Starbucks Annual Meeting of Shareholders Starts over a Cup of Coffee; Company's Impact Now Extends Well Beyond Stores' Four Walls

Starbucks Corporation's (NASDAQ:SBUX) 14th Annual Meeting ofShareholders kicked off today with Howard Schultz, Starbucks chairman,discussing the positive impression that Starbucks has around theworld. A new phrase, the "Starbucks Effect," is entering the lexiconas Starbucks impact on its partners (employees), customers andcommunities is felt around the world.

The term "Starbucks Effect" began with coffee farmers in LatinAmerica referring to their experience of selling coffee to Starbucks.By supplying high quality coffee to Starbucks, coffee farmers receivepremium prices and earn a profit, enabling them to reinvest into theirfarms. After Hurricane Stan this past fall, one coffee farmer wrote toStarbucks saying that because of Starbucks emphasis on sustainableagriculture practices, his farm remained relatively undamaged. This isjust one of many examples of the Starbucks Effect in coffee growingregions.

Additionally, in 2000, the Harvard Business Review explained theStarbucks Effect this way: "When Starbucks made coffee hip, itssuccess set off a chain reaction of innovation that boosted the wholecategory's profits."

"The 'Starbucks Effect' embodies the very essence of the Starbucksculture," Schultz said. "We recognize the relationship between thesuccess of our Company and the strength and vitality of allcommunities in which we operate. And it all begins with a cup ofcoffee."

Partner Connection: "Working at Starbucks is more than a job; mypersonal contribution is valued and rewarded."

Starbucks is known for serving the highest quality coffee and forproviding legendary customer service. But how does a company of itssize continue to meet that promise day in and day out? Starbuckscommitment to its partners is visible through its benefits offerings.All eligible Starbucks partners, with just 20 hours or more per week,have access to comprehensive healthcare (medical, dental and vision)as well as stock options and 401(k) with matching funds.

"Starbucks partners are at the core of our success," Schultz said."Establishing comprehensive, affordable health care as a keyemployment benefit for our full- and part-time retail workforce is oneof the Company's proudest accomplishments. Today, it remains a keycomponent of our business model."

By providing a health benefit, Starbucks is able to reduceturnover, attract higher quality applicants, and ultimately foster amore fulfilled, productive and healthy workforce. As a result ofinvesting in its people, employee satisfaction ratings are consideredbest-of-class. According to the Company's 2004 Partner View Survey,which polled 56,000 out of 88,000 partners and was facilitatedanonymously through a third-party vendor, overall satisfaction was at87 percent (percent satisfied and very satisfied with their job).Overall partner engagement, a measure of how connected partners are totheir team and to Starbucks, was at 73 percent. The high scoresreflect a positive workforce, which translates into legendary customerservice, and ultimately a satisfied customer.

Some Starbucks partners have credited Starbucks benefits,especially the stock options, with allowing them to purchase theirfirst homes or send children to college.

Customer Focus: "I love Starbucks because the people there get myday off to a great start!"

The Starbucks Experience is unique and provides much more than thehighest quality cup of coffee to customers.

"Starbucks has delivered shareholder value by doing thingsdifferently, focusing on the partners and customers, rather than justthe bottom line," Schultz said. "With more than 40 million customersper week worldwide, Starbucks must continually find ways to surpriseand delight customers by offering the highest quality products andservices."

Currently, there are more than 55,000 beverage combinationsavailable at Starbucks. Each customer's order is hand-crafted andcustomized to the customer's exact specifications. For example, onecustomer may want a triple tall nonfat extra hot vanilla latte whileanother may enjoy an iced venti soy chai latte. Starbucks "just sayyes" attitude helps store partners build relationships with theircustomers. It isn't unusual for baristas to recognize regularcustomers and to have those drinks ready and waiting for them.

In California, an unusual phenomenon occurred which demonstratesthat connection between baristas and customers. When a barista made adrive-thru customer's drink incorrectly, she quickly remade the orderand gave it to the customer at no charge. He was so touched by thisgesture that he offered to pay for the drinks for the car behind him.This concept of "passing it on" has been replicated across the countryand is another example of the Starbucks Effect in action.

Community Outreach: "Starbucks makes my community a better place."

Investing in communities is another important part of theStarbucks culture. Starbucks invests in communities through localprogramming, in-kind donations, encouraging partner volunteerism,corporate cash contributions, and through The Starbucks Foundation.

One program, called Make Your Mark, encourages partners, theirfriends, families and customers, to volunteer in their neighborhoods.The Company supports those efforts by providing a cash contribution($10 per hour per volunteer, up to $1,000 per project) from Starbucksto the nonprofit organization where they volunteer.

In fiscal year 2005, partners and customers in the United Statesand Canada volunteered at more than 1,600 Make Your Mark projectswith more than 74,000 volunteers. Together they volunteered nearly300,000 hours and Starbucks donated $1.49 million to local non-profitsin support of the partners and customers time given. Since the programbegan in fiscal year 2000, nearly 800,000 hours have been volunteeredby Starbucks partners and customers.

"We live our mission statement and guiding principles throughactive involvement in our communities -- whether it is a localneighborhood or a coffee growing country where we purchase coffee,"Schultz said. "Starbucks commitment to communities is more than justfinancial. We provide our expertise, volunteer time and product tohelp create lasting relationships."

Making a Difference in Coffee Growing Regions: "Starbucks premiumprices allowed me to build a health clinic on my farm, ensured that Iearned a fair wage, and also helped improve my community."

Starbucks strongly believes in the importance of buildingmutually-beneficial relationships with coffee farmers and coffeecommunities. In fiscal year 2005, Starbucks paid on average $1.28 perpound for green coffee, which is 23 percent more than the commoditymarket's annual average price per pound. Starbucks has developedsocially responsible coffee buying guidelines called C.A.F.E.Practices (Coffee and Farmer Equity Practices) in conjunction with thenonprofit environmental organization Conservation International.

"C.A.F.E. Practices guidelines are designed to help us work withcoffee farmers to ensure high-quality coffee while protecting theenvironment and promoting equitable relationships with farmers,workers and communities," Schultz said.

Purchasing Fair Trade Certified(TM) coffee is a way that Starbuckssupports cooperatives of small-scale farmers and is part of itslarger, integrated approach to coffee corporate social responsibility.Starbucks is the largest purchaser of Fair Trade Certified(TM) coffeein North America and is the only company licensed to sell it in 23countries.

Starbucks has a long history of integrating a social conscienceinto all aspects of its business. On August 3, 2005, Starbucks beganselling Ethos(TM) Water in U.S. Company-operated stores. For eachbottle of Ethos Water purchased, US$0.05 will support Starbucks goalof contributing US$10 million over the next five years (2006-2010) tonon-profit organizations that are helping to alleviate the world watercrisis. Through Ethos Water, Starbucks hopes to inspire and empowerits customers and partners and relevant stakeholders to play apersonal role in helping to provide clean drinking water to childrenand their communities around the world.

As further support of this effort, Starbucks and Ethos Water willhost symbolic "Walk for Water" events on World Water Day, March 22,2006, in 11 major markets throughout the country. The "Walk for Water"events are intended to symbolize the difficult journey that women andchildren in Sub-Saharan Africa must undertake on a daily basis toretrieve water for their families and provide an active opportunityfor customers and partners to acknowledge the issue and participate ina public effort to alleviate the world water crisis.

For more information about the Starbucks Effect, go towww.Starbucks.com to view the fiscal year 2005 Corporate SocialResponsibility report, which is verified through a third-partyorganization. This report provides specific details about Starbucksimpact on partners, customers and communities around the world.

About Starbucks Coffee Company

Starbucks Corporation is the leading retailer, roaster and brandof specialty coffee in the world, with more than 10,500 retaillocations in North America, Latin America, Europe, the Middle East andthe Pacific Rim. The Company is committed to offering the highestquality coffee and the Starbucks Experience while conducting itsbusiness in ways that produce social, environmental and economicbenefits for communities in which it does business. In addition to itsretail operations, the Company produces and sells bottled StarbucksFrappuccino(R) coffee drinks, Starbucks DoubleShot(R) espresso drink,and a line of superpremium ice creams through its joint-venturepartnerships. The Company's brand portfolio provides a wide variety ofconsumer products -- innovative superpremium Tazo(R) teas andexceptional Starbucks Hear Music(TM) compact discs enhance theStarbucks Experience through best-of-class products. The Seattle'sBest Coffee(R) and Torrefazione Italia(R) Coffee brands enableStarbucks to appeal to a broader consumer base by offering analternative variety of coffee flavor profiles.

Meeting b-roll footage will be available for download at IA-6,Transponder 21 (C-Band) Downlink Frequency: 4120 Vertical Audio6.2/6.8 on Wednesday, February 8 from 10 a.m. (PT)/1 p.m. (ET) and 1p.m. (PT)/4 p.m. (ET).