Fluent Essays

Please refer to Starbucks and Facebook financial statements for this final project milestone. Chose between Starbucks and Facebook. In the Annual Report of the company you've chosen, based on the information in the MD&A section, what would you determine to be the company’s strategic, financial and operational goals? How do the operational goals align with the financial goals? This milestone will contribute to the Final Project in Module 7.  Submission should be no longer than three pages, excluding the Cover & Reference Pages. Company Information  Use Starbucks' Annual Reports (Links to an external site.).  Here is the link to the SB2017 PDF – 10-K Annual Report (Links to an external site.).   Use Facebook's Annual Reports (Links to an external site.). Here is the link to the 2017 PDF – 10-K Annual Report (Links to an external site.).  LINKS - https://investor.fb.com/financials/?section=annualreports              https://investor.starbucks.com/financial-data/annual-reports/default.aspx The 8-K’s are the Quarterly’s and the students should not use those. 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JOEJDBUFT�B�EFDMJOF�JO�VTBHF�BNPOH�ZPVOHFS�VTFST �UIJT�BHF�EBUB�JT�VOSFMJBCMF�CFDBVTF�B�EJTQSPQPSUJPOBUF�OVNCFS�PG�PVS�ZPVOHFS�VTFST SFHJTUFS�XJUI�BO�JOBDDVSBUF�BHF��"DDPSEJOHMZ �PVS�VOEFSTUBOEJOH�PG�VTBHF�CZ�BHF�HSPVQ�NBZ�OPU�CF�DPNQMFUF� *O�BEEJUJPO �PVS�EBUB�SFHBSEJOH�UIF�HFPHSBQIJD�MPDBUJPO�PG�PVS�VTFST�JT�FTUJNBUFE�CBTFE�PO�B�OVNCFS�PG�GBDUPST �TVDI�BT�UIF�VTFS�T *1�BEESFTT�BOE�TFMG�EJTDMPTFE�MPDBUJPO��5IFTF�GBDUPST�NBZ�OPU�BMXBZT�BDDVSBUFMZ�SFGMFDU�UIF�VTFS�T�BDUVBM�MPDBUJPO��'PS�FYBNQMF �B�VTFS�NBZ BQQFBS�UP�CF�BDDFTTJOH�'BDFCPPL�GSPN�UIF�MPDBUJPO�PG�UIF�QSPYZ�TFSWFS�UIBU�UIF�VTFS�DPOOFDUT�UP�SBUIFS�UIBO�GSPN�UIF�VTFS�T�BDUVBM�MPDBUJPO� 5IF�NFUIPEPMPHJFT�VTFE�UP�NFBTVSF�VTFS�NFUSJDT�NBZ�BMTP�CF�TVTDFQUJCMF�UP�BMHPSJUIN�PS�PUIFS�UFDIOJDBM�FSSPST��0VS�FTUJNBUFT�GPS�SFWFOVF CZ�VTFS�MPDBUJPO�BOE�SFWFOVF�CZ�VTFS�EFWJDF�BSF�BMTP�BGGFDUFE�CZ�UIFTF�GBDUPST�� … Fiscal 2017 Annual Report UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended October 1, 2017 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission File Number: 0-20322 Starbucks Corporation (Exact Name of Registrant as Specified in its Charter) Washington 91-1325671 (State of Incorporation) (IRS Employer ID) 2401 Utah Avenue South, Seattle, Washington 98134 (206) 447-1575 (Address of principal executive offices, zip code, telephone number) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on Which Registeredg g Common Stock, $0.001 par value per share Nasdaq Global Select Market Securities Registered Pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No N Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation of S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Emerging growth company If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price of the registrant’s common stock on April 2, 2017 as reported on the NASDAQ Global Select Market was $82 billion. As of November 10, 2017, there were 1,422.8 million shares of the registrant’s Common Stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the definitive Proxy Statement for the registrant’s Annual Meeting of Shareholders to be held on March 21, 2018 have been incorporated by reference into Part III of this Annual Report on Form 10-K. STARBUCKS CORPORATION Form 10-K For the Fiscalr YearYY Endedr October 1, 2017r TABLE OFTT CONTENTSF PART I Item 1 Business 2 Item 1A Risk Factors 10 Item 1B Unresolved Staff Comments 17 Item 2 Properties 17 Item 3 Legal Proceedings 17 Item 4 Mine Safety Disclosures 17 PART II Item 5 Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 18 Item 6 Selected Financial Data 20 Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A Quantitative and Qualitative Disclosures About Market Risk 45 Item 8 Financial Statements and Supplementary Data 46 Index For Notes to Consolidated Financial Statements 51 Report of Independent Registered Public Accounting Firm 85 Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 86 Item 9A Controls and Procedures 86 Item 9B Other Information 88 PART III Item 10 Directors, Executive Officers and Corporate Governance 89 Item 11 Executive Compensation 89 Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters 89 Item 13 Certain Relationships and Related Transactions, and Director Independence 89 Item 14 Principal Accounting Fees and Services 89 PART IV Item 15 Exhibits, Financial Statement Schedules 90 SIGNATURES 97 CAUTIONARYRR NOTE REGARDING FORY WRR ARD-LOOKING STWW ATT TEMENTSAA This Annual Report on Form 10-K includes “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “seeks” or words of similar meaning, or future or conditional verbs, such as “will,” “should,” “could,” “may,” “aims,”yy “intends,” or “projects.” A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances,A and those future events or circumstances may not occur. You should not place undue reliance on forward-looking statements, YY which speak only as of the date of this Annual Report on Form 10-K. These forward-looking statements are all based on currently available operating, financial and competitive information and are subject to various risks and uncertainties. Our actual future results and trends may differ materially depending on a variety of factors, including, but not limited to, the risks ff and uncertainties discussed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. Given these risks and uncertainties, you should not rely on forward-looking statements as a prediction of actual results. Any or all of the forward-looking statements contained in this Annual Report on Form 10-K and any other public statement made by us, including by our management, may turn out to be incorrect. We are including this cautionary note WW to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for forward-looking statements. We expressly disclaim any obligation to update or revise any forward-looking statements, whether WW as a result of new information, future events or otherwise. Starbucks Corporation 2017 Form 10-K 1 PART I Item 1. Business General Starbucks is the premier roaster, marketer and retailer of specialty coffee in the world, operating in ff 75 countries. 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 cofWW fees that we sell, along with handcrafted cofff fee, tea and other beverages and a ff variety of high-quality food items, including snack offerings, through company-operated stores. ff We also sell a variety of cofWW fee ff and tea products and license our trademarks through other channels such as licensed stores, grocery and foodservice accounts. In addition to our flagship Starbucks Coffee brand, we sell goods and services under the following brands: ff Teavana,TT Tazo, TT Seattle’s Best Coffee, Evolution Fresh, La Boulange and Ethos.ff Our objective is to maintain Starbucks standing as one of the most recognized and respected brands in the world. To achieveTT this, we are continuing the disciplined 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 in each market. In addition, by leveraging the experience gained through our traditional store model, we continue to offer consumers new cofff fee and other products in a variety of forms, across new categories, diverse channels and ff alternative store formats. We also believe our Starbucks Global Social Impact strategyWW , commitments related to ethically yy sourcing high-quality coffee, contributing positively to the communities we do business in and being an employer of choice areff contributors to our objective. In this Annual Report on Form 10-K (“10-K” or “Report”) for the fiscal year ended October 1, 2017 (“fiscal 2017”), Starbucks Corporation (together with its subsidiaries) is referred to as “Starbucks,” the “Company,” “we,” “us” or “ouryy .” Segment Financial Information We have WW four reportable operating segments: 1) r Americas, which is inclusive of the U.S., Canada, and Latin America; 2) China/ Asia Pacific (“CAP”); 3) Europe, Middle East, and Africa (“EMEA”) and 4) Channel Development. We also have several non-WW reportable operating segments, including Teavana retail stores and Seattle's Best CofTT fee, as well as certain developing ff businesses such as Siren Retail, which includes the Starbucks ReserveTM Roastery & Tasting Rooms, certain StarbucksTT ReserveTM locations and Princi operations. Collectively, the combined group of non-reportable operating segments will be yy referred to as All Other Segments. Revenues from our reportable segments and All Other Segments as a percentage of total net revenues for fiscal 2017 were as follows: Americas (70%), CAP (P 14%), EMEA (A 5%), Channel Development (9%) and All Other Segments (2%). Our Americas, CAP, and EMEAPP segments include both company-operated and licensed stores. Our A Americas segment is our most mature business and has achieved significant scale. Certain markets within our CAP and EMEAP operations are still in the A early stages of development and require a more extensive support organization, relative to their current levels of revenue and operating income, than our Americas operations. The Americas, CAP and EMEAP segments also include certain foodserviceA accounts, primarily in Canada, Japan and the U.K. Our Channel Development segment includes roasted whole bean and ground coffees, premium ff TazoTT ® teas, Starbucks- and Tazo-branded single-serve products, a variety of ready-to-drink beverages, such as FrappuccinoTT ®, Starbucks Doubleshot® and Starbucks Refreshers® beverages and other branded products sold worldwide through channels such as grocery stores, warehouse clubs, specialty retailers, convenience stores and U.S. foodservice accounts. Starbucks segment information is included in Note 16, Segment Reporting, to the consolidated financial statements included in Item 8 of Part II of this 10-K. 2 Starbucks Corporation 2017 Form 10-K Revenue Components We generate nearly all of our revenues through company-operated stores, licensed stores, consumer packaged goods (“CPG”) WW and foodservice operations. Company-operated and Licensed Store Summary as of October 1, 2017r Americas As a% of Total Americas Stores CAP As a % of Total CAP Stores EMEA As a % of Total EMEA Stores All Other Segments As a% of Total All Other Segments Stores Total As a% of Total Stores stores 9,413 57 % 3,070 41 % 502 17 % 290 89 % 13,275 49 % Licensed stores 7,146 43 % 4,409 59 % 2,472 83 % 37 11 % 14,064 51 % Total 16,559 100% 7,479 100% 2,974 100% 327 100% 27,339 100% 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 and expected ultimate size of the market for Starbucks and our ability to leverage the support infrastructure within a geographic region. Company-operated Stores Revenue from company-operated stores accounted for 79% of total net revenues during fiscal 2017. Our retail objective is to be the leading retailer and brand of coffee and tea in each of our tarff get markets by selling the finest quality coffee, tea and related ff products, as well as complementary food and snack offerings, and by providing each customer with a unique ff Starbucks Experience. The Starbucks Experience is built upon superior customer service and a seamless digital experience as well as clean and well-maintained stores that reflect the personalities of the communities in which they operate, thereby building a high degree of customer loyalty. Our strategy for expanding our global retail business is to increase our market share in a disciplined manner, by selectively opening additional stores in new and existing markets, as well as increasing sales in existing stores, to support our long-term strategic objective to maintain Starbucks standing as one of the most recognized and respected brands in the world. 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. 3Starbucks Corporation 2017 Form 10-K Company-operated store data for the year-ended October 1, 2017: Stores Open as of Stores Open as of Oct 2, 2016 Opened Closed Transfers Net Oct 1, 2017 Americas: U.S. 7,880 372 (30) — 342 8,222 Canada 1,035 45 (8) 11 48 1,083 Brazil 104 5 (1) — 4 108 Total Americas 9,019 422 (39) 11 394 9,413 China/Asia Pacific(1): China 1,272 285 (17) — 268 1,540 Japan 1,140 90 (12) — 78 1,218 Thailand 273 39 — — 39 312 Singapore 126 10 (3) (133) (126) — Total China/Asia Pacific 2,811 424 (32) (133) 259 3,070 EMEA: U.K. 366 14 (21) (14) (21) 345 All Other 157 2 (2) — — 157 Total EMEA 523 16 (23) (14) (21) 502 All Other Segments: Teavana 355 — (67) — (67) 288 Evolution Fresh 2 — (2) — (2) — Siren Retail 1 1 — — 1 2 Total All Other Segments 358 1 (69) — (68) 290 Total company-operated 12,711 863 (163) (136) 564 13,275 (1) China/Asia Pacific store data includes the transfer of 133 Singapore company-operated retail stores to licensed stores as a result of the sale to Maxim's Caterers Limited in the fourth quarter of fiscal 2017. Starbucks® company-operated stores are typically located in high-traffic, high-visibility locations. Our ability to vary the size ff and format of our stores allows us to locate them in or near a variety of settings, including downtown and suburban retail centers, office buildings, university campuses and in select rural and offf f-highway locations.ff We are continuing the expansion of WW our stores, inclusive of Drive Thru formats that provide a higher degree of access and convenience, and alternative store formats, which are focused on an elevated Starbucks Experience for our customers. Retail sales mix by product type for company-operated stores: Fiscal Year Ended Oct 1, 2017 Oct 2, 2016 Sep 27, 2015 Beverages 73% 74% 73% Food 20% 19% 19% Packaged and single-serve coffees and teas 3% 3% 3% Other(1) 4% 4% 5% Total 100% 100% 100% (1) “Other” primarily consists of sales of serveware, ready-to-drink beverages and coffee-making equipment, among other ff items. 4 Starbucks Corporation 2017 Form 10-K Stored Vrr alue CarVV dsrr The Starbucks Card, our branded stored value card program, is designed to provide customers with a convenient payment method, support gifting and increase the frequency of store visits by cardholders, in part through the related Starbucks Rewards™ (previously My Starbucks Rewards®) loyalty program where available, as discussed below. Stored value cards are issued to customers when they initially load them with an account balance. They can be obtained in our company-operated and most licensed stores in North America, China, Japan, Latin America, and many of our markets in our CAP and EMEAP segments. Stored value cards can also be obtained on-line, via the Starbucks® Mobile App, and through other U.S. and international retailers. Customers may access their card balances by utilizing their stored value card or the Starbucks® Mobile App in participating stores, which also include certain TeavanaTT ™ locations. 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 the U.S. and Canada. In nearly all markets, including the U.S. and Canada, customers who register their cards are automatically enrolled in the Starbucks Rewards™ program. Registered members can receive various benefits depending on factors such as the number of reward points (“Stars”) earned. 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. Licensed Stores Revenues from our licensed stores accounted for 11% of total net revenues in fiscal 2017. Licensed stores generally have a lower gross margin and a higher operating margin than company-operated stores. Under the licensed model, Starbucks receives a reduced share of the total store revenues, but this is more than offset by the reduction in our share of costs as these areff primarily incurred by the licensee. In our licensed store operations, we 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. Most licensees are prominent yy retailers with in-depth market knowledge and access. As part of these arrangements, we sell coffee, tea, food and related ff products to licensees for resale to customers and receive royalties and license fees from the licensees. We also sell certainWW equipment, such as coffee brewers and espresso machines, to our licensees for use in their operations. Employees working in ff 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. For Starbucks® and TeavanaTT ™ stores within certain international markets, we also use traditional franchising and include these stores in the results of operations from our other licensed stores. 5Starbucks Corporation 2017 Form 10-K Licensed store data for the year-ended October 1, 2017: Stores Open as of Stores Open as of Oct 2, 2016 Opened Closed Transfers Net Oct 1, 2017 Americas: U.S. 5,292 477 (61) — 416 5,708 Mexico 563 71 (2) — 69 632 Latin America 369 66 (6) — 60 429 Canada 364 32 (8) (11) 13 377 Total Americas 6,588 646 (77) (11) 558 7,146 China/Asia Pacific(1): China 1,110 310 (24) — 286 1,396 Korea 952 164 (8) — 156 1,108 Taiwan 392 33 (5) — 28 420 Philippines 293 32 (1) — 31 324 Indonesia 260 62 (5) — 57 317 Malaysia 226 24 (2) — 22 248 All Other 399 76 (12) 133 197 596 Total China/Asia Pacific 3,632 701 (57) 133 777 4,409 EMEA: U.K. 532 69 (9) 14 74 606 Turkey 314 80 (7) — 73 387 United Arab Emirates 148 21 (5) — 16 164 Germany 161 6 (11) — (5) 156 Saudi Arabia 92 32 — — 32 124 Kuwait 95 24 (1) — 23 118 Russia 107 11 (3) — 8 115 Spain 96 23 (6) — 17 113 All Other 574 132 (17) — 115 689 Total EMEA 2,119 398 (59) 14 353 2,472 All Other Segments: Teavana 34 4 (1) — 3 37 Seattle's Best Coffee 1 — (1) — (1) — Total All Other Segments 35 4 (2) — 2 37 Total licensed 12,374 1,749 (195) 136 1,690 14,064 (1) China/Asia Pacific store data includes the transfer of 133 Singapore company-operated retail stores to licensed stores as a result of the sale to Maxim's Caterers Limited in the fourth quarter of fiscal 2017. Consumer Packaged Goodsr Revenues from sales of consumer packaged goods comprised 8% of total net revenues in fiscal 2017. Our consumer packaged goods business includes both domestic and international sales of packaged coffee and tea as well as a variety of ready-to-drink ff beverages and single-serve coffee and tea products to groceryff , warehouse clubs and specialty retail stores. It also includesyy revenues from product sales to and licensing revenues from manufacturers that produce and market Starbucks-, Seattle’s Best Coffee- and ff Tazo-branded products through licensing agreements.TT 6 Starbucks Corporation 2017 Form 10-K Foodservice Revenues from foodservice accounts comprised 2% of total net revenues in fiscal 2017. We sell StarbucksWW ® and Seattle’s Best Coffeeff ® roasted whole bean and ground coffees, a selection of premium ff TazoTT ® teas, Starbucks VIA® Ready Brew, and other ww coffee and tea-related products to institutional foodservice companies that service business and industryff , education, healthcare, yy office cofff fee distributors, hotels, restaurants, airlines and other retailers. ff We also sell our Seattle’WW s Best Coffeeff ® through arrangements with national accounts. The majority of the sales in this channel come through national broadline distribution networks with SYSCO Corporation, U.S. Foodservice and other distributors. Product Supply Starbucks is committed to selling the finest whole bean coffees and cofff fee beverages. ff To ensure compliance with our rigorous TT coffee standards, we control cofff fee purchasing, roasting and packaging and the global distribution of cofff fee used in our ff operations. We purchase green cofWW fee beans from multiple cofff fee-producing regions around the world and custom roast them to ff our exacting standards for our many blends and single origin coffees.ff The price of coffee is subject to significant volatilityff . Although most coffee trades in the commodity market, high-altitude ff arabica coffee of the quality sought by Starbucks tends to trade on a negotiated basis at a premium above the “C” cofff feeff commodity price. 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 weatherff , natural disasters, crop disease, general increase in farm inputs and costs of production, inventory levels and political and economic conditions. Price is also impacted by trading activities in the arabica coffee futures market, including hedge funds and commodity index funds. In ff addition, green coffee prices have been afff fected in the past, and may be afff fected in the future, by the actions of certain ff organizations and associations that have historically attempted to influence prices of green coffee through agreements ff establishing export quotas or by restricting coffee supplies.ff We buy cofWW fee using fixed-price and price-to-be-fixed purchase commitments, depending on market conditions, to secure anff adequate supply of quality green coffee. Price-to-be-fixed contracts are purchase commitments whereby the qualityff , quantityyy ,yy delivery period, and other negotiated terms are agreed upon, but the date, and therefore the price, at which the base “C” coffee ff commodity price component will be fixed has not yet been established. For most contracts, either Starbucks or the seller has the option to “fix” the base “C” coffee commodity price prior to the delivery date. For other contracts, Starbucks and the seller mayff agree upon pricing parameters determined by the base “C” coffee commodity price. Until prices are fixed, we estimate the total ff cost of these purchase commitments. Total green cofTT fee purchase commitments as of ff October 1, 2017 were $1.2 billion, comprised of $860 million under fixed-price contracts and an estimated $336 million under price-to-be-fixed contracts. As of October 1, 2017, none of our price-to-be-fixed contracts were effectively fixed through the use of futures contracts. ff All price- to-be-fixed contracts as of October 1, 2017 were at the Company’s option to fix the base “C” coffee commodity price ff component. Total purchase commitments, together with existing inventoryTT , are expected to provide an adequate supply of green yy coffee through fiscal ff 2018. We depend upon our relationships with cofWW fee producers, outside trading companies and exporters for our supply of green ff coffee.ff We believe, based on relationships established with our suppliers, the risk of non-delivery on such purchaseWW commitments is remote. To help ensure the future supply of high-quality green cofTT fee and to reinforce our leadership role in the cofff fee industryff ,yy Starbucks operates eight farmer support centers. t The farmer support centers are staffed with agronomists and sustainabilityff experts who work with coffee farming communities to promote best practices in cofff fee production designed to improve both ff coffee qualityff , yields and agronomy support to address climate and other impacts.yy In addition to coffee, we also purchase significant amounts of dairy products, particularly fluid milk, to support the needs of our ff company-operated stores. We believe, based on relationships established with our dairy suppliers, that the risk of non-delivery WW of sufficient fluid milk to support our stores is remote.ff Products other than whole bean coffees and cofff fee beverages sold in Starbucksff ® stores include tea and a number of ready-to- drink beverages that are purchased from several specialty suppliers, usually under long-term supply contracts. Food products, such as pastries, breakfast sandwiches and lunch items, are purchased from national, regional and local sources. Our food program continues to develop, and we expect the amount of food products purchased to impact our operations. We alsoWW purchase a broad range of paper and plastic products, such as cups and cutlery, from several companies to support the needs of yy our retail stores as well as our manufacturing and distribution operations. We believe, based on relationships established withWW these suppliers and manufacturers, that the risk of non-delivery of sufficient amounts of these items is remote.ff 7Starbucks Corporation 2017 Form 10-K Competition Our primary competitors for coffee beverage sales are specialty cofff fee shops offf fering premium and artisanal products and ff experiences. In almost all markets in which we do business, there are numerous competitors in the specialty coffee beverage ff business. We believe that our customers choose among specialty cofWW fee retailers primarily on the basis of product qualityff ,yy service and convenience, as well as price. We continue to experience direct competition from larWW ge competitors in the U.S. quick-service restaurant sector and the U.S. ready-to-drink coffee beverage market, in addition to well-established companies in ff many international markets. We also compete with restaurants and other specialty retailers for prime retail locations and WW qualified personnel to operate both new and existing stores. Our coffee and tea products sold through our Channel Development segment compete directly against specialty cofff fees and teasff sold through grocery stores, warehouse clubs, specialty retailers, convenience stores and U.S. foodservice accounts and compete indirectly against all other coffees and teas on the market. ff Trademarks, Copyrights, Patents and Domain NamesTT Starbucks owns and has applied to register numerous trademarks and service marks in the U.S. and in other countries throughout the world. Some of our trademarks, including Starbucks, the Starbucks logo, Starbucks Reserve, Tazo, Seattle’TT s Best Coffee,ff Teavana, Frappuccino, Starbucks TT VIA and La Boulange are of material importance. A The duration of trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. We own numerous copyrights for items such as product packaging, promotional materials, in-store graphics and training WW materials. We also hold patents on certain products, systems and designs. In addition, Starbucks has registered and maintainsWW numerous Internet domain names, including “Starbucks.com,” “Starbucks.net,” “Tazo.com,” …