Balancing the bottom line with the top

Journal Record, The (Oklahoma City), Feb 28, 2002

SEATTLE (AP) -- Like any fast-growing global corporation, Starbucks Coffee Co. hopes to spend 2002 expanding aggressively into the international markets while building record revenues. But unlike most major corporations, it is also is working feverishly to maintain its image of a homegrown company devoted to doing good works. The question, Chairman Howard Schultz said at the company's annual shareholders meeting Tuesday, is "Can we get big and stay small?"

The two-hour gathering, in a packed house at Seattle's Benaroya Hall, opened and closed with the traditional trappings of a shareholders meeting -- financial outlooks and a shareholder votes on whom to elect to the board and hire as an independent auditor. But the Seattle coffee retailer spent most of the presentation listing its good works. One video montage showed the company's employees cleaning up parks and serving coffee at AIDS fund-raisers. Another touted its efforts to offer medical care in the areas where it grows coffee, and another was simply devoted to employees talking about how much they like working at Starbucks. That wasn't all. Ethnic music played and a gospel choir sang I Believe I Can Fly. Employees waved flags from around the world -- including the American flag, which got a standing ovation.

A Sept. 11 survivor who found refuge in a Starbucks store was spotlighted in the audience, after his reunion with the man who pulled him inside to safety. A New York City-based Starbucks manager shared a tearful embrace with Starbucks President Orin Smith, after receiving a corporate award for his efforts to serve coffee to rescue workers and victims after the attacks on the World Trade Center.

It would be easy to forget that this is a company that makes and serves coffee. That's no mistake. "There's probably only so much we can say about the coffee," Smith said in an interview after the meeting.

Although the company believes it serves and sells good coffee, Smith said it also thinks it needs more than that to distinguish itself from the competition. "In some respects this is more a people business than a coffee business," he said.

Mystery ketchup

PITTSBURGH (AP) -- Apparently committed to more colorful meals, the folks who brought you purple and green ketchup are ready with three more colors: Pink, orange and teal.

H.J. Heinz in late April will roll out a limited supply of one million EZ Squirt bottles, each camouflaging one of three new colors of ketchup inside. Buyers won't know, until they squirt it on a burger or fries, which color they have. Customer reaction will help decide which of the three becomes Heinz' new permanent hue and is added to the current palette of red, green and purple. The Pittsburgh- based company figures that, by producing only a limited amount of the mystery bottles, they'll fly off the shelves, reproducing the buzz that accompanied the creation of green and purple ketchup in recent years.

Adding more colors is widely viewed as an attempt to give kids even more say over their parents' grocery store lists.

Struggling even in Kentucky

FRANKFORT, Ky. (AP) -- From fabled Churchill Downs, the home of the Kentucky Derby, to small, worn and rundown Ellis Park along the Ohio River, race tracks in Kentucky report fewer patrons, less betting and a scarcity of horses to fill race cards. The threat to Kentucky's signature industry is coming from slot machines, racing officials argue. And since they can't beat `em, horse racing advocates want to join `em. Under a proposal unveiled Tuesday, slot machines would be installed at Kentucky race tracks, offering millions in additional revenue for the state and a windfall for horse tracks.

The idea of additional gambling in Kentucky has been floated for a decade, ever since the first riverboat was launched along the Ohio River in Illinois. But until Tuesday, no legislation ever had been introduced in Kentucky's General Assembly. Rep. Jim Callahan, the House Democratic caucus chairman and prime sponsor of the bill, said the state could realize as much as $1.7 billion in the first six years of slot machines at tracks.

The bill comes while Kentucky has seen its revenues already fall $500 million short of estimates this year. Even so, Callahan acknowledged the prospect for passage of the legislation is anything but a sure bet. So far, legislators have generally been noncommittal, except to say the horse industry has made a case that it is suffering from riverboat competition and the state is losing potential revenue.

Opponents of expanded gambling, mostly a coalition of religious groups with the tacit support of some of the owners of riverboat casinos in neighboring states, scoff at cries of poverty from horse racing. They point to the 2001 record earnings from Churchill Downs' parent company. "Hard time? I don't think so. Can't compete? They're competing just fine," said the Rev. Nancy Jo Kemper, director of the Kentucky Council of Churches and moderator of Citizens Against Gambling Expansion.

But the gambling environment has become fierce. Race track owners say huge gambling boats from Indiana have siphoned millions of dollars from betting windows and Kentucky tax coffers. And Turfway Park President Bob Elliston noted the number of horses entered there has declined as trainers and owners choose instead to race at West Virginia's Mountaineer Park, which includes horse racing and a huge slot machine operation just west of Pittsburgh.