members of Dunkin donuts Advertising Agency. Gather around a conference table. Their leader rubs his hands together in anticipation he's about to present the company's CEO. Bob Rosenberg with their idea for the company's first major television ad. Here's a concept Abakar. Wakes up at three in the morning. He drags himself out of bed saying time to make the doughnuts. What are you trying to say within line? Dunkin donuts is an everyman company right absolutely delicious products. Everyone can afford exactly so the ad dramatizes a routine all working people go through getting up in the and going to work like our Baker. I I like that. You give the bigger name and every man named Fred Fred the baker. That's good the auditions for the role of Fred. The Baker start a week later but the casting call quickly runs into trouble. The admen quietly worry to each other. We've seen more than two hundred guys. None of them are right there too perky way someone with the way the on his shoulders he's exhausted because workers rely on him for their fresh doughnut and coffee every morning that afternoon. The audition and unknown actor named Michael Vale. He's Paci with hangdog expression in a bumbling walk and he shows up at the audition in the right costume pajamas. I'm Joan this is the guy. The one workers can relate to the first fred. The Baker ad airs in Nineteen Eighty. Two it's a sensation. Dunkin donuts are always fresh. I made the donuts. Make them at least twice every day to make up. You guys like supermarket. Time to make the donor make the dough made AMC. Donuts up to fifty two varieties day and night fred. The baker instantly becomes Dunkin donuts mascot and beloved figure wherever he goes people clamor for his autograph when he shows up at Dunkin donuts stores for promotions customers and his name with the company's newly raised profile demand increases for Dunkin donuts classic pairing doughnuts and coffee by the next year nineteen eighty-three. They've got more than twelve hundred stores. In malls and shopping centers in rest stops throughout the northeast when new stores open founder? Bill Rosenberg is there beaming as he cuts the ribbon and offers free coffee to customers? He feels like that King of coffee. He has no way of knowing that a rivalry is brewing on the other side of the country but first Howard Schultz has to convince the owners of starbucks that espresso bars or a great idea. It'll be the biggest battle he's ever had in our next episode. A tiny coffee shop morphs into a multi-million dollar money maker and an ugly battle between father and son becomes costly from wondering this business wars. We hope you enjoyed this episode. We invite you to subscribe on Apple. Podcasts spotify Google podcast stitcher iheartradio. Wherever you listen to podcasts. You'll find a link on the episodes just tap or swipe over the cover art and you'll see some offers more sponsors there. We hope you'll support our show by supporting them. If you like what you've heard we would love it if you give five star rating until your friends how to subscribe. There's another way you can support us. Just answer a short survey at wondering dot com slash survey and tell us what business war stories. You'd like to hear a quick note about the conversations in this episode. We can't know exactly what was said at the time but this dialogue is based on our best research. If you'd like to learn more about starbucks we recommend pour your heart into it by Howard Schultz. I'm your host David Brown. Elizabeth K wrote this story. Karen low is our senior producer and editor edited and produced by. Emily Frost. Sound design by. Kyle Randall are executive producers. Jenny Lower Beckmann and marshal. Louis created by non Lopez for wondering shopping on Rodeo drive and flying on private planes that glamorous life of the rich and famous or at least. That's what they want you to think. Even the rich is a new podcast from wondering it gives you the real inside scoop on the drama that keeps famous families like the royals and the Kardashians in the spotlight. I'm Brooke and Marisha and we're the house of even the rich. Our show is a world where the stakes are high. And the rules don't apply. Even the rich is out on March tenth on Apple podcasts. Spotify or wherever? You're listening right now.