Beyond the cup. - Starbucks

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STARBUCKS COFFEE SUPPLY CHAINECONOMICTRANSPARENCY*FARMERS/PRODUCERSC.A.F.E. Practices suppliers are asked to provide a copy ofan invoice or receipt for the coffee delivered to the processoror exporter. If the farmer represents a large estate, we alsorequest wage and salary transparency to determine whetherfarm workers are receiving fair compensation for their labor.PROCESSORSFor C.A.F.E. Practices suppliers, evidence must be furnishedindicating payments up and down the supply chain, includingpayments made to farmers, and receipts from exporters.Documentation is also required indicating the costs of processing.Estates are medium- to large-scale farms that typicallyemploy workers to help with harvesting and processing.Estates usually have their own processing facilities on-site.Small farms are typically family-run, growing coffee on lessthan 30 acres (12 hectares) along with other food crops.Small-holder farmers deliver their harvested coffee cropsto a collection point and then sell to an intermediary ora processor. Farmers are self-employed and might hireworkers as well as rely on their families to help duringthe harvest season.Wet mills buy or receive coffee cherries from farmers and processthem by removing the fruit and drying the beans. They are standaloneoperations or integrated facilities on large farms or cooperatives.Some wet mills can handle the dry mill processing on-site. If not,they send the coffee beans to a dry mill for further processing.CooperativesSmall-holder farmers often join cooperatives to achieveeconomies of scale, obtain bargaining power and collaborateon production methods. Cooperatives also serve as processorsand sometimes as exporters. Fair Trade Certified coffee isproduced exclusively by cooperatives.Dry mills buy or receive processed coffee beans directly from farmersor wet mills. Dry mills conduct the final stage when coffee beans arechecked for quality, sorted and graded. Green coffee is then sold tolocal buyers or exporters. A dry mill might be integrated into an exportoperation or included on a large farm or cooperative.*The level of transparency varies depending on supply chain realities. For example, some documentation can only be traced to the cooperative level and not to the end-producer (farmer).Our Integrated Approach toSustainable Coffee ProductionThe world coffee market has historically been susceptibleto price fluctuations, which are linked to global supply anddemand. In 2001, green (unroasted) coffee prices hit a 30-year low, adversely affecting many coffee farmers. Regardlessof market fluctuations, Starbucks has always been committedto purchasing high-quality coffee in a socially responsiblemanner. But when this most recent and dramatic downturnoccurred, we reviewed our entire approach to buying coffeeand adopted a more integrated and sustainable model that isbased on six fundamental principles:• Paying premium prices to help farmers make profitsand support their families• Encouraging participation in C.A.F.E. (Coffee andFarmer Equity) Practices, our social and environmentalguidelines for producing, processing and buying coffee• Purchasing conservation (shade grown) and certifiedcoffees, including organic and Fair Trade Certified • Providing funds for farmers to access credit• Investing in social development projects in coffeeproducing countries• Collaborating with coffee producers globally on coffeequality, production, processing and research throughour team of experts at the Starbucks Coffee AgronomyCompany, located in Costa Rica16OUR WORLD OF PRODUCTS
The value chain that extends from farmer to customer includes coffee growers, farm workers, mill workers, exporters androasters. At every stage our quality standards must be met, as well as our requirement for economic transparency, which helpsto ensure farmers receive equitable prices for their crops.EXPORTERSPrices paid to processors and prices charged to importers mustbe disclosed.Exporters receive or buy green coffee beans from mills, farmersand cooperatives. They contract and arrange for shipment of thegreen coffee and sell the coffee to importers or roasters.STARBUCKS COFFEE COMPANY1 Importer2Starbucks buys green(unroasted) coffee fromexporters, farmers andcooperatives, and occasionallyfrom other importers.RoasterGreen coffee is thentransported to one of ourplants and roasted toStarbucks flavor profiles.Exporters are either independent agents in the supply chain or, inmany cases, have their own wet and dry mill facilities. And somefarms do it all – grow and process the coffee and serve as exporters.The exporter can be a local company or part of a large corporationwith importing offices around the world. Starbucks uses exportersbecause they provide value-added services and reduce risk forboth Starbucks and farmers through services such as qualitymanagement, sampling of coffee, providing pre-crop financing andpreparing documentation of finished coffee for export and delivery.3 Distributor4Roasted coffee is packaged anddistributed to Starbucks stores,grocery stores and foodserviceaccounts, such as universities,hotels and restaurants.RetailerStarbucks sells coffee in morethan 10,000 stores worldwide.Paying Premium PricesThe success of the farmers with whom we do business isintrinsically linked to the sustainability of our business.Our commitment to pay premium prices for high-qualitycoffee underlies all of our relationships with farmers. Payingpremium prices has also helped to stimulate the production ofhigh-quality coffee, and helped farmers increase their incomes,reinvest in their farms and plan for their futures. The visibleimpact of paying higher prices is often referred to as theStarbucks Effect, a phrase coined and used by some of thefarmers and suppliers who sell coffee to Starbucks.“The Starbucks Effect is clearly being felt in Colombia,” saidCarlo Frigerio, president of Carcafé, the Colombian division ofglobal coffee exporter, Volcafé, “and it is putting tremendouspressure on others to do something similar.”In fiscal 2005, Starbucks purchased 312 millionpounds (142 million kilograms) of coffee and paidan average price of $1.28 per pound, which was23 percent higher than the average New York “C”(the worldwide reference used by coffee traders)market price during the same time frame.17OUR WORLD OF PRODUCTS
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Fostering Diversity and InclusionAt
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FOCUSING ON HEALTHCARE AND WELLNESS
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Health and SafetyStarbucks is commi
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Your Feedback MattersIn preparing S
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Beyond the cup. - Starbucks

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