Beyond the cup. - Starbucks

Starbucks and Fair TradeStarbucks and the Fair Trade movement share a commongoal: to help ensure that farmers receive a fair price for theircoffee and strengthen their farms for the future. We also focuson cultivating long-term, stable relationships with farmers,providing supplemental funding through social premiums,and providing them access to affordable credit.In fiscal 2005, Starbucks exceeded the 10 million pound(4.5 million kilogram) goal we had previously set withpurchases of 11.5 millions pounds (5.2 million kilograms) ofFair Trade Certified coffee. This represents approximately10 percent of global Fair Trade Certified coffee imports.Twenty-one percent of the Fair Trade Certified coffeeimported into the U.S. in fiscal 2005 was purchased byStarbucks, making us the largest purchaser of Fair TradeCertified coffee in North America.FUTURE GOALIn fiscal 2006, Starbucks plans to increase sales ofour newly introduced Fair Trade product offerings andpurchase 12 million pounds (5.4 million kilograms) ofFair Trade Certified coffee.What Is Fair Trade Certified Coffee?Fair Trade certification guarantees that a minimumprice* of $1.26 per pound ($1.41 per pound fororganic) was paid to the farmer cooperative thatproduced the coffee. Certification also requirescriteria be met by coffee cooperatives, including fairlabor conditions, freedom of association and certainenvironmental standards. To be certified as Fair Trade,the coffee can only be grown by small-holder farmerswho belong to farmer-owned, democratically runcoffee cooperatives listed on the Fair Trade registry. Anestimated three percent of the world’s coffee farmersparticipate in the Fair Trade system.* These established prices set by the Fairtrade Labelling OrganizationsInternational include $1.19–$1.21 for the coffee (depending on the region),$0.05 for a social premium and an additional $0.15 premium for organic.When “C” market prices rise, Fair Trade prices are adjusted accordinglyto be at least $0.05 above the “C” price. According to TransFair USA,approximately 70 percent of the price paid to the Fair Trade registeredcooperatives goes to coffee farmers, and the rest goes to operational andoverhead costs. EXPANDING OUR COMMITMENT TO FAIR TRADECERTIFIED COFFEEOur first relationship with a Fair Trade licensing organizationbegan in April 2000, when we established an agreement withTransFair USA that allowed Starbucks to purchase, roastand sell Fair Trade Certified coffee. Every year since, wehave increased our purchases of Fair Trade Certified coffeeand worked to strengthen our relationships with Fair Tradeproducers and licensing organizations around the world.When Starbucks purchases Fair Trade Certified coffee, weare assured by the Fair Trade organizations that it was grownby small-holder coffee farmers, purchased for a set price viaregistered Fair Trade cooperatives, and that certain social andenvironmental standards were upheld. The price we pay forFair Trade Certified coffee includes a social premium, whichtotaled approximately $575,000 in fiscal 2005. The Fair Tradeco-ops we purchased from used these funds for communityimprovements, such as local schools and health clinics.We have also helped to empower Fair Trade producersby providing them with technical assistance needed toimprove the quality of their coffee; sharing best practices onsustainability and business operations; and funding severalnonprofit organizations that provide Fair Trade registeredcooperatives with pre-harvest financing credit. (See page 26.)23OUR WORLD OF PRODUCTS