Starbucks

For other uses, see Moby-Dick#Starbuck.

Starbucks Corporation

Type	Public company
Traded as	NASDAQ: SBUX NASDAQ-100 Component
Industry	Restaurants Retail coffee and tea Retail beverages Entertainment
Founded	Pike Place Market in Seattle, Washington (March 30, 1971 (1971-03-30))
Founder(s)	Jerry Baldwin Gordon Bowker Zev Siegl
Headquarters	Seattle, Washington, U.S.
Number of locations	17,009 (FY 2010)[1]
Area served	57 countries
Key people	Howard Schultz (Chairman, President and CEO)
Products	Whole bean coffee Boxed tea Made-to-order beverages Bottled beverages Baked goods Merchandise Frappuccino beverages Smoothies
Services	Coffee
Revenue	US$ 10.71 billion (FY 2010)[1]
Operating income	US$ 1.42 billion (FY 2010)[1]
Net income	US$ 945.6 million (FY 2010)[1]
Total assets	US$ 6.38 billion (FY 2010)[1]
Total equity	US$ 3.68 billion (FY 2010)[1]
Employees	137,000 (2010)[2]
Subsidiaries	Starbucks Coffee Company Tazo Tea Company Seattle's Best Coffee Torrefazione Italia Hear Music Ethos Water Evolution Fresh
Website	Starbucks.com

Starbucks Corporation (NASDAQ: SBUX) is an international coffee and coffeehouse chain based in Seattle, Washington. Starbucks is the largest coffeehouse company in the world,^[2] with 17,009 stores in 55 countries, including over 11,000 in the United States, over 1,000 in Canada, over 700 in the United Kingdom, and over 150 in Turkey.^[1][3]

Starbucks sells drip brewed coffee, espresso-based hot drinks, other hot and cold drinks, coffee beans, salads, hot and cold sandwiches and panini, pastries, snacks, and items such as mugs and tumblers. Through the Starbucks Entertainment division and Hear Music brand, the company also markets books, music, and film. Many of the company's products are seasonal or specific to the locality of the store. Starbucks-brand ice cream and coffee are also offered at grocery stores.

From Starbucks' founding in later forms in Seattle as a local coffee bean roaster and retailer, the company has expanded rapidly. In the 1990s, Starbucks was opening a new store every workday, a pace that continued into the 2000s. The first store outside the United States or Canada opened in the mid-1990s, and overseas stores now constitute almost one third of Starbucks' stores.^[4] The company planned to open a net of 900 new stores outside of the United States in 2009,^[5] but has announced 900 store closures in the United States since 2008.^[6]

History

The Starbucks store at 1912 Pike Place. This is the second location of the original Starbucks, which was at 2000 Western Avenue from 1971 to 1976.

Baristas work inside the Seattle store at 1912 Pike Place.

Founding

The first Starbucks was opened in Seattle, Washington, on March 30, 1971 by three partners: English teacher Jerry Baldwin, history teacher Zev Siegl, and writer Gordon Bowker. The three were inspired by entrepreneur Alfred Peet (whom they knew personally) to sell high-quality coffee beans and equipment.^[7] The name is taken from Moby-Dick; after Pequod was rejected by one of the co-founders, the company was named after the first mate on the Pequod, Starbuck.

From 1971–1976, the first Starbucks was at 2000 Western Avenue. The first costumer was Carlotta Rojas it then was relocated to 1912 Pike Place, where it remains to this day. During their first year of operation, they purchased green coffee beans from Peet's, then began buying directly from growers.

The Starbucks Center, Seattle. The company HQ, in the old Sears, Roebuck and Co. catalog distribution center building

Entrepreneur Howard Schultz joined the company in 1982 as Director of Retail Operations and Marketing, and after a trip to Milan, advised that the company should sell coffee and espresso drinks as well as beans. Seattle had become home to a thriving countercultural coffeehouse scene since the opening of the Last Exit on Brooklyn in 1967, the owners rejected this idea, believing that getting into the beverage business would distract the company from its primary focus. To them, coffee was something to be prepared in the home, but they did give away free samples of pre-made drinks. Certain that there was money to be made selling pre-made drinks, Schultz started the Il Giornale coffee bar chain in April 1986.^[8]

Sale and expansion

In 1984, the original owners of Starbucks, led by Jerry Baldwin, took the opportunity to purchase Peet's (Baldwin still works there). In 1987, they sold the Starbucks chain to Schultz's Il Giornale, which rebranded the Il Giornale outlets as Starbucks and quickly began to expand. Starbucks opened its first locations outside Seattle at Waterfront Station in Vancouver, British Columbia, and Chicago, Illinois, that same year. At the time of its initial public offering on the stock market in 1992, Starbucks had grown to 165 outlets.

International expansion

Currently Starbucks is present in more than 55 countries.

Africa	North America	Central America	South America	Oceania	Asia	Europe
Egypt South Africa Morocco	Canada Mexico United States	El Salvador Guatemala Puerto Rico The Bahamas	Argentina Brazil Chile Peru Bolivia (Opens in 2012)	Australia New Zealand	Bahrain China Hong Kong Indonesia Japan Jordan Lebanon Kuwait Macau Malaysia Oman Philippines Qatar Saudi Arabia Singapore South Korea Taiwan Thailand United Arab Emirates Former locations Israel	Austria Belgium Bulgaria Czech Republic Denmark France Germany Greece Cyprus Hungary Ireland Netherlands Poland Portugal Romania Russia Spain Sweden Switzerland Turkey UK Jersey Isle of Man
International presence of Starbucks stores

The first Starbucks location outside North America opened in Tokyo, Japan, in 1996. Starbucks entered the U.K. market in 1998 with the $83 million^[9] acquisition of the then 60-outlet, UK-based Seattle Coffee Company, re-branding all the stores as Starbucks. In September 2002 Starbucks opened its first store in Latin America, in Mexico City. In August 2003 Starbucks opened its first store in South America in Lima, Peru. In November 2010, Starbucks opened the first Central American store in El Salvador's capital, San Salvador.^[10] On March 17, 2011 Starbucks opened its third restaurant in Central America and its first in Guatemala City , Guatemala.^[11]

one of the Starbucks Beirut branches

In April 2003, Starbucks completed the purchase of Seattle's Best Coffee and Torrefazione Italia from AFC Enterprises, bringing the total number of Starbucks-operated locations worldwide to more than 6,400. On September 14, 2006, rival Diedrich Coffee announced that it would sell most of its company-owned retail stores to Starbucks. This sale includes the company-owned locations of the Oregon-based Coffee People chain. Starbucks converted the Diedrich Coffee and Coffee People locations to Starbucks, although the Portland airport Coffee People locations were excluded from the sale.^[12]

Many bookstores have Starbucks licensed stores within them, including Barnes & Noble in the United States, Chapters-Indigo in Canada (company operated), Livraria Saraiva and Fnac in Brazil and B2S in Thailand.

The Starbucks location in the former imperial palace in Beijing closed in July 2007. The coffee shop had been a source of ongoing controversy since its opening in 2000 with protesters objecting that the presence of the American chain in this location "was trampling on Chinese culture."^{[13][14][15][16]} Also in 2007, Starbucks cancelled plans to expand into India,^[17] but opened its first store in Russia, ten years after first registering a trademark there.^[18] In 2008, Starbucks continued its expansion, settling in Argentina, Belgium, Bulgaria, the Czech Republic and Portugal.^[19] In Buenos Aires, the biggest Starbucks store in Latin America was opened. In April 2009, Starbucks entered Poland.^[20] New stores will be opened in Algeria.^[21] Starbucks has also opened its doors on August 5, 2009, in Utrecht, Netherlands. On October 21, 2009 it was announced that Starbucks will finally establish in Sweden, starting with a location at Arlanda airport outside Stockholm.^[22] On June 16, 2010 Starbucks opened its first store in Budapest, Hungary.

In May 2010, Southern Sun Hotels South Africa announced that they had signed an agreement with Starbucks that would enable them to brew Starbucks coffees in select Southern Sun and Tsonga Sun hotels in South Africa. The agreement was partially reached in order for Starbucks coffees to be served in the country in time for the commencement of the 2010 FIFA World Cup hosted by South Africa.^[23]

In December 2010, Starbucks debuted their first ever Starbucks at sea, where with a partnership with Royal Caribbean International; Starbucks opened a shop aboard their Allure of the Seas Royal Caribbean's largest ship. Also the largest ship in the world.^[24]

Starbucks is planning to open its third African location, after Egypt and South Africa, in Algeria. A partnership with Algerian food company Cevital will see Starbucks open its first Algerian store in Algiers.^[21]

In February 2011, Starbucks officially started selling their coffee in Norway, but Starbucks never opened a shop there. Instead they supply Norwegian food shops with Starbucks.

In January 2011, Starbucks and Tata Coffee, Asia's largest coffee plantation company, announced plans for a strategic alliance to bring Starbucks to India later that year. Starbucks plans set up stores in Tata retail locations and hotels in India, and also to source and roast coffee beans at Tata Coffee's Kodagu facility.^[25]

In March 2011, Starbucks opened its first location in Guatemala City, Guatemala, at Condado Concepcion shopping district. A second store is scheduled to open at Oakland Mall in September.

In October 2011, Starbucks opened another location in Beijing, China, at the Beijing Capital International Airport's Terminal 3, international departures hall; making the company's 500th store in China. The store is the 7th location at the airport. The company plans to expand to 1,500 stores in China by 2015.^[26]

In November 2011, Starbucks opened another Starbucks at sea, this time on Royal Caribbean's second largest ship the Oasis of the Seas.^[27]

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  Starbucks at West Coast Plaza, Singapore

• 

  Starbucks in İzmir, Turkey

• 

  One Starbucks location in Hong Kong uses a retro Bing Sutt design

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  Starbucks in Angeles City, Philippines

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  Starbucks in Lima, Peru

• 

  Starbucks in San Salvador, El Salvador

Starbucks at Changi Airport, Singapore Starbucks at Harbor Square, Manila

Restaurant experiment

In 1999, Starbucks experimented with eateries in the San Francisco Bay area through a restaurant chain called Circadia.^[28] These restaurants were soon "outed" as Starbucks establishments and converted to Starbucks cafes.

Corporate governance

Howard Schultz, CEO of Starbucks

Orin C. Smith was President and CEO of Starbucks from 2001 to 2005.

Starbucks' chairman, Howard Schultz, has talked about making sure growth does not dilute the company's culture^[29] and the common goal of the company's leadership to act like a small company.

In January 2008, Chairman Howard Schultz resumed his roles as President and CEO after an eight year hiatus, replacing Jim Donald, who took the posts in 2005 but was asked to step down after sales slowed in 2007. Schultz aims to restore what he calls the "distinctive Starbucks experience" in the face of rapid expansion. Analysts believe that Schultz must determine how to contend with higher materials prices and enhanced competition from lower-price fast food chains, including McDonald's and Dunkin' Donuts. Starbucks announced it will discontinue its warm breakfast sandwich products, originally intended to launch nationwide in 2008, in order to refocus the brand on coffee, but the sandwiches were reformulated to deal with complaints and the product line stayed.^[30] On February 23, 2008, Starbucks closed its stores from 5:30–9:00 pm local time to train its baristas.^[31][32]

Recent changes

In March 2008, Schultz made several announcements to Starbucks shareholders. Schultz introduced Starbucks' "state of the art espresso system",^[33] the Thermoplan AG manufactured Mastrena, which replaced their previous superauto, the Thermoplan Verismo 801 (known internationally as the Thermoplan Black & White). Starbucks also announced that the company hopes to enter the energy drink market. Pre-ground beans will no longer be used, so that the grinding of whole bean coffee will "bring aroma, romance and theater" to American stores. The company also announced the acquisition of The Coffee Equipment Company,^[33] the manufacturer of the Clover Brewing System. They are currently test marketing this "fresh-pressed" coffee system at six Starbucks locations; three in Seattle, and three in Boston.^[34]

A typical sales area, this one in Peterborough, UK, showing a display of food and the beverage preparation area

Starbucks stopped using milk originating from rBGH-treated cows in 2007.^[35]

In early 2008, Starbucks started a community website, My Starbucks Idea, designed to collect suggestions and feedback from customers. Other users comment and vote on suggestions. Journalist Jack Schofield noted that "My Starbucks seems to be all sweetness and light at the moment, which I don't think is possible without quite a lot of censorship". The website is powered by the Salesforce software.^[36]

In May 2008, a loyalty program was introduced for registered users of the Starbucks Card (previously simply a gift card) offering perks such as free Wi-Fi Internet access, no charge for soy milk & flavored syrups, and free refills on brewed drip coffee.^[37] Free Wi-Fi Internet access varies in different regions. US & Canadian card holders can access 2 hours of Internet access through AT&T in the United States and through Bell Canada within Canada. In Germany customers can get 2 hour of free Wi-Fi through BT Openzone, and in Switzerland and Austria customers can get 30 minutes with a voucher card (through T-Mobile).

In June 2009, the company announced that it will be overhauling its menu and selling salads and baked goods without high-fructose corn syrup or artificial ingredients.^[38] The move is expected to attract health- and cost-conscious consumers and will not affect prices.^[38] At least three stores in Seattle were "debranded" to remove the logo and brand name, and remodel the stores as local coffee houses "inspired by Starbucks."^[39][40] The first, 15th Avenue Coffee and Tea, opened in July on Capitol Hill after Starbucks employees visited local coffee houses to look around. It serves wine and beer, and plans to host live music and poetry readings.^[41][42] The practice has been criticized as "local-washing", similar to greenwashing.^[43]

In September 2009, Starbucks in the UK rolled out free Wi-Fi at most of its outlets, working with its Wi-Fi partner BT Openzone. Customers with a Starbucks Card will be able to log-on to the Wi-Fi in-store for free with their card details, thereby bringing the benefits of the loyalty program in-line with the United States.^[44] Beginning in July 2010, Starbucks plans to offer free Wi-Fi in all of its US stores via AT&T and information through a partnership with Yahoo!. This is an effort to be more competitive against local chains, which have long offered free Wi-Fi, and against McDonald's, which began offering free wireless internet access in 2010.^[45] On June 30, 2010, Starbucks announced it would begin to offer unlimited and free Internet access via Wi-Fi to customers in all company-owned locations across Canada starting on July 1, 2010.^[46]

A store in Seattle known for its use of the corporation's new ideas will reopen in the fall of 2010 with modifications to the interior decorating and the addition of wine from Pacific Northwest vineyards. The espresso machines will be in the middle of the store to create what Starbucks calls a "coffee theater".^[47]

VIA "Ready Brew" instant coffee

Starbucks introduced a brand new line of instant coffee packets called VIA "Ready Brew", in March 2009. It was first unveiled in New York City with subsequent testing of the product also in Seattle, Chicago and London. The first two VIA flavors include Italian Roast and Colombia, which were then rolled out in October 2009, across the U.S. and Canada with Starbucks stores promoting the product with a blind "taste challenge" of the instant versus fresh roast. Many people could not tell the difference between the instant and fresh brewed coffee. Some analysts theorized that by introducing instant coffee, Starbucks will devalue its own brand.^[48] After the VIA was successfully launched, they introduced the Decaf Italian Roast as well as a sweetened version called "iced". In October 2010, Starbucks expanded the VIA selection by introducing four new presweetened flavored versions: Vanilla, Caramel, Cinnamon Spice and Mocha. With the holiday season in mind in 2010, Starbucks also introduced the Christmas Blend and Decaf Christmas blend. Also as a celebration of their 40th year anniversary Tribute Blend VIA was introduced in March 2011.

Store closures

In 2003 Starbucks closed all six of its locations in Israel, citing "on-going operational challenges" and a "difficult business environment."^[49][50]

On July 1, 2008, the company announced it was closing 600 underperforming company-owned stores and cutting U.S. expansion plans amid growing economic uncertainty.^[51][52] On July 29, 2008, Starbucks also cut almost 1,000 non-retail jobs as part of its bid to reenergize the brand and boost its profit. Of the new cuts, 550 of the positions were layoffs and the rest were unfilled jobs.^[53] These closings and layoffs effectively ended the company’s period of growth and expansion that began in the mid-1990s.

Starbucks also announced in July 2008 that it would close 61 of its 84 stores in Australia by August 3, 2008.^[54] Nick Wailes, an expert in strategic management of the University of Sydney, commented that "Starbucks failed to truly understand Australia’s cafe culture."^[55]

On January 28, 2009, Starbucks announced the closure of an additional 300 underperforming stores and the elimination of 7,000 positions. CEO Howard Schultz also announced that he had received board approval to reduce his salary.^[56] Altogether, from February 2008 to January 2009, Starbucks terminated an estimated 18,400 U.S. jobs and began closing 977 stores worldwide.^[57]

In August 2009, Ahold announced closures and rebranding for 43 of their licensed store Starbucks kiosks for their US based Stop & Shop and Giant supermarkets. However, Ahold has not yet abandoned the licensed Starbucks concept; they plan to open 5 new licensed stores by the end of 2009.^[58][59]

Unbranded stores

In 2009, at least three stores in Seattle were debranded to remove the logo and brand name, and remodel the stores as local coffee houses "inspired by Starbucks."^[39][40] CEO Howard Schultz says the unbranded stores are a "laboratory for Starbucks".^[60] The first, 15th Avenue Coffee and Tea, opened in July 2009 on Capitol Hill. It serves wine and beer, and plans to host live music and poetry readings.^[41] Although the stores have been called "stealth Starbucks"^[39][42] and criticized as "local-washing",^[43] Schultz says that "It wasn't so much that we were trying to hide the brand, but trying to do things in those stores that we did not feel were appropriate for Starbucks."^[60]

2009 New York City bombing

At approximately 3:30 am on May 25, 2009, a Starbucks store on the Upper East Side in the Manhattan borough of New York City, New York, was bombed. A small improvised explosive device was used and damage was limited to exterior windows and a sidewalk bench; there were no injuries.^[61] Residents of apartments above the bombing site were briefly evacuated.^[62] Police believed at first that the bombing might be related to a serial bomber operating in Manhattan,^[62] because it was similar in nature to earlier bombings in Manhattan at the British and Mexican consulates, as well as a U.S. military-recruiting center in Times Square.^[63] However, a 17-year-old boy was arrested that July after boasting that he bombed the store to emulate the movie Fight Club.^[64]

Peet's in discussions to sell itself to Starbucks

Multiple news sources, including FT, BusinessWeek, among others, report that Peet's is in talks to sell itself to rival Starbucks, and both declined to acknowledge the talks.^[65][66][67]

Juice bars

On November 10, 2011 Starbuck Corporation has announced of bought juice company Evolution Fresh for $30 million in cash and plans to start a chain of juice bars starting in around middle of 2012, venturing into territory stakes out by Jamba Inc.^[68]

Intellectual property

Starbucks at Ibn Battuta Mall, Dubai

The store in Insadong, Seoul, South Korea with Hangeul script sign

Starbucks Coffee (星巴克咖啡) in mainland China

Starbucks U.S. Brands, LLC, is a Starbucks-owned company that currently holds approximately 120 Starbucks Coffee Company patents and trademarks. It is located at 2525 Starbucks Way in Minden, Nevada.^[69]

Name

The company is named in part after Starbuck, Captain Ahab's first mate in the novel Moby-Dick, as well as a turn-of-the-century mining camp (Starbo or Storbo) on Mount Rainier. According to Howard Schultz's book Pour Your Heart Into It: How Starbucks Built a Company One Cup at a Time, the name of the company was derived from Moby-Dick, although not in as direct a fashion as many assume. Gordon Bowker liked the name "Pequod" (the ship in the novel), but his then creative partner Terry Heckler responded, "No one's going to drink a cup of Pee-quod!" Heckler suggested "Starbo". Brainstorming with these two ideas resulted in the company being named after the Pequod's first mate, Starbuck.^[70]

International names

Starbucks is known internationally by the following names:

• Arabic-speaking countries: ستاربكس (transliteration: stārbaks)
• Bulgaria: Старбъкс (transliteration: Starbâks)
• China, Hong Kong, Macau, Taiwan: 星巴克 Pinyin: xīngbākè (星 xīng means "star", while 巴克 is a transliteration of "-bucks")
• Israel: סטארבקס (transliteration: sṭārbaqs)
• Japan: スターバックス (transliteration: sutābakkusu), and the abbreviation スタバ is also used in slang
• Russia: Старбакс (transliteration: Starbaks)
• South Korea: 스타벅스 (transliteration: seutabeokseu), but the Korean translation 별다방 (star-teahouse) is also used in slang
• Quebec, Canada: Café Starbucks Coffee^[71]
• Thailand: สตาร์บัคส์ pronounced [satāːbākʰ]

Logo

In 2006, Valerie O'Neil, a Starbucks spokeswoman, said that the logo is an image of a "twin-tailed siren".^[72] The logo has been significantly streamlined over the years. In the first version, which was based on a 16th-century "Norse" woodcut,^[70] the Starbucks siren was topless and had a fully visible double fish tail.^[73] The image also had a rough visual texture and has been likened to a melusine.^[74] In the second version, which was used from 1987–92, her breasts were covered by her flowing hair, but her navel was still visible. The fish tail was cropped slightly, and the primary color was changed from brown to green, a nod to Bowker's Alma Mater, the University of San Francisco.^[75] In the third version, used between 1992 and 2011, her navel and breasts are not visible at all, and only vestiges remain of the fish tails. The original "woodcut" logo has been moved to the Starbucks' Headquarters in Seattle.

At the beginning of September 2006 and then again in early 2008, Starbucks temporarily reintroduced its original brown logo on paper hot-drink cups. Starbucks has stated that this was done to show the company's heritage from the Pacific Northwest and to celebrate 35 years of business. The vintage logo sparked some controversy due in part to the siren's bare breasts,^[76] but the temporary switch garnered little attention from the media. Starbucks had drawn similar criticism when they reintroduced the vintage logo in 2006.^[77] The logo was altered when Starbucks entered the Saudi Arabian market in 2000 to remove the siren, leaving only her crown,^[78] as reported in a Pulitzer Prize-winning column by Colbert I. King in The Washington Post in 2002. The company announced three months later that it would be using the international logo in Saudi Arabia.^[79]

In January 2011, Starbucks announced that they would make small changes to the company's logo, removing the Starbucks wordmark around the siren and enlarging the siren image itself.^[80]

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  Original brown logo, used from 1971–1987.

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  Green logo used from 1987-2010, still being used as a secondary logo.

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  Redesigned logo used from 2011-present.

Parodies and infringements

Starbucks has been a target of parodies and imitations of its logo, and has used legal action against those it perceives to be infringing on its intellectual property. In 2000, San Francisco cartoonist Kieron Dwyer was sued by Starbucks for copyright and trademark infringement after creating a parody of its siren logo and putting it on the cover of one of his comics; later placing it on coffee mugs, t-shirts, and stickers that he sold on his website and at comic book conventions. Dwyer felt that since his work was a parody it was protected by his right to free speech under U.S. law. The case was eventually settled out of court, as Dwyer claimed he did not have the financial ability to endure a trial case with Starbucks. The judge agreed that Dwyer's work was a parody and thus enjoyed constitutional protection; however, he was forbidden from financially "profiting" from using a "confusingly similar" image of the Starbucks siren logo. Dwyer is currently allowed to display the image as an expression of free speech, but he can no longer sell it.^[81] In a similar case, a New York store selling stickers and T-shirts using the Starbucks logo with the words "f—k off" was sued by the company in 1999.^[82][83] An anti-Starbucks website, starbuckscoffee.co.uk, which encouraged people to deface the Starbucks logo^[84] was transferred to Starbucks in 2005,^[85][86] but has since resurfaced at www.starbuckscoffee.org.uk. Christian bookstores and websites in the US are selling a T-shirt featuring a logo with the mermaid replaced by Jesus and the words "Sacrificed for me" around the edge.^[87]

Other successful cases filed by Starbucks include the case won in 2006 against the chain Xingbake in Shanghai, China for trademark infringement, because the chain used a green-and-white logo with a name that sounded phonetically similar to the Chinese for Starbucks.^[88] Starbucks did not open any stores after first registering its trademark in Russia in 1997 and in 2002 a Russian lawyer successfully filed a request to cancel the trademark. He then registered the name with a Moscow company and asked for $600,000 to sell the trademark to Starbucks, but was ruled against in November 2005.^[18] Sam Buck, who owns a coffee store in Oregon, was prohibited from using her name on the shop front in 2006.^[89]

In 2003, Starbucks sent a cease-and-desist letter to "HaidaBucks Coffee House" in Masset, British Columbia, Canada. The store was owned by a group of young Haida men, commonly referred to as "bucks." After facing criticism, Starbucks dropped its demand after HaidaBucks dropped "coffee house" from its name.^[90]

Other cases have gone against the company. In 2005 Starbucks lost a trademark infringement case against a smaller coffee vendor in South Korea that operates coffee stations under the name Starpreya. The company, Elpreya, says Starpreya is named after the Norse goddess, Freja, with the letters of that name changed to ease pronunciation by Koreans. The court rejected Starbucks' claim that the logo of Starpreya is too similar to their own logo.^[91] A bar owner in Galveston, Texas, USA won the right to sell "Star Bock Beer" after a lawsuit by Starbucks in 2003 after he registered the name, but the 2005 federal court ruling also stated that the sale of the beer must be restricted to Galveston, a ruling upheld by the Supreme Court in 2007.^[92]

Ongoing cases include a dispute over the copyright application for Seattle’s Rat City Rollergirls logo in 2008^[93] The company claimed the roller derby league’s logo by a Washington artist^[94] was too similar to its own. Starbucks requested an extension to further examine the issue and possibly issue a complaint, which was granted by the Trademark Office. The July 16, 2008 deadline passed without action by the corporation.^[95] Starbucks launched action against an Indian cosmetics business run by Shahnaz Husain, after she applied to register the name Starstruck for use with coffee and related products. She said her aim was to open a chain of stores selling coffee and chocolate-based cosmetics.^[89]

Others have used the Starbucks logo unaltered and without permission, such as a café in Pakistan that used the logo in 2003 in its advertisements^[96] and a cafe in Cambodia in 2009, the owner saying that "whatever we have done we have done within the law".^[97]

Corporate social responsibility

In 2009, Starbucks released an annual Corporate social responsibility report.^[98]

Environmental impact

Grounds for your Garden

In 1999, Starbucks started "Grounds for your Garden" to make their business more environmentally-friendly. This gives leftover coffee grounds to anyone requesting it for composting. Although not all stores and regions participate, customers can request and lobby their local store to begin the practice.

In 2004, Starbucks began reducing the size of their paper napkins and store garbage bags, and lightening their solid waste production by 816.5 metric tons (1.8 million pounds).^[99] In 2008, Starbucks was ranked No.15 on the U.S. Environmental Protection Agency's list of Top 25 Green Power Partners for purchases of renewable energy.^[100]

In October 2008, The Sun newspaper reported that Starbucks was wasting 23.4 million litres of water a day by leaving a tap constantly running for rinsing utensils in a 'dipper well' in each of its stores,^[101] but this is often required by governmental public health code.^[102]

In June 2009, in response to concerns over its excessive water consumption, Starbucks re-evaluated its use of the dipper well system. In September 2009, company-operated Starbucks stores in Canada & the United States successfully implemented a new water saving solution that meets government health standards. Different types of milk are given a dedicated spoon that remains in the pitcher and the dipper wells were replaced with push button metered faucets for rinsing. This will reportedly save up to 150 gallons of water per day in every store.^{[citation needed]}

A bin overflowing with Starbucks cups

Recycling

The U.S. Food and Drug Administration granted the first-ever approval to use recycled content in food packaging for Starbucks coffee cups. In 2005 Starbucks received the National Recycling Coalition Recycling Works Award.^[103]

Starbucks bought 2.5 billion cups for stores in North America in 2007. The 10% recycled paper cups used by Starbucks are not recyclable, because the plastic coating that prevents the cup from leaking also prevents it from being recycled. The plastic cups used for cold drinks are also non-recyclable in most regions. Starbucks cups were originally made using plastic No.1 (polyethylene terephthalate, PETE) but were changed to plastic No.5 (polypropylene, PP). The former type of plastic can be recycled in most regions of the U.S. whereas the latter cannot. Starbucks is considering using biodegradable material instead of plastic to line the cups, and is testing composting of the existing cups. The exception to this is stores in Winnipeg, Manitoba, Canada, where paper cups are recycled to a local company called "Wriggler's Wranch", where they are composted. The majority of Starbucks stores do not have recycling bins; only 1/3 of company-owned stores recycled any materials in 2007,^[104] however improvements have since been made and recycling bins are popping up in more stores (the only thing hindering Starbucks' ability to have bins in every store is the lack of facilities for storage and collection of recycling in certain areas.)^{[citation needed]} Allen Hershkowitz of the Natural Resources Defense Council says that Starbucks claimed they were using only 10% recycled material partly because the recycled material costs more.^[105]

Starbucks gives customers a 10-cent discount when they bring their own reusable cup, and it now uses corrugated cup sleeves made from 60 percent post-consumer recycled fiber.^[104]

Fair trade

Starbucks coffee beans

In 2000, the company introduced a line of fair trade products.^[106] Of the approximately 136,000 metric tons (300 million pounds) of coffee Starbucks purchased in 2006, only about 6% was certified as fair trade.^[107]

According to Starbucks, they purchased 2,180 metric tons (4.8 million pounds) of Certified Fair Trade coffee in fiscal year 2004 and 5,220 metric tons (11.5 million pounds) in 2005. They have become the largest buyer of Certified Fair Trade coffee in North America (10% of the global market). Transfair USA,^[108] the only third-party certifier of Fair Trade Certified coffee in the United States, has noted the impact Starbucks has made in the area of Fair Trade and coffee farmer's lives:

Since launching {its} FTC coffee line in 2000, Starbucks has undeniably made a significant contribution to family farmers through their rapidly growing FTC coffee volume. By offering FTC coffee in thousands of stores, Starbucks has also given the FTC label greater visibility, helping to raise consumer awareness in the process.

All espresso roast sold in the UK and Ireland is 100% Fairtrade.^[109] This means that the coffee in all cappuccinos and lattes are brewed with 100% Fairtrade Espresso.

Groups such as Global Exchange are calling for Starbucks to further increase its sales of fair trade coffees.^{[citation needed]}

Beyond Fair Trade Certification, Starbucks argues that it pays above market prices for all of its coffee. According to the company, in 2004 it paid on average $1.42 per pound ($2.64 kg) for high-quality coffee beans.^[110] This is in comparison to commodity prices which were as low as $0.50–$0.60 in 2003–04.^{[citation needed]}

After a long-running dispute between Starbucks and Ethiopia, Starbucks agreed to support and promote Ethiopian coffees. An article in BBC NEWS,^[111] states that Ethiopian ownership of popular coffee designations such as Harrar and Sidamo is acknowledged even if they are not registered. The main reason Ethiopia fought so hard for this acknowledgement was to allow its poverty-stricken farmers a chance to make more money. Unfortunately, this has not been the case. In 2006 Starbucks says it paid $1.42 per pound for its coffee. At,^[112] the coffee Starbucks bought for $1.42 per pound had a selling price, after transportation, processing, marketing, store rentals, taxes and staff salary and benefits of $10.99 per pound. As of August 2010, Starbucks sells only one Ethiopian coffee on its website and it is proclaimed by the website to be new.

Ethos water

A display of Ethos water

Ethos, a brand of bottled water acquired by Starbucks in 2005, is sold at locations throughout North America. Ethos bottles feature prominent labeling stating "helping children get clean water", referring to the fact that $.05 from each $1.80 bottle sold ($.10 per bottle in Canada) is used to fund clean water projects in under-developed areas. Although sales of Ethos water have raised over $6,200,000 for clean water efforts, the brand is not incorporated as a charity. Critics have argued that the claim on the label misleads consumers into thinking that Ethos is primarily a charitable organization, when it is actually a for-profit brand and the vast majority of the sale price (97.2%) does not support clean-water projects.^[113][114] The founders of Ethos have stated that the brand is intended to raise awareness of third-world clean water issues and provide socially responsible consumers with an opportunity to support the cause by choosing Ethos over other brands.^[115] Starbucks has since redesigned the American version of the Ethos water bottles, stating the amount of money donated per bottle in the description.

Product Red

Starbucks began selling Product Red goods in November 2008, enabling the supply of AIDS medicine for 3,800 people for a year.^[116] With each purchase with a (STARBUCKS) RED card Starbucks sends 5 cents to the Global Relief fund in order to help people living with HIV/AIDS in African nations. "(RED) is making remarkable progress in the worldwide effort to address AIDS in Africa," said Howard Schultz, Starbucks chairman, president and CEO. "We have a deep partnership with coffee growing regions in Africa. We are proud to partner with our customers to contribute toward an AIDS-free Africa ^[117] Starbucks sells coffee from ten African countries including Burundi, Cameroon, Congo, Ethiopia, Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia. Since the initiation of RED products Starbucks has continued the parntership wtith the Global Relief fund.

New Orleans

Main article: Reconstruction of New Orleans

In 2008, Starbucks announced a volunteer program in New Orleans, three years after Hurricane Katrina. According to Rebuilding Together New Orleans, employees will work on various projects, including houses, planting trees and an urban garden. A volunteer coordinator said that "I've never seen this magnitude from one corporation before, I'll say that, in terms of the sheer numbers."^[118]

Sparkhope

In 2004, UNICEF Philippines and Starbucks launched SparkHope, a programme in which Starbucks stores in the Philippines provide early childhood care and development for children in a particular community. An area in each store contains a donation box and shows photos of the adopted community and information about UNICEF’s programme.^[119]

Starbucks Foundation

Starbucks Foundation latest goals are stated as,

-Nurturing young leaders

-Supporting tea and coffee communities

-Access to get clean water

-Fostering education in China

-Rebuilding the Gulf Coast ^[120]

Community

Starbucks has developed various community service projects based around local Starbucks branches. In April 2011 Starbucks became involved in Global Month of Service. Starbucks formed over 1400 community service projects, using 60,000 volunteers from 30 countries on 4 continents. 156,000 hours of community service were counted after 30 days. The efforts provided approx 3.3 million USD of fiscal value in communities by service. Starbucks provides more local opportunities to become involved in service through their website and community cafes.^[121]

Youth Action

The Starbucks Foundation was formed in 1977 focusing on developing youth literacy programs. Since then the Foundation has moved into providing grants to youth programs and community development. Starbucks Shared Planet Youth Action Grants focuses on funding community service projects developed by youth and focused on youth action. The Starbucks Foundation reviews community service project admissions on an annual basis. These programs are then chosen to receive grants based on quality and relevance as required by the Starbucks Foundation Grant Guidelines. Starbucks has partnered with many grant organizations providing funds for youth action. The goals of the youth action forum were stated, to engage 50,000 young people and contribute 1 million hours of community service per year by the year 2015. In 2010 the Starbucks Global Responsibility Report documented a 2.8% growth rate of community service hours delivered, reaching 191,224 hours of community service in 2010. In 2010 Starbucks reached their youth action goal involving a total of 53,736 youth in 2010. The Starbucks Youth Action Grants provided 100 grants in 2010 giving a total of $2.6 million worldwide. ^[122]

Green Building

Starbucks has begun focusing on Green Building for all cafes and outlets. In 2010 Starbucks finished their part in the pilot phase of the U.S. Green Building Council’s LEED Volume Certification pilot program. Ten stores were approved by the USGBC. ^[123] The focus of Starbucks infrastructure is energy savings, water conservation, installations of post-industrial material when possible, improving lighting efficiency, using recycled flooring tiles, using wood products that are Forest Stewardship Council certified when they are available, and using paints with lower amounts of volatile organic chemicals. ^[124]

Criticism and controversy

Two Starbucks stores in one shopping center in Queens, New York

Market strategy

Some of the methods Starbucks has used to expand and maintain their dominant market position, including buying out competitors' leases, intentionally operating at a loss, and clustering several locations in a small geographical area (i.e., saturating the market), have been labeled anti-competitive by critics.^[125] For example, Starbucks fueled its initial expansion into the UK market with a buyout of Seattle Coffee Company, but then used its capital and influence to obtain prime locations, some of which operated at a financial loss. Critics claimed this was an unfair attempt to drive out small, independent competitors, who could not afford to pay inflated prices for premium real estate.^[126] In the 2000s, Starbucks greatly increased its "licensed store" system, which permits Starbucks licenses only if they contribute to less than 20% of the licensee's gross income, are inside other stores or in limited or restricted access spaces, as to not dilute the brand image. License agreements are rare in volume and usually only made with Fortune 1000 or similar sized chain stores.^[127] The licensed store system can create the illusion of 2 or more Starbucks cafes in the same shopping plaza, when one is a standalone company owned, and the others are licensed. The menus of licensed stores can be the same or trimmed or modified versions of the cafes, or be positioned as independent cafes that happen to sell Starbucks products (ex. Barnes & Noble).

Labor disputes

The Reverend Billy leading an anti-Starbucks protest in Austin, Texas in 2007

Starbucks workers in seven stores have joined the Industrial Workers of the World (IWW) as the Starbucks Workers Union since 2004.^[128]

According to a Starbucks Union press release, since then the union membership has begun expanding to Chicago and Maryland in addition to New York City, where the movement originated.^[129][130] On March 7, 2006, the IWW and Starbucks agreed to a National Labor Relations Board settlement in which three Starbucks workers were granted almost US$2,000 in back wages and two fired employees were offered reinstatement.^{[131][132][133]} According to the Starbucks Union, on November 24, 2006, IWW members picketed Starbucks locations in more than 50 cities around the world in countries including Australia, Canada, Germany, and the UK, as well as U.S. cities including New York, Chicago, Minneapolis and San Francisco,^[134] to protest the firing of five Starbucks Workers Union organizers by Starbucks and to demand their reinstatement.

Some Starbucks baristas in Canada,^[135] Australia and New Zealand,^[136] and the United States^[137] belong to a variety of unions.

In 2005, Starbucks paid out US$165,000 to eight employees at its Kent, Washington, roasting plant to settle charges that they had been retaliated against for being pro-union. At the time, the plant workers were represented by the International Union of Operating Engineers. Starbucks admitted no wrongdoing in the settlement.^[128]

A Starbucks strike occurred in Auckland, New Zealand, on November 23, 2005.^[136] Organized by Unite Union, workers sought secure hours, a minimum wage of NZ$12 an hour, and the abolition of youth rates. The company settled with the Union in 2006, resulting in pay increases, increased security of hours, and an improvement in youth rates.^[138]

Anti-Starbucks demonstration in Beirut, Lebanon

In March 2008, Starbucks was ordered to pay baristas over US$100 million in back tips in a Californian class action lawsuit launched by baristas alleging that granting shift-supervisors a portion of tips violates state labor laws. The company plans to appeal. Similarly, an 18 year-old barista in Chestnut Hill, MA has filed another suit with regards to the tipping policy. Massachusetts law also states that managers may not get a cut of tips.^[139][140] A similar lawsuit was also filed in Minnesota on March 27, 2008.^[141]

Opening without planning permission

Starbucks has been accused by local authorities of opening several stores in the United Kingdom in retail premises, without the planning permission for a change of use to a restaurant. Starbucks has argued that "Under current planning law, there is no official classification of coffee shops. Starbucks therefore encounters the difficult scenario whereby local authorities interpret the guidance in different ways. In some instances, coffee shops operate under A1 permission, some as mixed use A1/A3 and some as A3".^[142]

In May 2008, a branch of Starbucks was completed on St. James's Street in Kemptown, Brighton, England, despite having been refused permission by the local planning authority, Brighton and Hove City Council, who claimed there were too many coffee shops already present on the street.^[143][144] Starbucks appealed the decision by claiming it was a retail store selling bags of coffee, mugs and sandwiches, gaining a six month extension,^[145] but the council ordered Starbucks to remove all tables and chairs from the premises, to comply with planning regulations for a retail shop.^[146] 2500 residents signed a petition against the store,^[147] but after a public inquiry in June 2009 a government inspector gave permission for the store to remain.^[148]

A Starbucks in Hertford won its appeal in April 2009 after being open for over a year without planning permission.^[149] Two stores in Edinburgh,^[150] one in Manchester,^[151] one in Cardiff,^[152] one in Pinner and Harrow, were also opened without planning permission.^[142] The Pinner cafe, opened in 2007, won an appeal to stay open in 2010.^[153] One in Blackheath, Lewisham^[154] was also under investigation in 2002 for breach of its licence, operating as a restaurant when it only had a licence for four seats and was limited to take away options. There was a considerable backlash from members of the local community who opposed any large chains opening in what is a conservation area. To this date, 8 years after the court case, the Starbucks is still operating as a takeaway outlet.

Alleged relationship with the Israeli military

There have been calls for boycott of Starbucks stores and products because it is alleged that Starbucks sends part of its profits to the Israeli military.^[155] This charge is leveled due to the fact that the President, Chairman and CEO of Starbucks Howard Schultz is Jewish. It has been long alleged that Schultz is "an active Zionist"^[156] and is a recipient of several Israeli awards including "The Israel 50th Anniversary Tribute Award" for "playing a key role in promoting a close alliance between the United States and Israel."^[156] In response to these allegations Starbucks issued a statement saying “Neither Chairman Howard Schultz nor Starbucks fund or support the Israeli Army. Starbucks is a non-political organization and does not support individual political causes.”^[156] Starbucks has been a regular target of activists protesting against the Israeli intervention in Gaza. Starbucks was forced to close a store in Beirut, Lebanon because of demonstrators shouting anti-Israel slogans and causing customers to flee.^[157] Protesters in Beirut told the Associated Press that they targeted Starbucks because they claim Chairman and CEO Howard Schultz donates money to the Israeli military. They hung several banners on the shop's window and used white tape to paste a Star of David over the green-and-white Starbucks sign. They also distributed a letter saying Schultz "is one of the pillars of the American Jewish lobby and the owner of the Starbucks," which they said donates money to the Israeli military.^[158] Starbucks responded by saying "Rumors that Starbucks Coffee Company and its management support Israel are unequivocally false. ... Starbucks is a nonpolitical organization and does not support political causes. Further, political preferences of a Starbucks partner [employee] at any level have absolutely no bearing on Starbucks company policies."^[158]

Violence against Starbucks in Canada and the UK

A store on Piccadilly with its windows boarded up after being smashed by protesters

A damaged front window of a Starbucks coffee shop in Toronto

On January 12, 2009, a Starbucks in Whitechapel Road in London was the target of vandalism by pro-Palestinian demonstrators who broke windows and reportedly ripped out fittings and equipment after clashes with riot police. In the early hours of the following morning a suspected makeshift firebomb was hurled into the premises, causing further damage.^{[159][160][161]}

On January 17, 2009, a pro-Gaza protest was held by the Stop the War Coalition in Trafalgar Square in central London. After the rally, two groups of people, some hiding their faces, smashed and looted two Starbucks on Piccadilly and Shaftesbury Avenue. Although the stores had requested greater police protection following the violence against a Starbucks the previous week, Scotland Yard stated it could "not stop thugs hell-bent on causing damage."^{[160][162][163][164]}

On June 26, 2010, during the 2010 G-20 Toronto summit protests, a Starbucks window was smashed, as well as other stores, by a "black bloc group". A supposed member, when asked why by a CBC radio reporter, cited Starbucks' support for Israel as being the reason.

"The Way I See It"

Quotes by artists, writers, scientists and others have appeared on Starbucks cups since 2005 in a campaign called "The Way I See It".^[165] Some of the quotes have caused controversy, including one by writer Armistead Maupin and another by Jonathan Wells that linked 'Darwinism' to eugenics, abortion and racism.^[166] Disclaimers were added to the cups noting that these views were not necessarily those of Starbucks.^{[citation needed]}

US military viral email

A US Marines Sergeant emailed ten of his friends in August 2004 having wrongly been told that Starbucks had stopped supplying the military with coffee donations because the company did not support the Iraq War. The email became viral, being sent to tens of millions of people. Starbucks and the originator sent out a correction,^[167] but Starbucks' VP of global communications, Valerie O'Neil, says the email is still forwarded to her every few weeks.^{[168][169][170]}

Coffee quality

The March 2007 issue of Consumer Reports of American fast-food chain coffee called McDonald’s Premium Roast coffee to be "cheapest and best", beating Starbucks, Burger King and Dunkin’ Donuts coffee.^[171] The magazine called Starbucks coffee "strong, but burnt and bitter enough to make your eyes water instead of open".^[171]

Wasting water

A British newspaper reported that Starbucks was wasting millions of liters of water daily, through a policy that mandated a constantly running tap in each store worldwide. Starbucks claimed the "dipper well" with the running tap was there for sanitary reasons. This dipper well has since been removed from most stores worldwide in favor of a model that does not require constantly running water.^[172]

Music, film, and television

Main article: Hear Music

Starbucks' second Hear Music Coffeehouse at the South Bank development adjacent to the River Walk in downtown San Antonio, Texas.

Hear Music is the brand name of Starbucks' retail music concept. Hear Music began as a catalog company in 1990, adding a few retail locations in the San Francisco Bay Area. Hear Music was purchased by Starbucks in 1999. Nearly three years later, in 2002, they produced a Starbucks opera album, featuring artists such as Luciano Pavarotti, followed in March 2007 by the hit CD "Memory Almost Full" by Paul McCartney, making McCartney the first artist signed to New Hear Music Label sold in Starbucks outlets. Its inaugural release was a big non-coffee event for Starbucks the first quarter of 2007.

In 2006, the company created Starbucks Entertainment, one of the producers of the 2006 film Akeelah and the Bee. Retail stores heavily advertised the film before its release and sold the DVD.^[173]

Partnership with Apple

Starbucks has agreed to a partnership with Apple to collaborate on selling music as part of the "coffeehouse experience". In October 2006, Apple added a Starbucks Entertainment area to the iTunes Store, selling music similar to that played in Starbucks stores. In September 2007 Apple announced that customers would be able to browse the iTunes Store at Starbucks via Wi-Fi in the US (with no requirement to login to the Wi-Fi network), targeted at iPhone, iPod touch, and MacBook users. The iTunes Store will automatically detect recent songs playing in a Starbucks and offer users the opportunity to download the tracks. Some stores feature LCD screens with the artist name, song, and album information of the current song playing. This feature has been rolled out in Seattle, New York City, and the San Francisco Bay Area, and was offered in limited markets during 2007–2008.^[174] During the fall of 2007, Starbucks also began to sell digital downloads of certain albums through iTunes. Starbucks gave away 37 different songs for free download through iTunes as part of the "Song of the Day" promotion in 2007, and a "Pick of the Week" card is now available at Starbucks for a free song download. Since 2011 Starbucks also gives away a "Pick of the Week" card for app downloads from the App Store. A Starbucks app is available in the iPhone App Store.

Partnership with MSNBC

Starting on June 1, 2009, the MSNBC morning news program Morning Joe has been presented as "brewed by Starbucks" and the show's logo changed to include the company logo. Although the hosts have previously consumed Starbucks coffee on air "for free" in the words of MSNBC president Phil Griffin, it was not paid placement at that time.^[175] The move was met with mixed reactions from rival news organizations, viewed as both a clever partnership in an economic downturn and a compromise of journalistic standards.^[176]

Cup sizes

Name	Measurement	Notes
Demi	3 US fluid ounces (89 mL)	Smallest size. Espresso shots.
Short	8 US fluid ounces (240 mL)	Smaller of the two original sizes
Tall	12 US fl oz (350 mL)	Larger of the two original sizes
Grande	16 US fl oz (470 mL)	Italian/Spanish/Portuguese/French for "large"
Venti	20 US fl oz (590 mL), 26 US fl oz (770 mL)	Italian for "twenty"
Trenta	31 US fl oz (920 mL)	Italian for "thirty"

See also

	Seattle portal
	Companies portal
	Food portal

• Coffee culture
• List of coffee companies
• List of coffeehouse chains
• List of companies based in Seattle
• Multinational corporation

References

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Further reading

• Behar, Howard with Janet Goldstein. (2007). It's Not About The Coffee: Leadership Principles from a Life at Starbucks, 208 pages. ISBN 1-59184-192-5.
• Clark, Taylor. (2007). Starbucked: A Double Tall Tale of Caffeine, Commerce and Culture. 336 pages. ISBN 0-316-01348-X.
• Michelli, Joseph A. (2006). The Starbucks experience: 5 principles for turning ordinary into extraordinary, 208 pages. ISBN 0-07-147784-5.
• Pendergrast, Mark (2001) [1999]. Uncommon Grounds: The History of Coffee and How It Transformed Our World. London: Texere. ISBN 1-58799-088-1. 
• Schultz, Howard. and Dori Jones Yang. (1997). Pour Your Heart Into It: How Starbucks Built A Company One Cup At A Time, 350 pages. ISBN 0-7868-6315-3.
• Simon, Bryant. (2009). Everything but the Coffee: Learning about America from Starbucks. 320 pages. ISBN 0-520-26106-2.

External links

• Official website