In 1987, at the age of 34, Howard Schultz organized a group of investors and purchased his former employer, Starbucks Coffee Company. The small Seattle-based coffee roaster took its name from the coffee-loving first mate in Herman Melville's novel Moby Dick. Schultz renamed his company the Starbucks Corporation.
Schultz's coffee bars were an instant success, fueling rapid growth and expansion, not only for Starbucks but also for the coffee industry as a whole. This new coffee culture supported a proliferation of stores and other sales avenues for Starbucks' beans. The company owns all of its stores, despite the constant stream of franchise inquiries, and has been steadily opening shops throughout the country. In 1992 Starbucks became the first specialty coffee company to go public, a testament to its size and prospects.
Starbucks' first major venture outside of the northwestern part of the nation was Chicago, where mail-order sales were strong. The company's specialty sales division developed new business through Nordstrom's department stores and established Starbucks coffee bars within Barnes and Noble bookstores. Starbucks also formed a partnership with Pepsico, Inc.to create and distribute a new ready-to-drink coffee-based beverage, Frappuccino, as well as entered into a licensing agreement with Kraft Foods. The company even developed a relationship with Capitol Records, releasing Blue Note Blend coffee and an accompanying jazz compilation on compact disc.