Cost of coffee.indd - RISC

actionpage: press release
Statement by Cafédirect and Costa – 26 February 2002
cafedirect welcomes starbucks to ethical business world
Following the announcement by Starbucks today (Tuesday 26 February 2002) to provide
Fairtrade coffee in its UK stores, Cafédirect – the pioneer of the Fairtrade movement – believes
the move to be “a positive step forward for ethical business”.
Penny Newman, Cafédirect’s managing director, says: “This will hopefully be good news for the
Starbuck coffee growers who, until now, have not had a firm guarantee of a fair deal.
“We hope this is the start of a wave of initiatives, particularly in the UK, by other major multinational
coffee companies, who dominate the coffee market, in giving something significant
back to farming communities in developing countries. It is a question of magnitude and scale.
While these companies may conduct some cause related marketing, they rarely commit to real
action which is relative to their earnings and their market size and while this announcement is
a starting point, it is not a significant offering relative to the resources and earnings enjoyed by
Starbucks.”
Newman cautioned consumers to be vigilant against coffee companies, which may pose
as new recruits to the Fairtrade movement, with the sole intention of piggy-backing on its
burgeoning success and appeal. “Some companies may be paying lip-service by offering
Fairtrade prices but have little or no intention of providing continuous, long-term sustainable
support and development to poverty-stricken coffee growing communities across the globe,”
says Newman.
To put things into context, Starbucks announced at the end of last year that it is committed to
buy more than 454 metric tonnes of Fairtrade coffee for all its US-owned stores for the next
12 to18 months. If all this coffee was Arabica, this would represent 1.5% at most of their
annual purchases of green coffee (Source: Starbucks Annual Report Fiscal 2000). However,
compare this to Cafédirect, the 100% Fairtrade organisation, where purchases of Fairtrade
coffee for the year ending 31 March 2001 amounted to 300% more (ie 1,374 metric tonnes).
Furthermore, Cafédirect operates a ‘Gold Standard’ model, whereby growers always receive
‘above market’ prices for their produce and, equally importantly, continuous support to develop
and build businesses and communities in developing countries.
“It’s a stark reality but some use Fairtrade as an opportunistic, short-term marketing stunt to
sell more coffee in the light of increasing pressure. The fact is that it begs a far wider question
of ethical practices and corporate responsibility and, to date, few companies have taken
measurable actions, which would deeply affect their corporate policy or bottom line profits.
Nevertheless, we hope that Starbucks will prove to honour the principals of Fairtrade and to
commit to their coffee growers by offering a sustainable and fair deal over the long-term,” she
continues.
Until now, Costa was the only UK coffee chain to serve Fairtrade coffees and teas (supplied
by Cafédirect). Costa’s commitment to support small-scale producers was demonstrated two
years ago with the launch of Fairtrade products in the 272 Costa stores in the UK. By working
in partnership with Cafédirect, Costa offers its consumers a Fairtrade coffee option, which
can be used for any of its espresso-based coffees (lattes, cappuccinos, etc). Teadirect is also
the exclusive choice for consumers who order tea at Costa. Since November 2000, Costa has
served more than a total of 4.5 million cups of Fairtrade espresso-based coffees and teas. This
is equal to an average of 75,000 cups of Cafédirect Fairtrade drinks every single week.
As a response of the increasing interest in Fairtrade, Cafédirect is calling for the leading
universities and key business organisations to come up with a more precise definition of the
term ‘corporate responsibility’ so that less accountable companies will be weeded out. As
one of the best known and most successful ethical companies and in response to the growing
demand, Cafédirect plans to establish stronger links with business schools and universities
to promote the Fairtrade business model and offer the next generation of business leaders the
45