Life in the Espresso Lane
When Michelle Gass ’90 left a marketing position with Procter & Gamble for Starbucks Coffee Company, her career— and the rapidly expanding company—got a rejuvenating jolt.
In the 1990s, Starbucks Coffee Company was rapidly scooping up the coffee market, having grown to a half-billion-dollar business with 700 stores nationwide. But it was still in its formative stages, says Michelle (Petkers) Gass ’90, who joined the company in 1996 as the Frappuccino marketing manager. The blend of rich Starbucks coffee and cold milk grew from what she describes as “a very small part of our business” to a line of 10 flavors in three versions. “Today the Frappuccino is a significant part of our business, with new seasonal flavors introduced every year, such as last summer’s Java Chip.”
Since Gass joined Starbucks, the coffeemaker’s stock price has made an orbital leap of 451 percent—from $8.25 per share on Sept. 30, 1996, to $45.46 per share on Sept. 30, 2004. Today, with more than 7,500 retail locations in North America, Latin America, Europe, the Middle East, and the Pacific Rim, annual sales for the world’s leading retailer, roaster, and brand of specialty coffee are at $5 billion.
A double shot at success
“I was introduced to the world of the consumer and loved it,” Gass says of her undergraduate internship and postgraduate position in Cincinnati-based Procter & Gamble’s health-care products research and development group. Along with her knowledge of chemical engineering, Gass discovered a knack for understanding the consumer and driving innovations from that perspective. “One of the great models P&G provides is that the technical and the consumer perspectives coexist.”
When her husband, Scott, had the opportunity to move to the West Coast, Gass considered, “Why not? I feel ready for an entrepreneurial adventure.” At Seattle-based Starbucks, her passion for discerning consumer needs and attitudes transformed the coffee giant’s newly introduced ice-blended coffee and mocha drink line into a mini-empire; at the same time, she attended the University of Washington’s evening executive MBA program, earning her degree in 1999. “That’s just one indication of how inspiring it is for me at Starbucks,” she says, crediting the company’s entrepreneurial culture. “We’re known for how well we treat our partners,” she adds, referencing the term Starbucks uses for its employees. All partners are granted stock options—Starbucks was one of the first companies to offer this to its part-timers before becoming publicly traded; part-time partners also receive comprehensive health coverage. As a result of these and other benefits, Starbucks now ranks No. 11 of 100 best companies to work for in America (according to Fortune’s Top 100 and the Great Place to Work Institute).
As Starbucks has grown, so have Gass’s responsibilities. In 2001 she was promoted to vice president of the beverage category, which represents 70 percent of the company’s product portfolio. In May 2004 she was elevated to senior vice president, category management, where she oversees a 150-person department and drives the company’s beverage, food, coffee, and merchandise product line globally. “This includes leading talented partners on both the product marketing and R&D sides of the business,” she explains. “In essence, this team is the innovation engine for Starbucks retail stores.”
“We make the idea of great coffee better known generally. And we educate the public about the quality and experience of a phenomenal cup of coffee.”
Engineering her career
Gass is quick to credit her undergraduate education for her business success, citing the WPI approach to education, with its blend of academic skills and projects. “The project piece was a critical component that showed me how to be successful in the corporate world,” she says. “And the notion of collabo-ration is so fundamental to how we operate at Starbucks.” Her professors, she adds, “were inspiring about academics, leadership, and life.”
Gass did her science, technology, and society project in Washington, D.C., assessing the progress on key Superfund program projects with Rick Sisson, director and professor of manufacturing engineering, materials science and engineering, and mechanical engineering. “Michelle was one of the best students I ever had,” Sisson says, noting that Gass and her project partners worked 12-hour days in Washington and that her presentation wowed higher-ups at the Environmental Protection Agency. “She drove the whole thing. Michelle’s the reason that project was so incredible.”
“The formal presentation I gave for that project [which won the President’s IQP Award that year] was my first,” says Gass. “Through it, I found I really enjoyed public speaking and the excitement of sharing a vision. Now I give presentations and speeches every day—in board rooms, in meetings with Wall Street analysts, and to thousands of partners.” [Gass will receive WPI’s Ichabod Washburn Young Alumni Award for Professional Achievement at Reunion Weekend 2005.]
The next cuppa
Gass sees tremendous opportunities for Starbucks in coffee’s continuing popularity. “Coffee is a staple in people’s lives,” she says. “In the United States alone, 50 percent of the population consumes coffee every day. We see this figure as an opportunity to build more stores and bring in more customers, and we have significant plans to do that. We see very strong growth in the coming five years. Within the company, we still think of Starbucks as being quite young.”
Too, the company’s international trade policies are considered progressive: in 2003, 97 percent of its coffee purchases were at outright prices, versus commodities market prices. “We pay $1.20 per pound, a significant premium over commodity prices of $.55 and $.70 per pound,” says Gass. “The prices we pay our farmers help them maintain sustainable businesses, and we have a sustainable supply of high-quality coffee.”
As for how other coffeeshops fare against such an enormous competitor, industry watchers say Starbucks doesn’t stifle the little guys. “We’ve seen huge growth in the independent coffeeshop market, even with Starbucks’ growth,” says Matt Milletto, consulting director of the Eugene, Ore.–based Bellissimo Coffee InfoGroup Inc., which provides consulting services to independent coffeehouses. According to the latest estimates by the Specialty Coffee Association of America, more than half of the 18,000-plus coffeeshops across the nation are independents.
“We make the idea of great coffee better known generally,” says Gass. “And we educate the public about the quality and experience of a phenomenal cup of coffee.”
A pot of gold
“I feel very proud to be associated with Starbucks,” says Gass. “If I didn’t feel absolutely impassioned about my work, I wouldn’t be here.”
The energy and passion she demonstrates for her employer is surpassed only by her celebration of family. “Scott and our two children are the light of my life,” Gass says. She attends all of 5-year-old Megan’s school plays and dance recitals and enjoys plenty of playtime with toddler Will. “Starbucks is very supportive of my family life. We’re all thriving—my family, the company, it all fits together so well. I really feel this job has been my destiny.”firstname.lastname@example.org
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Last modified: Apr 12, 2005, 14:43 EDT