After slow growth and a summer of falling shares partially due to long lines, Starbucks may be banking on Brewer’s expertise in using mobile and digital to generate more growth.
Rosalind Brewer usually doesn’t drink coffee: Her order is iced green tea, unsweetened, with extra ice, twice a day.
That’s what she was drinking Wednesday shortly after Starbucks announced Brewer as its new chief operating officer and group president — the second-highest position after President and CEO Kevin Johnson.
Brewer is the first woman, and the first African American, to hold that title. She’ll oversee Starbucks’ operating businesses across Canada, the U.S. and Latin America.
Brewer is not quite an outsider — she joined the Starbucks board of directors in January. Yet she’s not an insider, having spent the past five years leading Sam’s Club, and six years at parent company Wal-Mart before that. She may be the best of both worlds, said Neil Stern, a retail analyst with McMillanDoolittle — someone who can change things without rocking the boat.
Starbucks’ growth has slowed in recent quarters, something the company blames partly on so many people using its mobile app that the staff can’t make coffee fast enough. Brewer has some relevant history: At Sam’s Club, she implemented online ordering, drive-through pickup, and scan-and-go technology, letting customers scan items with their own phones.
Brewer said she’s going to focus on improving Starbucks stores by stationing the right people at the right part of the building — without moving away from human elements like greeting the customer.
“I’ve been impressed with the work that (Starbucks) has done in the digital space,” Brewer said, “but you can only build that if you’ve got a strong base in the basics of running a good retail operation … Let’s face it — the mobile app has been fantastic for this brand. And anytime something is new and goes this well, it’s time to make sure that as this thing grows, we’ve got every piece of our business intact.”
“She’s a world-class retail operator,” Johnson said. “She brought a lot of insight from her past experience.”
In a regulatory filing, Starbucks said Brewer will be paid an annual base salary of $1 million, and on joining the company will receive a signing bonus of $1 million and a $7 million equity award. Brewer, who met with some Starbucks employees Wednesday, will start her job and will be based at the company’s Seattle headquarters beginning Oct. 2.
Starbucks is not just a different industry for Brewer; it’s also a different position in the industry. Whereas Sam’s Club was always outpaced by Costco, its major competitor in the world of members-only warehouse clubs, Starbucks doesn’t have a major rival at the same level “breathing down its neck,” Stern said.
Since no one is necessarily a threat to Starbucks, in Stern’s view, the challenges to Brewer’s goals are either a breakdown inside the store operations — like lines becoming too long — or just running out of space for more Starbucks outlets.
“At some point, you reach a saturation point on how many Starbucks the country can handle, and clearly it’s more than anybody ever thought, so who knows what that point is,” Stern said.
Brewer doesn’t think Starbucks has reached saturation yet, but says from here out, she wants “smart growth.”
Brewer is used to the kind of product-focused, detail-oriented work running Starbucks’ operations will throw her into. After growing up in Detroit and going to a technical high school originally built to train students for the city’s factories, Brewer earned a bachelor’s degree in chemistry from Spelman College in Atlanta and started as an organic chemist at Kimberly-Clark, the maker of Kleenex, Huggies diapers and Cottonelle paper products. But she was frustrated by the lack of control she had in research and development, she told Black Enterprise magazine in 2012, so she moved over to business.
In 2001, she enrolled in the Advanced Management Program at University of Pennsylvania’s Wharton School, and in 2006 she joined Wal-Mart as regional vice president of Georgia operations.
Brewer said one reason she was drawn to Starbucks is its diversity. She has spoken about how important company diversity is for years; while running Sam’s Club, she found herself the focus of right-wing backlash and a boycott campaign in 2015 when she appeared on CNN and said she was planning to call one of her suppliers and bring up the fact that its executives were all white males.
Brewer does want to improve diversity at Starbucks, but she thinks the company is doing well, especially on its board, which is 29 percent female and 36 percent minorities.
“I’m excited about what could happen next, but I am very appreciative of where it is right now,” Brewer said. “It’s in great shape.”