Starbucks: Fair Trade or “Tradewash”?

August 1, 2008

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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600 Stars Bucked: Starbucks to Close 600 Stores

July 1, 2008

By Chris O’Brien

600 Stars Bucked

According to Bloomberg.com, Starbucks will close 600 stores within the next nine months and eliminate 12,000 jobs. For some perspective, that’s about 7% of its global workforce. At the end of March 2008, the company boasted 16,226 stores -just over halfway to CEO Howard Schultz’ stated goal of 30,000 outlets.

The company says most of the stores slated for shuddering are near other Starbucks locations. So, maybe opening two or three Starbucks on a block isn’t such a great business plan after all? Or is it actually a very sly strategy designed to bully smaller competitors out of business?

Starbucks Chief Financial Officer Peter Bocian admits that the stores targeted for closure were cannibalizing 25-30% of the sales of other nearby locations. But here’s the kicker. Starbucks stocks rose 4.5% immediately after the announcement.

Follow the logic here. Starbucks opens stores that it can’t afford and then closes them and gets a boost on Wall Street. Meanwhile, local competitors are put out of business while Starbucks carries the unprofitable stores. Once competitors are closed, Starbucks closes its redundant stores. That leaves the other one or two nearby Starbucks perfectly positioned to not just regain the customers from the other Starbucks but also to gain all the customers from the closed down competitor.

Maybe I’m just paranoid. Or maybe a company aiming for 30,000 stores is a beast that someone needs to slay.


Corporate Coffee Responsibility Ratings

June 25, 2008

Posted by Chris O’Brien

Co-op America (my former employer of nearly seven years) runs a program called Responsible Shopper that provides corporate social responsibility news and ratings about companies and whole industries. Here are their comparative ratings of the biggest coffee companies.

Co-op America\'s Resposnible Shopper Coffee Scores

Notice in the small print that the color scheme ranges from green to yellow to orange to red in descending order of ‘responsibleness.’ Now notice that none of the biggest companies in the coffee industry earn a yellow score or better. Kraft and Starbucks fall in the orange sector while Sara Lee, Proctor and Gamble, and Nestle all deserve the red zone of corporate malfeasance.

Co-op America’s conclusion for how to be a ‘Responsible Shopper?’ Buy fair trade, organic, shade grown coffee.


Talking Trash about Coffee

May 16, 2008

Compostable

Posted by Chris O’Brien

An article in the Seattle Times this past Wednesday claims that Starbucks’ vice president of corporate social responsibility “knows it’s an issue” that the company’s coffee cups are single-use disposable trash that can’t be recycled.

The company’s 2.5 billion paper cups used in North American stores last year contain 10% post consumer waste (PCW) recycled fiber content, and the cup sleeves contain 60% PCW content; both attributes are improvements considering that the cups used to be 100% virgin and “double-cupping” was a common wasteful practice that was mostly made obsolete by the sleeves.

But the cups are still lined with plastic, and that makes them non-recyclable. There are new coffee cups on the market, like the ecotainer (which I wrote about here), that replace that plastic lining with a starch-based material, which makes them compostable. But a compostable cup does not compost make. Just like a ‘recyclable’ aluminum can has to actually be recycled in order to gain the benefit of its recycability, so a compostable cup needs to enter a composting system in order to realize its environmental advantages. That’s a bit of a challenge since composting infrastructure is fairly limited in the U.S.

However, it is certainly possible to arrange composting services independently, and there is a growing number of compostable products: food serviceware, garbage liners, and packaging products. The Biodegradable Products Institute website lists all the companies with products that meet the BPI standard for compostability. Only products that meet these standards are allowed to display the BPI logo (seen here at top). Composting is a heady matter, requiring specific conditions regarding light, temperature and moisture. In other words, simply tossing a cup in landfill and waiting decades or centuries for it to degrade doesn’t count.

Bottoms Up!My prediction is that government will eventually provide composting services the same way it now offers recycling services in many places. Meanwhile, I like the approach taken by Higher Grounds (my co-bloggers here at BeanActivist). They simply don’t offer disposable cups. Instead, if you forget to bring your own reusable mug, they’ll give you one! That’s right, they’ll give you a ceramic mug to takeaway. How can they afford that? Simple answer: craigslist. They post want ads for free coffee mugs on craigslist. Imagine all the tacky, unloved mugs stuffing cupboards across America, like that “bottoms-up” mug you received at your bachelor party from your high school buddy. Now imagine someone who is willing to take them away from you for free and put them to good use. It’s simply brilliant.

Don’t expect Starbucks to attempt this novel approach any time soon. They are currently experimenting with the compostable variety so we’ll have to see what happens.


Third Wavers, Decommodification of Coffee

November 11, 2007

posted by Jody Treter

There is a new generation of specialty coffee roasters, baristas and enthusiasts who are undeniably leading the revolution of the coffee industry these days. This culture of coffee afficianados is often referred to as the “Third Wave of Coffee”. The notion of the “Third Wave of Coffee” was coined by Trish Skeie in March of 2005 during an interview on NPR’s All Things Considered, which aired from the United States National Barista Championships in Seattle.

Trish has been a student of the coffee industry for twenty years and currently serves in the industry as ‘Director of Coffee’ at Zoka Coffee Roaster & Tea Co. based in Seattle, Washington. (note – Zoka was just named “Macro Roaster of the Year” by Roast Magazine).

Her theory goes like this. The “First Wave of Coffee” was the post-World War II era, a time when coffee was simply consumed, not enjoyed. The war forced the production of quick, easy foods and instant coffee reigned supreme. The “Second Wave of Coffee” started in the late 1960’s with the birth of companies like Pete’s and then Starbucks. Specialty grade Arabica coffees began replacing lower grade Robustas as cutting-edge roasters and baristas gained appreciation for the nuances of different roasts and origins.

Fast forward to 2007 and we find ourselves here in the “Third Wave of Coffee”. According to Trish, it’s the evolution of coffee drinkers toward a deeper appreciation for the uniqueness of different coffees. Today it is quite common for customers to ask for a certain country of origin (Ethiopian, Sumtran, etc) when ordering their coffee. Here at our Coffee Bar, many of our customers know the name of the farming co-op that grows their favorite coffee along with the roast profile and other unique attributes of the bean.

Speciatly roasters around the country have become skilled at evoking favorable characteristics of beans and bartistas have become artists at pouring and brewing. These are “The Third Wavers”.

But, what has the “Third Wave” done for small-scale coffee producers and the trading of coffee as a whole? This question gets at the very essence of why we (Higher Grounds Trading Co.) are in business today.

When we started Higher Grounds TC we didn’t know anything about this theory of the “Third Wave of Coffee”. What we knew, after spending many months in Chiapas, Mexico in 2001 and 2002 witnessing one of the most dramatic falls of world coffee prices ever, is that the small scale coffee farmers weren’t making it. In the third quarter of 2001, Starbucks celebrated a remarkable increase in profits to the tune of 34%. In Chiapas Mexico, some 30,000 people (mostly of indigenous decent) were preparing to leave their homes in search of work in Mexico City or the United States. A study by Luis Navarro from the Interhemispheric Resource Center indicates that the coffee crisis was driving this mass emigration.

Whether or not you buy into Trish’s theory of the “Third Wave” of coffee, the Specialty coffee industry is in a process of change. In terms of trading practices, one laudable step in this evolution has been the “decommodification” of coffee. Rather than pegging prices to a wildly fluctuating world market, buyers are going direct to the source (farming co-ops and/or plantations) and setting prices based on quality of coffee, cost of living, etc .

It is clear that many farmers are finally getting the respect and dignity they deserve; roasters are getting the excellent beans and knowledge they seek; consumers are reaping the benefits in the final cup. In terms of impact, there is much to be learned about (and from) the players in the burgeoning Specialty Coffee industry. With regard to trade practice and company policy, what benchmarks are worth emulating that will benefit the farmers over the long term?

If you want to delve a bit deeper into coffee pricing, check out the New York Board of Trade Coffee Price Charts (data from 1970 – today). It’s based on one hundred pounds so simply divide the number you see to the right by 10. For example, 120.00 is actually $1.20/lb. Remember, these prices are the market rates. These are not the prices coffee farmers are receiving. Note that the real prices in the 70s reached almost $3.00/lb. A good price these days is $1.20.


Starbucks Goes rBST Free

November 6, 2007

frankenbucksAccording to a Sept. 4th Reuters story, Starbucks pledged to rid their 5,600 stores of milk containing Monsanto’s recombinant bovine somatotropin (rBST), i.e. the bovine growth hormones used to stimulate hyper-production of milk in dairy cows.

The drug has been a target of consumer advocates like the Organic Consumers Association (OCA) for years. OCA has also called on Starbucks to make more of their coffee and chocolate Fair Trade certified.


Climate Change Score Card for Coffee Companies

November 3, 2007

My colleagues at Climate Counts have rated the big food products companies and food service providers, including many companies providing coffee, on how well they are addressing their impact on global warming.

The scorecard covers four areas: 1) whether the company has conducted a review of their own contributions to warming; 2) what they’ve done to reduce their impact; 3) whether they have a helpful policy stance on climate change; and 4) whether they report to the public on their impact and initiatives.

food scorecard
Scorecard for food service

Sometime, we’ll do a blog post that shows the company-brand ownership structure of the major coffee companies so you can tell which big name corporation (like some of the above) goes with which coffee brand.