What changed in this filing

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Item 1. Business

2021-11-19 compared with 2020-11-12 · 222 added, 181 removed, 114 unchanged (78% of the section changed)

In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended October 3, 2021 (“fiscal 2021”), Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in 84 markets.

Formed in 1985, Starbucks Corporation’s common stock trades on the Nasdaq Global Select Market (“Nasdaq”) under the symbol “SBUX.” We purchase and roast high-quality coffees that we sell, along with handcrafted coffee, tea and other beverages and a variety of high-quality food items through company-operated stores.

We also sell a variety of coffee and tea products and license our trademarks through other channels such as licensed stores, as well as grocery and foodservice through our Global Coffee Alliance with Nestlé S.

We also sell a variety of coffee and tea products and license our trademarks through other channels, such as licensed stores as well as grocery and foodservice through our Global Coffee Alliance with Nestlé S.A.

In addition to our flagship Starbucks Coffee brand, we sell goods and services under the following brands:

Teavana, Seattle’s Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve and Princi.

Our objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world.

To achieve this, we are continuing the disciplined expansion of our global store base, adding stores in both existing, developed markets such as the U.S.

Our primary objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world.

We believe our work to create a company that is profit-, people- and planet-positive, along with our ability to successfully execute strategies that support this work, contribute to our primary objective.

Profit-Positive

Our profit-positive efforts are aligned with our global long-term “Growth at Scale” agenda to deliver consistent revenue and income growth, through focus and discipline.

We believe incremental investments in our brand, principally to support our people- and planet-positive work, will deliver long-term targeted revenue and income growth.

This includes expansion of our global store base, adding stores in both existing, developed markets such as the U.S.

and in newer, higher growth markets such as China, as well as optimizing the mix of company-operated and licensed stores around the world.

In addition, by leveraging the experience gained through our traditional store model, we continue to offer consumers new coffee and other products in a variety of forms, across new categories, diverse channels and alternative store formats.

We also believe our Starbucks Global Social Impact strategy, commitments related to ethically sourcing high-quality coffee, contributing positively to the communities we do business in and being an employer of choice are contributors to our objective.

In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended September 27, 2020 (“fiscal 2020”), Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or “our.”

In addition, by leveraging experiences gained through our stores and elsewhere, we continue to drive beverage, equipment, process and technology innovation.

We strive to regularly offer consumers new, innovative coffee and other products in a variety of forms, across new categories, diverse channels and alternative store formats.

We are committed to further investments in our partners (employees) and our industry-leading digital platform as well as environmental, social and governance issues underscoring our mission and values.

Our disciplined capital allocation methodology, which prioritizes high-return investments as well as share repurchases and competitive dividends, rounds out our “Growth at Scale” agenda and our profit-positive vision.

People-Positive

Our people-positive vision is to cultivate an inclusive environment where everyone belongs.

This includes empowering our partners with opportunities to pursue their aspirations while living our mission and values, acting with empathy and compassion and sharing in our success.

This enables our partners to deliver an elevated Starbucks Experience to our customers every day.

We also strive to develop long-lasting trust and make tangible differences in the communities where we serve by investing in humanity and the well-being of everyone we connect with, advancing initiatives that support diversity, equity and inclusion through education, pay equity, hiring commitments and meaningful community involvement, including donations.

Planet-Positive

Our planet-positive vision is to give back more than we take from the planet.

This includes reducing our environmental impacts, such as expanding reusable packaging, conserving water, shifting to renewable energy and eliminating landfill waste, and committing to the sustainability of high-quality coffee and other raw materials.

Sustainability of our raw materials, especially coffee, is paramount to our business operations.

We are committed to ethically sourcing coffee, tea and cocoa, donating disease-resistant coffee trees to farmers, providing farmers access to low-interest loans and sharing the expertise of our agronomists with all coffee farmers, among other things.

Human Capital Management

As a company, Starbucks mission is not only to deliver outstanding financial results by offering exceptional and unique products and services, but to also create a strong connection with the communities where we operate.

We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose as part of our people-positive vision.

This is largely attributed to our partners who strive every day to create a welcoming and inclusive environment.

Therefore, one of our core strategies is to invest in and support our partners to differentiate our brand, products and services in the competitive specialty coffee market, including the following areas of focus:

Oversight and Management

We recognize the diversity of customers, partners and communities, and believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures.

Working under these principles, our Partner

Resources Organization is tasked with managing employment-related matters, including recruiting and hiring, onboarding and training, compensation planning, performance management and professional development.

Our Board of Directors and Board committees provide oversight on certain human capital matters, including our Inclusion and Diversity programs and initiatives.

As noted in its charter, our Compensation and Management Development Committee is responsible for periodically reviewing Starbucks partner resource programs and initiatives, including healthcare and other benefits, as well as our management development and succession planning practices and strategies.

Our Audit and Compliance Committee works closely with the Risk Management Committee, led by Starbucks cfo and general counsel, to monitor and mitigate current and emerging labor and human capital management risks.

Furthermore, our Nominating and Corporate Governance Committee, in consultation with management, including our chief partner officer and chief inclusion and diversity officer, annually evaluates the effectiveness of our social responsibility policies, goals and programs, which also include partner-related issues.

These reports and recommendations to the Board and its committees are part of the broader framework that guides how Starbucks should attract, retain and develop a skilled workforce that aligns with our values and strategies.

We regularly conduct anonymous surveys to seek feedback from our partners on a variety of topics, including confidence in company leadership, competitiveness of our compensation and benefits package, career growth opportunities and recommendations on how we can remain an employer of choice.

The results are shared with our partners and reviewed by senior leadership, who analyze areas of progress or deterioration and prioritize actions and activities in response to this feedback to drive meaningful improvements in partner engagement.

Our management and cross-functional teams also work closely to evaluate human capital management issues such as partner retention, workplace safety, harassment and bullying, as well as to implement measures to mitigate these risks.

Diversity, Equity and Inclusion

We are committed to creating a welcoming and inclusive environment.

We believe it is our responsibility to advance racial and social equity, and we are committed to furthering that work with intention, transparency and accountability.

In 2021, we published our third Civil Rights Assessment that evaluated our ongoing efforts related to diversity, equity and inclusion and how they support our mission and values.

The report addressed our progress over time and provides recommendations for how we can better advance diversity, equity and inclusion on behalf of our partners, customers and communities.

We continue to welcome our partners, customers, civil rights and community leaders, along with our chief inclusion and diversity officer, to advise us along this journey.

Starbucks has made specific racial equity commitments based on our principles of being intentional, transparent and accountable at all levels:

• Being intentional in cultivating a culture of inclusion, with a focus on partner retention and development.

◦ Launching a mentorship program connecting black, indigenous and people of color (“BIPOC”) partners to senior leaders, beginning with a cohort of leaders, senior vice president and above, as well as BIPOC directors in corporate and retail roles.

◦ Investing in strategic partnerships with professional organizations that focus on the development of BIPOC talent, providing additional development opportunities for our BIPOC partners.

• Being transparent in our approach to Inclusion and Diversity goal setting and progress.

◦ Publicly sharing workforce diversity data.

◦ Setting annual Inclusion and Diversity goals based on retention rates and progress towards achieving BIPOC representation.

Our goal is for at least 30% of all corporate roles and at least 40% of all retail and manufacturing roles to be held by BIPOC partners by 2025.

• Holding ourselves accountable at the highest levels of the organization.

◦ Incorporating metrics focused on building inclusive and diverse teams into our executive compensation programs beginning in fiscal 2021.

◦ Joining the Board Diversity Action Alliance to act alongside other companies similarly committed to increasing racially and ethnically diverse representation on corporate boards of directors.

◦ Publicizing self-identified race/ethnicity of each member of our board of directors.

Total Rewards

We have demonstrated a history of investing in our workforce by offering competitive salaries and wages by continuously assessing the current business environment and labor market.

We have consistently made enhancements in wages in order to attract talent to support our growth strategy and to elevate the customer experience.

To foster a stronger sense of ownership and

align the interests of partners with shareholders, restricted stock units are provided to eligible non-executive partners under our broad-based stock incentive programs.

Furthermore, we offer comprehensive, locally relevant and innovative benefits to all eligible partners.

In the U.S., our largest and most mature market, these include:

• Comprehensive health insurance coverage is offered to partners working an average of 20 hours or more each week.

• 100% upfront tuition coverage is offered through the Starbucks College Achievement Plan for partners to earn a first-time bachelor's degree online at Arizona State University.

• 100% paid parental leave is available to new parents that welcome a child through birth, adoption or foster placement and work an average of 20 hours or more each week.

• A Partner and Family Sick Time program is provided and allows partners to accrue paid sick time based on hours worked and use that time for themselves or family members in need of care.

• Care@Work benefit provides partners with backup care benefits for children and adults at a small cost to partners, as well as free unlimited senior care planning services.

This benefit includes up to 30 days of backup care services through the end of fiscal 2022, in light of the COVID-19 pandemic.

• We view mental health as a fundamental part of our humanity and provide a comprehensive suite of related programs and benefits.

These include a free subscription to Headspace, an online application that enables guided mediation, and 20 free mental health therapy or coaching sessions annually with Lyra.

Outside of the U.S., we have provided other innovative benefits to help address market-specific needs, such as providing interest-free loans to our U.K.

partners to help cover rental deposits, mental health services in Canada, and in China, a monthly housing subsidy for full-time Starbucks baristas and shift supervisors, as well as comprehensive health insurance coverage for parents of partners.

Role-based Support

To help our partners succeed in their roles, we emphasize continuous training and development opportunities.

These include, but are not limited to, safety and security protocols, updates on new products and service offerings and deployment of technologies.

Training provided through our Pour Over sessions, which are a series of inspiring talks with thought leaders to help partners understand how to bring the Starbucks Experience to life, include a wide variety of topics such as achievable goal setting, giving and receiving constructive feedback and effective engagement with customers and communities.

To help further promote an inclusive culture and to better serve our customers, we encourage U.S.-based partners to enroll in the To Be Welcoming courses we created in partnership with Arizona State University to address different forms of bias and discrimination.

To be an employer of choice and maintain the strength of our workforce, we consistently assess the current business environment and labor market to refine our compensation and benefits programs and other resources available to our partners.

We previously achieved and currently maintain 100 percent pay equity in the U.S.

for women and men and people of all races for partners performing similar work.

We have also achieved gender pay equity in China and Canada, two of our largest markets outside of the U.S., and we made a commitment to achieve gender pay equity in all company-operated markets.

Further, we have formulated pay-equity principles which provide equal footing, transparency and accountability as best practices that help address known, systemic barriers to global pay equity.

As of October 3, 2021, Starbucks employed approximately 383,000 people worldwide.

In the U.S., Starbucks employed approximately 245,000 people, with approximately 235,000 in company-operated stores and the remainder in corporate support, store development, roasting, manufacturing, warehousing and distribution operations.

Approximately 138,000 employees were employed outside of the U.S., with approximately 135,000 in company-operated stores and the remainder in regional support operations.

The number of Starbucks partners represented by unions is not significant.

We believe our efforts in managing our workforce have been effective, evidenced by a strong Starbucks culture and a good relationship between the company and our partners.

Information about our Executive Officers

Name Age Position

Johnson 61 president and chief executive officer

John Culver 61 group president, North America, and chief operating officer

Michael Conway 55 group president, International and Channel Development

Gonzalez 52 executive vice president and general counsel

Rachel Ruggeri 52 executive vice president, chief financial officer

Angela Lis 54 executive vice president, chief partner officer

Gina Woods 48 executive vice president, Public Affairs and Social Impact

Johnson has served as president and chief executive officer since April 2017 and has been a Starbucks director since March 2009.

Johnson served as president and chief operating officer from March 2015 to April 2017.

Johnson served as Chief Executive Officer of Juniper Networks, Inc., a leading provider of high-performance networking products and services, from September 2008 to December 2013.

He also served on the Board of Directors of Juniper Networks from September 2008 to February 2014.

Prior to joining Juniper Networks, Mr.

Johnson served as President, Platforms and Services Division for Microsoft Corporation, a worldwide provider of software, services and solutions.

Johnson was a member of Microsoft’s Senior Leadership Team and held several senior executive positions over the course of his 16 years at Microsoft.

Prior to joining Microsoft in 1992, Mr.

Johnson worked in International Business Machine Corp.’s systems integration and consulting business.

John Culver joined Starbucks in August 2002 and has served as group president, North America and chief operating officer since July 2021.

From July 2018 to July 2021, Mr.

Culver served as group president, International, Channel Development and Global Coffee & Tea.

From October 2017 to July 2018, Mr.

Culver served as group president, International and Channels.

From September 2016 to October 2017, he served as group president, Starbucks Global Retail.

From May 2013 to September 2016, he served as group president, China, Asia Pacific, Channel Development and Emerging Brands.

Culver served as president, Starbucks Coffee China and Asia Pacific from October 2011 to May 2013.

From December 2009 to October 2011, he served as president, Starbucks Coffee International.

Culver served as executive vice president;

president, Global Consumer Products, Foodservice and Seattle’s Best Coffee from February 2009 to September 2009, and then as president, Global Consumer Products and Foodservice from October 2009 to November 2009.

He previously served as senior vice president;

president, Starbucks Coffee Asia Pacific from January 2007 to February 2009, and vice president;

general manager, Foodservice from August 2002 to January 2007.

Culver serves on the Board of Directors of Kimberly-Clark Corporation and Columbia Sportswear Company.

Michael Conway joined Starbucks in March 2013 and was named group president, International and Channel Development in June 2021, where he is responsible for leading Starbucks retail growth and operations in over 80 markets across Asia Pacific, Europe, Middle East and Africa, Latin America and the Caribbean and growth for the Global Channel Development business, which consists of consumer packaged goods, ready-to-drink businesses and strategic partnerships, including those with Nestlé, PepsiCo and other key business partners.

Prior to this, he served as executive vice president and president, International Licensed Markets, from March 2020 to June 2021.

He also served as executive vice president and president, Starbucks Canada, executive vice president and president for Starbucks Licensed Stores business for the United States and Latin America and executive vice president and president of Starbucks Global Channel Development from December 2014 to March 2020.

He currently serves on the Board of Directors of McCormick & Company, Incorporated.

Gonzalez has served as executive vice president, general counsel, law and corporate affairs since joining Starbucks in April 2018.

From April 2018 to March 2021, she also served as secretary.

Prior to joining Starbucks, Ms.

Gonzalez served as executive vice president and chief administrative officer of Sabre Corporation, a technology provider to the travel industry, from May 2017 to April 2018 and as Sabre’s executive vice president and general counsel from September 2014 to May 2017.

From March 2013 to September 2014, Ms.

Gonzalez served as executive vice president, general counsel and corporate secretary of Dean Foods Company, a food and beverage company, and as its executive vice president, general counsel designate from November 2012 to March 2013.

She served as chief counsel, corporate and securities of Dean Foods from 2008 to 2012.

From 2006 to 2008, Ms.

Gonzalez served as senior vice president and group counsel for Affiliated Computer Services, Inc., an information technology service provider.

Prior to that, Ms.

Gonzalez was a partner with the law firm of Morgan, Lewis & Bockius LLP, where she focused on corporate finance, mergers and acquisitions, Securities and Exchange Commission (“SEC”) compliance and corporate governance.

Gonzalez currently serves on the Board of Directors of Dana Incorporated.

Rachel Ruggeri joined Starbucks in 2001 as a member of the accounting team and was named executive vice president and chief financial officer in February 2021.

In this leadership role, Rachel is responsible for the global finance function for Starbucks, which includes developing and executing the financial strategies that enable the long-term growth of the Company.

Prior to her promotion in 2021, she served as senior vice president of Americas with responsibility for the retail portfolio across the segment, including company-operated and licensed stores from June 2020 to January 2021.

From September 2016 to June 2020, she held various leadership roles in finance both internal and external to Starbucks, including Chief Financial Officer of Continental Mills from July 2018 to May 2020 and prior to that she was senior vice president of Finance at Starbucks in support of the Americas and Global Retail from September 2016 to June 2018.

She was also a vice president of Finance from December 2010 to September 2016 supporting Corporate Financial Planning & Analysis and the U.S.

Retail business.

Angela Lis joined Starbucks in 1992 as a part-time barista and has served as executive vice president, chief partner officer since November 2020.

From September 2016 to October 2020, Ms.

Lis served as senior vice president, partner resources.

In this role she was responsible for talent and partner strategies that drive our global retail operations business.

Prior to this role, she served as a vice president of partner resources for corporate business functions and global supply chain from December 2012 to September 2016.

During her tenure at Starbucks, Ms.

Lis has led partner resources business partners across the globe.

She has supported both retail and all non-retail business units and was instrumental in the startup of our Channel Development business.

Gina Woods joined Starbucks in 2005 and was named executive vice president of Public Affairs and Social Impact in January 2021.

In this role, she leads global communications, partner (employee) communications and events, government affairs and public policy, community impact, people-positive, integrated reputation communications, storytelling and content creation, Seattle’s hometown strategy and entertainment partnerships.

From July 2018 to January 2021, she served as senior vice president, Reputation Marketing for Public Affairs, and she previously served as vice president, Entertainment & Executive Communications from September 2013 to July 2018.

Segment Financial Information

Segment information is prepared on the same basis that our management reviews financial information for operational decision-making purposes.

In the fourth quarter of fiscal 2021, certain changes were made to our management team, and our operating segment reporting structure was re-aligned as a result.

Specifically, we realigned our fully licensed Latin America and Caribbean markets from our Americas operating segment to our International operating segment.

Additionally, we renamed the Americas operating segment to the North America operating segment, comprised of our company-operated and licensed stores in the U.S.

and Canada.We also made certain other immaterial changes between our International operating segment and Corporate and Other.

We have three reportable operating segments:

1) Americas, which is inclusive of the U.S., Canada and Latin America;

2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East and Africa;

1) North America, which is inclusive of the U.S.

2) International, which is inclusive of China, Japan, Asia Pacific, Europe, Middle East, Africa, Latin America and Caribbean;

and 3) Channel Development.

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Revenues from our reportable operating segments as a percentage of total net revenues for fiscal 2021 were as follows:

Americas (70%), International (22%) and Channel Development (8%).

Our Americas and International segments include both company-operated and licensed stores.

Our Americas segment is our most mature business and has achieved significant scale.

Certain markets within our International operations are in various stages of development and may require more extensive support, relative to their current levels of revenue and operating income, than our Americas operations.

Our Channel Development segment includes roasted whole bean and ground coffees, Seattle's Best Coffee ® , Starbucks- and Teavana-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino ® , Starbucks Doubleshot ® , Starbucks Refreshers ® beverages and Teavana TM/MC iced tea, and other branded products sold worldwide outside of our company-operated and licensed stores.

A large portion of our Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestlé, while our global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Anheuser-Busch Companies, LLC, Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba and others.

North America (70%), International (24%) and Channel Development (6%).

Our North America and International segments include both company-operated and licensed stores.

Our North America segment is our most mature business and has achieved significant scale.

Our Channel Development segment includes roasted whole bean and ground coffees, Seattle’s Best Coffee ® , Starbucks- and Teavana-branded single-serve products, a variety of ready-to-drink beverages, such as Frappuccino ® and Starbucks Doubleshot ® , foodservice products and other branded products sold worldwide outside of our company-operated and licensed stores.

A large portion of our Channel Development business operates under a licensed model of the Global Coffee Alliance with Nestlé, while our global ready-to-drink businesses operate under collaborative relationships with PepsiCo, Inc., Tingyi-Ashi Beverages Holding Co., Ltd., Arla Foods amba and others.

Revenue Components

We generate the majority of our revenues through company-operated stores and licensed stores.

Company-operated and Licensed Store Summary as of September 27, 2020

Americas As a% of

Americas Stores

International As a% of

Company-operated and Licensed Store Summary as of October 3, 2021

North America As a% of

North America Stores International As a% of

International Stores Total As a% of

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Total 16,826 100 % 17,007 100 % 33,833 100 %

The mix of company-operated versus licensed stores in a given market will vary based on several factors, including our ability to access desirable local retail space, the complexity, profitability and expected ultimate size of the market for Starbucks and our ability to leverage the support infrastructure within a geographic region.

The mix of company-operated versus licensed stores in a given market generally varies based on several factors, including our ability to access desirable local retail space, the complexity, profitability and expected ultimate size of the market for Starbucks and our ability to leverage the support infrastructure within a geographic region.

Company-operated Stores

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Store growth in specific existing markets will vary due to many factors, including expected financial returns, the maturity of the market, economic conditions, consumer behavior and local business practices.

Company-operated store data for the year-ended September 27, 2020:

Sep 29, 2019 Opened Closed Transfers Net Sep 27, 2020

Company-operated store data for the fiscal year-ended October 3, 2021:

Sep 27, 2020 Opened Closed Transfers Net Oct 3, 2021

North America:

8,941 449 (424) (19) 6 8,947

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Siren Retail 9 1 (4) — (3) 6

Total Americas 9,974 392 (257) — 135 10,109

Total North America 10,109 480 (705) (23) (248) 9,861

International:

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We are continuing the expansion of our stores, particularly drive-thru formats that provide a higher degree of access and convenience, and alternative store formats, which are designed to provide a more streamlined customer experience in dense metropolitan areas.

Prior to the novel coronavirus outbreak, known as the global pandemic COVID-19, approximately 80% of Starbucks transactions in U.S.

Prior to the global COVID-19 pandemic, approximately 80% of Starbucks transactions in U.S.

company-operated stores were “on-the-go” occasions.

This has prompted us to reexamine our U.S.

store footprint and evolve our retail presence over time through targeted store renovations, relocations and new stores.

We have since introduced a new store format, Starbucks ® Pickup, to enhance the “on-the-go” customer experience and improve operating efficiency across Starbucks ® stores in certain major metropolitan areas in the Americas.

New store formats, such as Starbucks Pickup, are suitable for customers who prefer to order ahead and pay through the Starbucks ® Mobile App for pick-up.

store footprint and evolve our retail presence over time

through targeted store renovations, relocations and new stores.

We have since introduced new store formats, such as Starbucks ® Pickup, Starbucks Now stores and curbside pickup, to enhance the “on-the-go” customer experience and improve operating efficiency across Starbucks ® stores in certain major metropolitan areas in the United States.

New store formats are suitable for customers who prefer to order ahead and pay through the Starbucks ® Mobile App for pick-up.

In our major international markets, we continue to invest in technology and establish partnerships with third parties with relevant expertise to increase digital adoption to provide convenience and elevate the customer experience.

In China, the introduction of Starbucks Now TM stores enables a seamless integration of physical and digital customer touchpoints.

Orders may be placed in advance through the Starbucks Mobile App or Starbucks Delivers TM and can be conveniently picked up by customers and delivery riders in these express retail format locations.

In China, the introduction of Starbucks Now TM stores is intended to enable a seamless integration of physical and digital customer touchpoints.

Orders may be placed in advance through the Starbucks Mobile App or Starbucks Delivers TM and can be conveniently picked up by customers and delivery providers in these express retail format locations.

These strategies align closely with rapidly evolving customer preferences, including higher levels of mobile ordering, more contactless pick-up experiences and reduced in-store congestion, all of which naturally allow for greater physical distancing.

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Retail sales mix by product type for company-operated stores:

Fiscal Year Ended Sep 27,

Fiscal Year Ended Oct 3,

Beverages 74 % 75 % 74 %

Food 21 % 20 % 20 %

Packaged and single-serve coffees and teas 1 % 1 % 2 %

Total 100 % 100 % 100 %

(1) “Other” primarily consists of sales of serveware and ready-to-drink beverages, among other items.

(1) “Other” primarily consists of sales of packaged and single-serve coffees and teas, serveware and ready-to-drink beverages, among other items.

Stored Value Cards and Loyalty Program

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Customers may access their card balances by utilizing their stored value card or the Starbucks ® Mobile App in participating stores.

Using the Mobile Order and Pay functionality of the Starbucks ® Mobile App, customers can also place orders in advance for pick-up at certain participating locations in several markets.

In nearly all markets, including the U.S.

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Registered members can receive various benefits depending on factors such as the number of reward points (“Stars”) earned.

Beginning in the fourth quarter of fiscal 2020, in addition to using their Starbucks Cards, Starbucks ® Rewards members can earn Stars by paying with cash, credit or debit cards, or selected mobile wallets at company-operated stores in the U.S.

Refer to Note 1 , Summary of Significant Accounting Policies, included in Item 8 of Part II of this 10-K, for further discussion of our stored value cards and loyalty program.

In addition to using their Starbucks Cards, Starbucks ® Rewards members can earn Stars by paying with cash, credit or debit cards, or selected mobile wallets at company-operated stores in the U.S.

Using the Mobile Order and Pay functionality of the Starbucks ® Mobile App, customers can also place orders in advance for pick-up at certain participating locations in several markets.

Refer to Note 1 , Summary of Significant Accounting Policies and Estimates, included in Item 8 of Part II of this 10-K, for further discussion of our stored value cards and loyalty program.

Licensed Stores

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Licensees are responsible for operating costs and capital investments, which more than offset the lower revenues we receive under the licensed store model.

In our licensed store operations, we leverage the expertise of our local partners and share our operating and store development experience.

In our licensed store operations, we seek to leverage the expertise of our local partners and share our operating and store development experience.

Licensees provide improved, and at times the only, access to desirable retail space.

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We also sell certain equipment, such as coffee brewers and espresso machines, to our licensees for use in their operations.

Employees working in licensed retail locations are required to follow our detailed store operating procedures and attend training classes similar to those given to employees in company-operated stores.

Licensee employees working in licensed retail locations are required to follow our detailed store operating procedures and attend training classes similar to those given to employees in company-operated stores.

In a limited number of international markets, we also use traditional franchising and include these stores in the results of operations from our other licensed stores.

Licensed store data for the year-ended September 27, 2020:

Sep 29, 2019 Opened Closed Transfers Net Sep 27, 2020

Licensed store data for the fiscal year-ended October 3, 2021:

Sep 27, 2020 Opened Closed Transfers Net Oct 3, 2021

North America:

6,387 191 (100) 19 110 6,497

Mexico 748 15 (11) — 4 752

Latin America 663 32 (33) — (1) 662

Canada 444 48 (28) 4 24 468

Total Americas 8,093 281 (129) — 152 8,245

Total North America (1)

6,831 239 (128) 23 134 6,965

International:

Korea 1,468 166 (23) — 143 1,611

Mexico 752 7 (13) — (6) 746

737 68 (14) — 54 791

Latin America 662 35 (6) — 29 691

Turkey 530 36 (7) — 29 559

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Indonesia 458 29 — — 29 487

Philippines 397 10 (11) — (1) 396

Thailand 405 26 (6) — 20 425

Philippines 396 5 — — 5 401

All Other 3,283 313 (97) 2 218 3,501

Total International (1)

9,192 713 (172) 2 543 9,735

Total licensed 16,023 952 (300) 25 677 16,700

(1) North America and International licensed stores as of September 27, 2020, have been recast as a result of our fiscal 2021 operating segment reporting structure realignment.

Other Revenues

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Starbucks is committed to selling the finest whole bean coffees and coffee beverages.

To ensure compliance with our rigorous coffee standards, we control substantially all coffee purchasing, roasting and packaging and the global distribution of coffee used in our operations.

To help ensure compliance with our rigorous coffee standards, we generally control substantially all coffee purchasing, roasting and packaging and the global distribution of coffee used in our operations.

Nestlé controls distribution of certain finished goods through the Global Coffee Alliance.

We purchase green coffee beans from multiple coffee-producing regions around the world and custom roast them to our exacting standards for our many blends and single origin coffees.

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Both the premium and the commodity price depend upon the supply and demand at the time of purchase.

Supply and price can be affected by multiple factors in the producing countries, including weather, natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels and political and economic conditions.

Supply and price can be affected by multiple factors in the producing countries, including weather, water supply quality and availability throughout the coffee production chain, natural disasters, crop disease and pests, general increase in farm inputs and costs of production, inventory levels and political and economic conditions.

Climate change may further exacerbate many of these factors.

Price is also impacted by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds.

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We believe, based on relationships established with our suppliers, the risk of non-delivery on such purchase commitments is remote.

To help ensure the future supply of high-quality green coffee and to reinforce our leadership role in the coffee industry, Starbucks operates nine farmer support centers, including our China Farmer Support Center located in the Yunnan Province of

this high-growth market.

All farmer support centers are staffed with agronomists and sustainability experts who work with coffee farming communities to promote best practices in coffee production designed to improve both coffee quality and yields and agronomy support to address climate and other impacts.

In addition to coffee, we also purchase significant amounts of dairy products, particularly fluid milk, to support the needs of our company-operated stores.

We believe, based on relationships established with our dairy suppliers, that the risk of non-delivery of sufficient fluid milk to support our stores is remote.

To help ensure the future supply of high-quality green coffee and to reinforce our leadership role in the coffee industry, Starbucks operates ten farmer support centers, including our China Farmer Support Center located in the Yunnan Province of this high-growth market.

Farmer support centers are staffed with agronomists and sustainability experts who work with coffee farming communities to promote best practices in coffee production designed to improve both coffee quality and yields and agronomy support to address climate change and other impacts.

In addition to coffee, we also purchase significant amounts of dairy and plant-based dairy-free alternative products, particularly fluid milk, oat milk and almond milk, to support the needs of our company-operated stores.

We believe, based on relationships established with our dairy and plant-based dairy-free suppliers, that the risk of non-delivery of sufficient fluid milk and plant-based dairy-free alternatives to support our stores generally is remote.

Products other than whole bean coffees and coffee beverages sold in Starbucks ® stores include tea and a number of ready-to-drink beverages that are purchased from several specialty suppliers, usually under long-term supply contracts.

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We also purchase a broad range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of our retail stores as well as our manufacturing and distribution operations.

We believe, based on relationships established with these suppliers and manufacturers, that the risk of non-delivery of sufficient amounts of these items is remote.

Our primary competitors for coffee beverage sales are specialty coffee shops.

We believe that our customers choose among specialty coffee retailers primarily on the basis of product quality, service and convenience, as well as price.

Consistent with our planet-positive vision, we are also expanding our use of reusable packaging to reduce landfill waste.

We believe, based on relationships established with these suppliers and manufacturers, that the risk of non-delivery of sufficient amounts of these items generally is remote.

During fiscal 2021, we began to experience certain supply shortages and transportation delays largely attributable to impacts of the COVID-19 pandemic as well as changes in customer demand and behaviors.

While we expect these shortages and delays may continue into fiscal 2022, we view them to be temporary and do not believe they will have a material impact to our long-term growth and profitability.

Our primary competitors for coffee beverage sales are specialty coffee retailers and shops.

We believe that our customers choose among specialty coffee retailers and shops primarily on the basis of product quality, brand reputation, service and convenience, as well as price.

We continue to experience direct competition from large competitors in the quick-service restaurant sector and the ready-to-drink coffee beverage market, in addition to both well-established and start-up companies in many international markets.

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We own numerous copyrights for items such as product packaging, promotional materials, in-store graphics and training materials.

We also hold patents on certain products, systems and designs.

We also hold patents on certain products, systems and designs which have an average remaining useful life of approximately two years.

In addition, Starbucks has registered and maintains numerous Internet domain names, including “Starbucks.com,” “Starbucks.net,” “Starbucksreserve.com,” “Seattlesbest.com” and “Teavana.com.”

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Our business is subject to moderate seasonal fluctuations, of which our fiscal second quarter typically experiences lower revenues and operating income.

However, the COVID-19 outbreak may have an impact on consumer behaviors and customer traffic that may result in temporary changes in the seasonal fluctuations of our business.

The COVID-19 pandemic has had an impact on consumer behaviors and customer traffic;

however, it is not yet certain that these changes will sustain and cause other than temporary changes in the seasonal fluctuations of our business.

Additionally, as Starbucks Cards are issued to and loaded by customers during the holiday season, we tend to have higher cash flows from operations during the first quarter of the fiscal year.

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Government Regulation

As a company with global operations, we are subject to the laws of the United States and multiple foreign jurisdictions in which we operate and the rules and regulations of various governing bodies, which may differ among jurisdictions.

Compliance with these laws, rules and regulation has not had, and is not expected to have, a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods.

Human Capital Management

We believe the strength of our workforce is one of the significant contributors to our success as a global brand that leads with purpose.

This is largely attributed to our partners (employees) who strive every day to create a welcoming and inclusive environment for our customers.

Oversight and Management

We recognize the diversity of customers, partners and communities, and believe in creating an inclusive and equitable environment that represents a broad spectrum of backgrounds and cultures.

Working under these principles, our Partner Resources Organization is tasked with managing employment-related matters, including recruiting and hiring, onboarding and training, compensation planning, performance management and professional development.

Our Board of Directors and Board committees provide oversight on certain human capital matters, including our Inclusion and Diversity programs and initiatives.

Our Audit and Compliance Committee works closely with the Risk Management Committee, led by Starbucks cfo and general counsel, to monitor current and emerging labor and human capital management risks and to mitigate exposure to those risks.

Furthermore, our Nominating and Corporate Governance Committee annually evaluates the effectiveness of our social responsibility policies, goals and programs, which also include partner-related issues.

These reports and recommendations to the Board and its committees are part of the broader framework that guides how Starbucks should attract, retain and develop a workforce that aligns with our values and strategies.

We regularly conduct anonymous surveys to seek feedback from our retail and non-retail partners on a variety of topics, including but not limited to, confidence in company leadership, competitiveness of our compensation and benefits package, career growth opportunities and improvements on how we could make our company an employer of choice.

Total Rewards

We have demonstrated a history of investing in our workforce by offering competitive salaries and wages.

To foster a stronger sense of ownership and align the interests of partners with shareholders, restricted stock units are provided to eligible non-executive partners under our broad-based stock incentive programs.

Furthermore, we offer comprehensive, locally relevant and innovative benefits to all eligible partners.

In the U.S , our largest and most mature market, these include, among other benefits:

• Comprehensive health insurance coverage is offered to partners working an average of 20 hours or more each week.

• 100% tuition coverage is provided to partners who earn a bachelor's degree online at Arizona State University through the Starbucks College Achievement Program.

• Parental leaves are provided to all new parents for birth, adoption or foster placement.

• A Partner and Family Sick Time program is provided and allows partners to accrue paid sick time based on hours worked and use that time for themselves or family members in need of care.

• Care@Work benefit provides partners with subsidized child, adult or senior care planning services.

This benefit includes up to 20 days of subsidized backup care services through the end of fiscal 2021, in light of the COVID-19 pandemic.

• We view mental health as a fundamental part of our humanity and implemented a comprehensive suite of related programs and benefits in fiscal 2020.

These include Headspace, an online application that enables guided mediation, Lyra, which provides mental health coaching, and Starbucks Mental Health Fundamental Training, created in partnership with National Council for Behavioral Health, which offers ongoing training to help partners recognize and respond to signs of mental health and substance use issues.

Outside of the U.S., we have provided other innovative benefits to help address market-specific needs, such as providing interest-free loans to our U.K.

partners to help cover rental deposits, mental health services in Canada, and in China, a monthly housing subsidy for full-time Starbucks baristas and shift supervisor s , as well as comprehensive health insurance coverage for parents of partners.

Role-based Support

To help our partners succeed in their roles, we emphasize continuous training and development opportunities.

These include, but are not limited to, safety and security protocols, updates on new products and service offerings and deployment of technologies.

Training provided through our Pour Over sessions include a wide variety of topics such as achievable goal setting, giving and receiving constructive feedback and effective engagement with customers and communities.

We previously achieved and currently maintain 100 percent pay equity in the U.S.

for women and men and people of all races for partners performing similar work.

We have also achieved gender pay equity in China and Canada, two of our largest markets outside of the U.S., and we made a commitment to achieve gender pay equity in all company-operated markets.

As of September 27, 2020, Starbucks employed approximately 349,000 people worldwide.

In the U.S., Starbucks employed approximately 228,000 people, with approximately 220,000 in company-operated stores and the remainder in corporate support, store development, roasting, manufacturing, warehousing and distribution operations.

Approximately 121,000 employees were employed outside of the U.S., with approximately 118,000 in company-operated stores and the remainder in regional support operations.

The number of Starbucks partners represented by unions is not significant.

We believe our efforts in managing our workforce have been effective, evidenced by a strong Starbucks culture and a good relationship between the company and our partners.

Information about our Executive Officers

Name Age Position

Johnson 60 president and chief executive officer

Brewer 58 group president, Americas and chief operating officer

John Culver 60 group president, International, Channel Development and Global Coffee & Tea

Gonzalez 51 executive vice president, general counsel and secretary

Grismer 58 executive vice president, chief financial officer

Angela Lis 53 executive vice president, chief partner officer

Johnson has served as president and chief executive officer since April 2017, and has been a Starbucks director since March 2009.

Johnson served as president and chief operating officer from March 2015 to April 2017.

Johnson served as Chief Executive Officer of Juniper Networks, Inc., a leading provider of high-performance networking products and services, from September 2008 to December 2013.

He also served on the Board of Directors of Juniper Networks from September 2008 through February 2014.

Prior to joining Juniper Networks, Mr.

Johnson served as President, Platforms and Services Division for Microsoft Corporation, a worldwide provider of software, services and solutions.

Johnson was a member of Microsoft’s Senior Leadership Team and held several senior executive positions over the course of his 16 years at Microsoft.

Prior to joining Microsoft in 1992, Mr.

Johnson worked in International Business Machine Corp.’s systems integration and consulting business.

Brewer has served as group president, Americas and chief operating officer since October 2017, and has been a director of Starbucks since March 2017.

Brewer served as President and Chief Executive Officer of Sam's Club, a membership-only retail warehouse club and a division of Walmart Inc., a multinational retail corporation, from February 2012 to February 2017.

Previously, Ms.

Brewer was Executive Vice President and President of Walmart's East Business Unit from February 2011 to January 2012;

Executive Vice President and President of Walmart South from February 2010 to February 2011;

Senior Vice President and Division President of the Southeast Operating Division from March 2007 to January 2010;

and Regional General Manager, Georgia Operations, from 2006 to February 2007.

Prior to joining Walmart, Ms.

Brewer was President of Global Nonwovens Division for Kimberly-Clark Corporation, a global health and hygiene products company, from 2004 to 2006 and held various management positions at Kimberly-Clark Corporation from 1984 to 2006.

She currently serves as the Chair of the Board of Trustees for Spelman College and as a director on the Board of Directors of Amazon.com, Inc.

She formerly served on the Board of Directors for Lockheed Martin Corporation and Molson Coors Brewing Company.

John Culver joined Starbucks in August 2002 and has served as group president, International, Channel Development and Global Coffee & Tea, since July 2018.

From October 2017 to July 2018, Mr.

Culver served as group president, International and Channels.

From September 2016 to October 2017, he served as group president, Starbucks Global Retail.

From May 2013

to September 2016, he served as group president, China, Asia Pacific, Channel Development and Emerging Brands.

Culver served as president, Starbucks Coffee China and Asia Pacific from October 2011 to May 2013.

From December 2009 to October 2011, he served as president, Starbucks Coffee International.

Culver served as executive vice president;

He previously served as senior vice president;

president, Starbucks Coffee Asia Pacific from January 2007 to February 2009, and vice president;

general manager, Foodservice from August 2002 to January 2007.

Culver serves on the Board of Directors of Kimberly-Clark Corporation.

Gonzalez joined Starbucks and has served as executive vice president, general counsel and secretary since joining Starbucks in April 2018.

Prior to joining Starbucks, Ms.

From March 2013 to September 2014, Ms.

She served as chief counsel, corporate and securities of Dean Foods from 2008 to November 2012.

From 2006 to 2008, Ms.

Gonzalez served as senior vice president and group counsel for Affiliated Computer Services, Inc., an information technology service provider.

Prior to that, Ms.

Gonzalez was a partner with the law firm of Morgan, Lewis & Bockius LLP, where she focused on corporate finance, mergers and acquisitions, SEC compliance and corporate governance.

Gonzalez serves on the Board of Directors of Dana Incorporated.

Grismer joined Starbucks in November 2018 as executive vice president, chief financial officer.

From March 2016 to November 2018, Mr.

Grismer served as Executive Vice President, Chief Financial Officer of Hyatt Hotels Corporation, a global hospitality company.

From May 2012 to February 2016, Mr.

Grismer served as Chief Financial Officer at Yum!

Brands, Inc., a global restaurant company.

He previously held a number of roles at Yum!, including Chief Planning and Control Officer and Chief Financial Officer for Yum!

Restaurants International.

Prior to that, Mr.

Grismer served in various roles at The Walt Disney Company including Vice President, Business Planning and Development for The Disneyland Resort and Chief Financial Officer for the Disney Vacation Club.

Grismer began his career with Price Waterhouse.

Angela Lis joined Starbucks in 1992 as a part-time barista and has served as executive vice president, chief partner officer since November 2, 2020.

From September 2016 to October 2020, Ms.

Lis served as senior vice president, global business partners.

In this role she was responsible for talent and partner strategies that drive our global retail operations business.

Prior to this role, she served as a vice president of partner resources for corporate business functions and global supply chain.

During her tenure at Starbucks, Ms.

Lis has led partner resources business partners across the globe.

She has supported both retail and all non-retail business units and was instrumental in the startup of our Channel Development business.

Global Social Impact

We are committed to being a deeply responsible company in the communities where we do business.

Our focus is on ethically sourcing high-quality coffee and tea, reducing our environmental impacts and contributing positively to communities around the world.

Starbucks Global Social Impact strategy and commitments are integral to our overall business strategy.

As a result, we believe we deliver benefits to our stakeholders, including employees, business partners, customers, suppliers, shareholders, community members and others.

For an overview of Starbucks Global Social Impact strategy and commitments, please visit www.starbucks.com/responsibility.

As a company with global operations, we are subject to the laws and regulations of the United States and the multiple foreign jurisdictions in which we operate as well as the rules, reporting obligations and interpretations of all such requirements and obligations by various governing bodies, which may differ among jurisdictions.

In addition, changes to such laws, regulations, rules, reporting obligations and related compliance obligations could result in significant costs but are not expected to have a material effect on our capital expenditures, results of operations and competitive position as compared to prior periods.

Available Information

Starbucks 10-K reports, along with all other reports and amendments filed with or furnished to the Securities and Exchange Commission (“SEC”), are publicly available free of charge on the Investor Relations section of our website at investor.starbucks.com or at www.sec.gov as soon as reasonably practicable after these materials are filed with or furnished to the SEC.

Starbucks Annual Report on Form 10-K reports, along with all other reports and amendments filed with or furnished to the SEC, are publicly available free of charge on the Investor Relations section of our website at investor.starbucks.com or at www.sec.gov as soon as reasonably practicable after these materials are filed with or furnished to the SEC.

We also use our website as a tool to disclose important information about the company and comply with our disclosure obligations under Regulation Fair Disclosure.

Our corporate governance policies, code of ethics and Board committee charters and policies are also posted on the Investor Relations section of Starbucks website.

The information on our website is not part of this or any other report Starbucks files with, or furnishes to, the SEC.

The information on our website (or any webpages referenced in this Annual Report on Form 10-K) is not part of this or any other report Starbucks files with, or furnishes to, the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business