Starbucks Sells Fairtrade International Certified Coffee
Starbucks Coffee is a chain that sells Fairtrade Certified coffee. Starbucks began purchasing in 2000 and now became one of the world’s prime purchasers of Fairtrade Certified coffee (“Coffee.”). Fairtrade International Charter’s has five core principles that companies are to achieve for certification and the next paragraphs will showcase how Starbucks achieves them.
Principle 1: Market access for marginal producers
Starbucks achieved the first principle by purchasing “coffee from small farmers in 29 different countries … [and buying] coffee at a higher than market price and guarantees future purchases” (Alter). With this, Starbucks has greatly impacted these small-scale farmer’s lives by insuring they have good long-term stability and financial security, farmers who aren’t otherwise noticed in the conventional market options. And “globally, Starbucks contributed over $3.5 million in Fairtrade premiums for coffee-growing communities” (Alter).
Principle 2: Sustainable and equitable trading relationships
Starbucks fulfills...
The key to its success lies not only in the quality of its products but also the ability to differentiate itself from the competition. With Starbucks, it has always been about quality. The company manages stringent quality control measures for sourcing the finest coffee beans, roasting processes as well as customer service and ancillary products. Furthermore, differentiation is key to market control and Starbucks is unquestioningly the most differentiated specialized coffee brands in the world. From the design of its coffee shops to the music played to the types of products offered, everything has a touch of uniqueness.
These three pillars are used to create a well-balanced approach to every aspect of coffee farming. Tim Hortons believes all three aspects are needed to create a sustainable organization. By helping coffee farmers create a better quality of coffee and giving them the tools needed to earn a better living for themselves and their families, the Tim Hortons Coffee Partnership is helping the local economy. The Partnership helps coffee farmers increase their quality of coffee, increase the quantity of coffee, and increasing their revenue. The Partnership provides training to coffee farmers in Brazil, Colombia, Guatemala, and Honduras; the regions where Tim Hortons grow and receive their coffee. According to Tim Hortons sustainability report, they focus on “agronomic, organization, shade, soil, environmental, farm management and accounting training – all the tools farmers need to run a successful and sustainable business”. The Partnership has made it their goal to help coffee farmers make their own business decisions. These decisions include: Where to sell their coffee beans to, whether or not they want to keep up the business practices put in place by Tim Hortons Coffee Partnership, and whether or not they want to continue to improve their quality of coffee. Their social involvement is equally important to creating a sustainable
Starbucks Corporation engages in the purchase, roasting, and sale of whole bean coffees worldwide. It offers brewed coffees, Italian-style espresso beverages, cold blended beverages, various complementary food items, coffee-related accessories and equipment, a selection of premium teas, and a line of compact discs, through its retail stores.
Ponte, Stefano. 2002. “The `Latte Revolution'? Regulation, Markets and Consumption In the Global Coffee Chain.” World Development. 30(7):1099-1122.
According to Starbucks Corporation (2016c), the company has “offered Fairtrade coffee since 2000 and in 2011 34.4 million pounds of Starbucks coffee purchases were certified making the company one of the largest purchasers of Fairtrade certified coffee in the world.” Fairtrade benefits the producer, consumer, and the company.
CEO of Starbucks, Howard Schultz, originally had the idea that Starbucks would have the community/traditional feel in their stores, and still serve high-quality coffee (“Our Heritage” 1). Adding an Italian vibe to the coffee shops, keeping its traditional logo, which is based on a mythical creature, and advertising some of its products in a more “traditional” style accomplished the first goal. For an example, Starbucks recently created a commercial about their Refreshers, which was about cooling someone down in the summer time, with the scenery of Tuscany in the background. Serving high-quality coffee was obtained by ordering coffee beans from where they naturally grow and giving it a perfect roast to give to a customer. It was a marketing strategy that helped Starbucks grow and transform its commodity chain to support gathering more raw materials for a cheaper and more efficient way.
small farmers grow it as a cash crop, a crop that they can sell to try
Starbucks is one of the largest coffee franchises in the world. With over 26,000 stores in 64 countries, the company has the right to brag about this. One of the problems which Starbucks is currently being faced with is the brand being watered down by over expansion and a too diverse product mix. With McDonalds and Dunkin Donuts entering into the specialty coffee market, Starbucks needs to alter the path which it is going in order to remain competitive in this industry.
An article in the Seattle Post, describes the alliance that Starbucks is making to ensure that a sustainable supply of high quality of coffee is produce in Latin America. "Starbucks President and CEO Orin Smith said the alliance is partly his company's effort to pass on the "high price" of a cup of coffee to farmers." (Lee, 2004). He states that the high price enables them to pay the highest price to the farmers. Though the high prices to suppliers can demonstrate that money get to farmers with being diverted. Starbucks overall goal with this alliance is to buy 60 percent of its coffee under the standards agreed upon by 2007. "The agreement reflects the growing power of the premium coffee market and efforts to exploit it for the benefit of small farmers" (Lee, 2004).
Starbucks takes the standards of business conduct very seriously. Starbucks “support(s) the global business ethics policy and provide(s) an overview of some of the legal and ethical standards” (Starbucks Coffee) around the world and in every store they serve their customers. Another important factor is that Sta...
Koehn, N.F., Besharov, M.A., & Miller, K. (2008). Starbucks Coffee Company in the 21st Century. [Case study]. Boston, MA: Harvard Business School Publishing.
Bruss (2001) argues that the company hopes as well to make new investments in new coffee types. Starbucks has recently developed a new type of coffee called green-coffee. These strategies are created with the objective of support Starbucks’ commitment to buy coffee that has grown and processed by suppliers. They meet certain conditions of social, economic and quality standards. In addition to that, the company is paying additional premiums to those vendors who meet the specific requirements that the company wants.
In the developing countries, agriculture is the backbone of the economy, and that is the case in Colombia. Coffee growing is a principal economic activity in Colombia, coffee farming supports other economies, and they include Kenya, Brazil, and Indonesia, among others. Just like other agricultural activities, coffee farming faces many challenges that include the attack by market speculators, fluctuating prices, natural calamities, unfavorable weather, and climate change, to name just but a few. Despite the challenges, coffee has been a key driver for economic development and social change in many economies. The International Coffee Organization, which was established in 1963 controls the global coffee prices and the liberalization of the global
Starbucks is currently the industry leader in specialty coffee. They purchased more high quality coffee beans than anyone else in the world and keep in good standings with the producers to ensure they get the best beans. Getting the best beans is only the first part, Starbucks also has a “closed loop system” that protects the beans from oxygen immediately after roasting to the time of packaging. They did this through their invention of a one-way valve which let the natural gasses escape but keeping oxygen out. This gave them the unique ability to ensure freshness and extended the shelf life to 26 weeks. Starbucks isn’t only about the coffee, it’s also about a place where people can escape to enjoy music, reflect, read, or just chat. It is a total coffee experience. The retail outlet has been responsible for much of Starbucks growth and has contributed substantially to their brand equity.