Starbucks Makes Key Management Shift in Americas: How Customers May Notice

Jon C. Ogg

Starbucks Corp. (NASDAQ: SBUX) has become one of the biggest and best brands in the entire world. It revolutionized the coffee business, and Starbucks wants to take on new frontiers like specialty shops, tea and perhaps even wine. A small announcement was made on Monday about a management change. This may not impact the role of Howard Schultz, but the management change pertains to the group president of the United States and the Americas.

Cliff Burrows, who is listed as group president for the United States and Americas, will assume the role of group president of Siren Retail. He will remain a member of Starbucks senior leadership team and will report to Howard Schultz, chairman and CEO.

What matters so much about this management change is that Burrows has been responsible for all of Starbucks operations in the United States, Canada and Latin America. Prior to this role as group president, he was president of Starbucks Coffee U.S. and Americas from 2011 to 2013 and was responsible for the company’s U.S. operations from March 2008 to October 2011.

Burrows joined Starbucks in 2001 as managing director of the United Kingdom. In April 2006, Cliff was named president for Starbucks Coffee Europe, Middle East and Africa, where he led the region as it grew to more than 1,350 stores across 24 countries.

The second issue that matters is that this sounds like more involvement of Schultz on the future concepts and the global strategy. The release said of Schultz:

As part of these leadership changes, Mr. Schultz will increase his focus on global strategy, global store development and store design innovation to position Starbucks for its next wave of global growth. He will also continue to work closely with his Senior Leadership Team to ensure continued disciplined growth and operational excellence around the world.

Starbucks’ press release said the following of Burrows’s future duties and what he will oversee:

In this new role, Mr. Burrows will have global responsibility for the Starbucks Reserve Roastery & Tasting Rooms, as well as the Starbucks Reserve-only stores. He will also lead the expansion of stand-alone Princi locations including integration of Princi as the exclusive food purveyor at the Starbucks Reserve Roastery & Tasting Rooms and the Starbucks Reserve-only stores. In addition, Mr. Burrows will have responsibility globally for the Teavana retail business.

John Culver, group president, China/Asia Pacific (CAP), Channel Development and Emerging Brands will assume the role of group president, Starbucks Global Retail. His responsibility will be for Starbucks retail sales around the world. Culver will remain a member of the Starbucks senior leadership team and will continue to report to Kevin Johnson, president and chief operating officer.

Starbucks further said:

In addition to Mr. Burrows and Mr. Culver, also reporting directly to Mr. Johnson will be Scott Maw, executive vice president, chief financial officer, Lucy Helm, evp, general counsel and secretary, Michael Conway, president, Global Channel Development, as well as the senior leaders of the Company’s supply chain, technology, partner (human) resources and marketing organizations.

It might seem to be unlikely that Starbucks will see any immediate change from this news. Still, a new group head for the flagship stores in the Americas could end up bringing changes. Starbucks has gone through growing pains inside its stores, and that could mean that certain process changes could be noticed by in-store customers soon. Maybe, maybe not. Burrows might also be able to more easily focus the concept and growth efforts for the company while being less burdened by being in charge of the entire North American and Latin markets. Stay tuned.

Starbucks’ most recent earnings report left a bit of a gap compared to the endless upside of the past. Here is by how much analysts ratcheted target prices and estimates down.

Starbucks shares were last seen up eight cents at $57.98. Its 52-week range is $42.05 to $64.00, and its consensus analyst price target is now $66.91.