Starbucks Corporation CORPORATE SOCIAL RESPONSIBILITY ...

Dairy and Bakery ProductsDairy and bakery products comprise a significant part of ourstore operations. For all of our products, Starbucks upholdsour high standards for quality and ensures our products aresafe for consumption.In response to some stakeholders’ concerns about ourdairy products and our own interest in developing a moresustainable approach to our dairy purchases, we recentlyevaluated the feasibility and implications of converting allcore dairy products – fluid milk, half-and-half, whippingcream, and eggnog – to rBGH-free and changing our defaultmilk standard for our beverages to 2% milk from whole milk.(rBGH is a synthetic growth hormone given to dairy cows toincrease milk production.)In fiscal 2006, we surveyed our current dairy suppliers tounderstand their cost structure and ability to deliver sufficientsupplies of the highest quality certified organic and/or rBGHfreemilk needed for Starbucks operations. We also met withstakeholders and dairy suppliers to discuss and learn moreabout rBGH and options for new products. As a result ofthese efforts, we are able to ensure that 37 percent of the coredairy products in our U.S. company-operated stores wererBGH-free as of January 2007.Stakeholder EngagementIn April 2006, Starbucks hosted stakeholders for a two-day“Dairy Summit.” Our goals in hosting this session were to:• Deepen Starbucks understanding of supply chain costs andperformance related to rBGH-free milk.• Discuss dairy industry innovations and supplier/industrycapabilities as well as the health and nutrition impactsassociated with dairy products.• Build stronger connections to our dairy suppliers.Attendees of this summit included Starbucks partners,representatives from Oregon Physicians for SocialResponsibility, and several of Starbucks dairy suppliers. Inaddition, we met with the National Dairy Council in fiscal2006 to discuss Starbucks existing sustainability programs,including C.A.F.E. Practices, as a first step to introduceand explore how sustainability applies to dairy, as well asconsumer health and wellness. We are in the process ofevaluating and/or rolling out new products as a result of thisdialogue, and intend to continue consulting with many ofthese stakeholders going forward.For more information on Starbucks health and wellnessinitiatives, please see the Health and Wellness section of thisreport beginning on page 49.F U T U R E G O A L SIn fiscal 2007 we plan to:• Require all core dairy products used in ourhandcrafted beverages to be rBGH-free. Thisrequirement initially will take place in our U.S.company-operated stores.• Conduct a market test in our U.S. company-operatedstores and a small group of stores in Canada toassess the feasibility of making 2% milk the defaultfor our beverages.Starbucks has also been investigating options for usingorganic ingredients in some of our bakery products. Ourefforts during fiscal 2006 included test marketing two 100percent organic bakery items in more than 100 companyoperatedStarbucks stores in North America stores, andexploring opportunities to incorporate the use of sustainablewheat into our portfolio of bakery products.P R O D U C T S 32