Starbucks Corp

Core operations · Quality control and product defects

We may experience food or beverage-safety incidents such as contamination, mislabeling, or adulteration during any stage of production or preparation. A failure to meet quality standards—even if due to factors beyond our control—could result in public exposure, regulatory scrutiny or action, litigation (including product liability claims and class actions), or temporary store closures, which could materially harm our business.

Human capital and workforce · Labor relations and union negotiations

Starting in September 2021, Starbucks partners at a number of company-operated stores sought union representation through elections conducted by the National Labor Relations Board. Unions have secured representation rights at around 6% of our more than 10,000 U.S. company-operated stores, with potentially more to follow, and Starbucks has been engaged in collective bargaining for initial collective bargaining agreements for these stores.

Core operations · Operational disruption and business continuity

Any material disruption to our supply chain—such as the loss of a roasting plant, logistics interruptions, trade restrictions, pandemics, labor shortages, natural disasters, or geopolitical conflicts—could materially impact our business and profitability.

Capital structure and performance · Credit rating and cost of capital

A disruption in the credit markets or a downgrade of our current credit rating could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, which could adversely affect our liquidity and capital resources or significantly increase our cost of capital.

International and currency · International operations and emerging markets

Operating in 89 global markets, we face diverse cultural, regulatory, geopolitical, and economic environments. Our success depends on navigating these differences effectively. Our international operations are also subject to additional inherent risks of conducting business abroad, such as uncertainty in economic, legal, regulatory, social, and political conditions, including rising anti-American sentiment in certain markets.

Natural and catastrophic events · Climate change and environmental impact

Climate change can affect the supply and pricing of coffee and other non-coffee inputs due to weather volatility, water scarcity, and other environmental factors in producing regions. It may also impact water availability across our supply chain and markets. Operating in 89 global markets, our properties and operations are increasingly vulnerable to extreme weather events—such as wildfires and droughts.

Economic and market conditions · Consumer spending and confidence

As a retailer reliant on discretionary spending, our financial results are sensitive to macroeconomic conditions. A prolonged downturn or slow recovery may reduce consumer spending, leading to lower demand or shifts to lower-priced products. Factors such as job loss, inflation, interest rate changes, taxation, credit access, public health crises, trade disputes, and geopolitical instability can all impact consumer behavior.

Innovation and product development · Intellectual property protection and infringement

Our brand names, trademarks, and other intellectual property are critical assets that support brand awareness and product development across domestic and international markets. Securing and enforcing intellectual property rights—especially in rapidly evolving areas—can be costly and time-consuming. Additionally, the laws and enforcement mechanisms we rely on to protect our intellectual property from unauthorized use may be inadequate.

Strategic execution · Joint venture and partnership risks

Our global business strategy relies significantly on a variety of business partners, including licensees, joint venture partners, third-party manufacturers, distributors, and retailers. Our Channel Development business is heavily reliant on Nestlé, which holds global rights to distribute certain Starbucks branded packaged goods. If Nestlé fails to meet its obligations or support our brand, it could materially impact Channel Development and our overall financial results.

Market position and competition · Pricing pressure and margin compression

Our continued success depends on our ability to adapt brand, marketing, promotional, advertising, and pricing strategies to shifting economic conditions, competitive pressures, and evolving customer preferences. If our marketing or pricing strategies underperform relative to competitors, our sales and market share could decline.

Market position and competition · Competitive pressure and market share loss

The specialty coffee market is highly competitive across product quality, innovation, service, convenience (e.g., delivery and mobile ordering), and price. We face increasing competition in all channels and markets and do not hold leadership positions in every segment. In the U.S., large quick-service competitors offering coffee, tea, and other competitive products may reduce customer traffic and transaction value.

Reputation and brand · Social media and digital reputation

Negative commentary about Starbucks, even if inaccurate or malicious, has in the past, and could in the future, damage the value of our brand, and adverse impacts may be compounded by social media, video-sharing, and messaging platforms that could dramatically increase the speed with which negative publicity may be disseminated, often before we have a meaningful opportunity to investigate, respond to, and address an issue.

Corporate governance · Shareholder rights and activism

Certain activist shareholder actions have caused, and could continue to cause, us to incur expense, hinder execution of our business strategy, and adversely impact our stock price. Activist campaigns can result in significant costs, including legal expenses and diversion of management and Board attention.

Reputation and brand · Brand damage and negative publicity

The Starbucks brand is recognized throughout most of the world, and we have received high ratings in global brand value studies. To be successful in the future, we believe we must preserve, grow, and leverage the value of our brands across all sales channels. Various factors, events, or conditions may result in a diminution or erosion of trust in our brand value.

Data and privacy · Data protection and privacy laws

We are subject to a complex and rapidly evolving landscape of local, national, and international laws and regulations governing the collection, use, retention, protection, disclosure, transfer, and other processing of personal data. These laws and regulations are frequently amended, reinterpreted, and increasingly enforced, often resulting in heightened compliance obligations, litigation risk, and operational costs.

Industry regulation · Regulatory compliance and changes

Environmental regulations are evolving, with new or expanded rules targeting carbon emissions, plastic use, and commercial water consumption. These changes may lead to higher compliance costs, capital expenditures, and other financial obligations for us and our partners, potentially affecting profitability.

Legal and litigation · Intellectual property disputes

We also face the risk of infringing third-party intellectual property rights. Any infringement claims, even unmerited claims, can be time consuming and disruptive to our ability to generate revenues or enter into new market opportunities. Further, such claims may lead to expensive and disruptive litigation or significantly increased costs as a result of our attempt to license the intellectual property rights.

Legal and litigation · Litigation and legal proceedings

We are, and may continue to be, subject to litigation and legal proceedings that could adversely affect our business. These may involve claims from employees, customers, regulators, suppliers, shareholders, or others, including class or collective actions. Allegations have included claims related to employment practices, food safety and product defects, data privacy, discrimination, personal injury, advertising, intellectual property disputes, securities violations, and other matters.

Digital transformation and innovation · Artificial intelligence and automation

Emerging technologies, including artificial intelligence and machine learning, may not deliver expected efficiencies and could introduce new risks, such as those related to cybersecurity, data privacy, inaccuracies, hallucinations, bias or discrimination and intellectual property infringement, which may become more pronounced as the Company's reliance on such technologies increases.

Cybersecurity and data protection · Third party data security and vendors

Our information technology systems and those of our third-party service providers, business partners, and licensees—including those supporting point-of-sale, mobile platforms, payment systems, delivery, rewards, and administrative functions—store personal, financial, and confidential data from customers, employees, business partners, and licensees. Although we have put in place policies, procedures, and technological safeguards designed to protect the security of this information, we cannot guarantee that this information will not be improperly disclosed or accessed.