Starbucks: Fair Trade or “Tradewash”?

Posted by Chris O’Brien

The Organic Consumers Association (OCA) is telling consumers to turn up the heat on Starbucks and pressure them to take Fair Trade more seriously.

According to OCA, many customers mistakenly assume that all Starbucks coffee is fair traded, but in fact just 6% of the company’s coffee is certified Fair Trade.

OCA is asks consumer activists to take these steps:

1) Sign OCA’s 2008 petition to Starbucks demanding that all espresso drinks be both 100% certified Organic and Fair Trade.

2) Make a free call to Starbucks’ Customer Service line and let them know how you feel. (800) 235-2883. Click here for a sample script.

3) Sound off on My Starbucks Idea, Starbucks’ public forum. We have an idea for you Starbucks, its called Fair Trade!

4) Find a non-corporate café near you using the Delocator.

Is the “all Fair Trade espresso” demand impractical or too idealistic? Not really. Dunkin’ Donuts, the world’s largest coffee and baked goods retailer, already does just that. Even McDonald’s sells all Fair Trade coffee in their New England stores and in the U.K.

So what’s up Starbucks? Why not empower farmers by supporting a minimum price per pound and buying from democratic cooperatives?

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38 Responses to Starbucks: Fair Trade or “Tradewash”?

  1. Andrew McDermott says:

    This is typical of the ill-informed activists, who have not established what Starbucks does to assist the coffee industry at source, blinkered by the perception that Fairtrade is an all encompassing solution. The average payment made by Starbucks, per pound of green coffee, is 13 cents higher than the current Fairtrade price, which I believe is $1.28. So your protests are intended to deny funds to coffee farmers, rather than achieve a consistent consolidation of green coffee prices? Even before you stop to notice that Starbucks buys more Fairtrade coffee than any other high street retailer!

  2. beeractivist says:

    Andrew,

    Thanks for commenting. In response I offer the following:

    1. Nowhere in this post do I or OCA claim that Fair Trade is an “all encompassing solution.” This post was not about dissecting Fair Trade. If it was, I would have gone into detail about its many shortcomings. On behalf of the State of California’s Department of General Services, I analyzed and compared eight different coffee sustainability programs, including Fair Trade certified and Starbucks’ C.A.F.E. program. Both fell far short of perfection but Fair Trade surpassed C.A.F.E. by a comfortable margin. When the analysis is finalized, I will publish it here on this blog. The biggest shortcoming of C.A.F.E. is that it is a proprietary corporate standard rather being developed by an open group of stakeholders. And in any case, according to Starbucks own 2007 CSR report, they only source 65% of their coffee from their own C.A.F.E. approved sources. So 35% of their coffee didn’t even meet their own standard for sustainability. And they wrote the standard!

    2. The current FLO mandatory minimum on coffee is $1.31 per pound for conventional beans and $1.51 per pound for organic. About 75% percent of Fair Trade beans are organic. On top of that there is a 10 cent per pound required premium that goes to social investments in producer communities. In other words, most Fair Trade beans are sold for at least $1.61 per pound. Using your math, that means the Fair Trade price is 20 cents higher than what claim is the average Starbucks price to farmers. Suggesting that I want to “deny funds to farmers” by guaranteeing them a minimum price displays your apparent lack of understanding about the fundamental mechanisms involved in Fair Trade. The Fair Trade minimum prices are just that – minimums, not maximums as you suggest. Many buyers pay well above the minimum but support the Fair Trade system because it helps to provide some price stability for farmers. Price stability in turn helps farmers concentrate on improving quality.

    3. I did note that Starbucks buys 6% of their coffee on Fair Trade contracts. You can niggle me for not doing extra math and pointing out that that amounts to a larger volume than any one other buyer, but so what? I know many roasters who buy 100% of their coffee on Fair Trade contracts. Again, Dunkin’ Donuts, McDonalds (and even Wal-Mart – yes, Wal-Mart, the company that boasts about having Always Low Prices) buy a much higher portion of their coffee on Fair Trade contracts. In this light, Starbucks 6% seems measly. And that was the main point made in this post – Starbucks rides the publicity train on the merit of its token support of Fair Trade. And that’s why OCA is asking them to increase their commitment.

    Cheers,
    Chris O’

  3. Hi Chris and Andrew –
    I’d also recommend taking the time to read this excellent article written by Tom Knuds0n and published in the Sacramento Bee: http://www.sacbee.com/502/story/393917.html
    It describes the complexities sourcing coffee, focusing on Starbucks trading practices in Ethiopia.
    As a coffee roaster/retailer and a member of Cooperative Coffees (a fair trade green bean importing co-op) I can tell you there are many factors involved in the negotiation of coffee purchasing, of which price is just one. As Chris O. points out, fair trade should really serve only as a minimum. After spending a great deal of time in coffee growing countries, I think it’s deplorable for anyone to purchase coffee below the fair trade minimum prices. It’s just not enough for farmers to live on.
    One way to think of the fair trade price is like minimum wage in the United States.
    Most buyers (like Cooperative Coffees) who are pushing the envelope of trade justice,
    are not only paying prices far above fair trade minimums we also take into consideration things like cultural issues, transparency, women’s empowerment, access to credit, isolation of the farmers, the political situation of the region and much more when we create relationships with farmers and purchase their coffee.
    Fair trade is simply a spring board to build an even more equitable trading system with producers. With annual profits in the hundreds of millions, I think Starbucks certainly has room to improve their sourcing policies.

  4. Overseas1 says:

    Just a note on Fair Trade, while I am an advocate I do not entirely buy into the anti-Starbucks mentality. While I advocate and encourage Starbucks to invest more into “just” buying one must realise they presently buy into more than 10% of the global output of Fair Trade, significantly more than all it’s North America competitors combined. This realising that most of all N.A coffee is still bought by Proctor and Gambe, Kraft etc. who hardly support any just buying.

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  11. […] Fair Trade. Starbucks has a Fair Trade policy, but it’s not across the board and it’s not an official certification from what I can tell. They’ve improved, buying […]

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