Starbucks CEO Howard Schultz talks tea expansion, China pricing differences

(CBS News) Howard Schultz joined Starbucks in 1982. The Seattle-based chain only had four stores. Now, he is chief executive officer of a company with more than 19,000 locations in 62 countries.

On Thursday, Starbucks makes another big move: opening its first tea house in New York City. Schultz said on "CBS This Morning" Wednesday that there's a market for tea drinkers that's "ripe for innovation."

Asked why the company is investing in a separate store called Teavana - and not a store that's part of Starbucks - Schultz said, "We sell tea in Starbucks, but I think the experience is very different. I think coffee is something that is quick - it's transactional. I think tea is more Zen-like. It requires a different environment. I think people really want to spend more time around tea, and I think tea requires a different explanation ... The growth of the company and the license that Starbucks has is to participate in other food and beverage opportunities. We have a global business ... and in many parts of the world, tea is much, much bigger than coffee, and we're going to bring tea and bring our capability and our understanding of what we've done for coffee to tea."

In recent days, Starbucks has faced intense scrutiny in recent days over the pricing of its products in China. "CBS This Morning" co-host Gayle King said noted that the same drink in China that costs $4.43 can be purchased in the U.S. for $3.

Schultz explained costs are the reason for the price hike. He said, "Our cost of setting up the business in China and our cost in doing business in China is actually more than it's been in many other markets, so that is why we charge more money, and in the last 24 hours people have begun to understand that."

He added, "I think the issue for all of us in business today is we must be transparent and truthful, and that's what we've tried to do."

For more with Schultz on his business, his political activism and more, watch his full interview above.