Beyond the cup. - Starbucks

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CASE STUDY: EMPOWERING FARMERS IN EAST TIMOROn the tiny island of East Timor, coffee provides alivelihood for more than 25 percent of the population. Overthe past decade, farmer-owned Cooperativa Café Timor(CCT) has virtually reinvented Timor’s coffee industry,earning farmers five times more than before. Where CCT’s17,600 members once hand-processed inferior, overfermentedbeans for meager-paying local buyers, they nowproduce specialty grades for international markets throughthe co-op’s centralized mills and drying fields.to sustain the co-op’s future. He is therefore interestedin C.A.F.E. Practices, Starbucks coffee buying guidelinesthat reward sustainability with premium prices and thepossibility of long-term contracts. “Starbucks is morecentral to how we’ll grow in the future than foreign aid,Fair Trade or anything else,” he says.Since 1995, Starbucks has consistently bought half ormore of CCT’s coffee and paid at least 30 percent aboveprevailing market rates, even before CCT was admittedto the Fair Trade registry a few years back. Through directgrants and Fair Trade premiums, Starbucks has also helpedfund community development initiatives, such as a ruralwater system and a network of primary health clinics.These centers provide local residents with a defense againstextreme levels of infant and maternal childbirth deaths.Initially backed by U.S. government funding, CCTpursued organic and later Fair Trade certifications to protectmembers against fluctuating markets. But Director SamFiliaci doubts whether these steps alone will be enoughAt the Cooperativa Café Timor in Dili, East Timor, workers rake wet coffee beansacross the drying field.More profiles from the farmers’ perspective are available online atwww.starbucks.com/farmerstories.These steps have helped to stimulate a steady supply of qualityFair Trade Certified coffee, which has enabled Starbucksto create additional Fair Trade Certified products, developnew distribution channels, and locally promote Fair TradeCertified coffees to our customers around the world.As a result of our efforts, in fiscal 2005, we:• Introduced Café Estima Blend, our new Fair TradeCertified offering, in our U.S. and Canada companyoperatedand licensed stores as both whole bean coffee and“Coffee of the Week” every other month.• Provided three Fair Trade Certified coffee blends tocollege and university accounts.• Worked with Costco to offer Fair Trade Certified coffeeblends under its well-established Kirkland Signature brand,which is sold through Costco stores. This has the potentialof becoming one of the largest global distribution channelsfor Fair Trade Certified coffee.• Continued to offer four Fair Trade Certified coffee blendsthrough our Seattle’s Best Coffee® brand.• Continued to be the only company licensed to sell FairTrade Certified coffee in 23 countries.GOING FORWARDStarbucks is committed to purchasing Fair Trade Certified coffee as a way of supporting the network of Fair Traderegistered coffee cooperatives. In addition, Starbucks plans to:• Promote our Fair Trade Certified coffee blends to increasecustomer demand and sales of these products.• Continue to work with regional Fair Trade organizationsto introduce additional Fair Trade Certified coffeeproducts globally.• Urge TransFair USA to be a stronger advocate forfarmer equity by helping to institutionalize economictransparency within the coffee industry.• Continue to encourage Fair Trade producers to embraceC.A.F.E. Practices as another means toward ensuring thesustainability of their businesses.• Strengthen our internal systems so we can ensure FairTrade Certified coffee is consistently available in ourstores to meet our customers’ requests.24OUR WORLD OF PRODUCTS
Certified Organic andConservation (Shade Grown)CoffeesStarbucks purchases certified organic and conservation (shadegrown) coffees. These purchases support the company’s largereffort to preserve the natural environment and/or promoteeconomic stability. (See graphs below for amounts purchased.)Starbucks purchased considerably more certified organiccoffee in fiscal 2005 than in the previous year. Starbucks offerstwo types of certified organic coffee, and Seattle’s Best Coffeesells seven varieties.Our shade grown coffee is purchased through ConservationInternational’s (CI) Conservation Coffee SMprogram, arelationship that began in 1998. Starbucks and CIformed an alliance to encourage farmers to use ecologicallysound growing practices that help protect biodiversity inenvironmentally sensitive areas and stimulate the productionand sale of high-quality coffee grown under the canopyof bird-friendly shade trees.Recently, CI realigned its priorities, focusing more of itsresources on its core mission of protecting biodiversityand strengthening local partnerships in countries withConservation Coffee SMprojects. CI reports that farmersparticipating in the program increasingly recognize theenvironmental value of incorporating Conservation Coffee SMBest Practices, and that through local partnerships they areable to sell coffee to other buyers beyond Starbucks. This isespecially important when Starbucks is unable to purchase allof the coffee produced through this program. Such was thecase in fiscal 2005, when Starbucks received less shade growncoffee through this channel.Santiago Arguello (left), formerly of Conservation International, and Roberto SilvinoHernández of the Comon Yaj Nop Tic coffee cooperative in Chiapas, Mexico, examinethe quality of these shade grown coffee beans. This is the area where StarbucksOrganic Shade Grown Mexico coffee is produced.CI and Starbucks have continued to develop tools and resourcesfor C.A.F.E. Practices, including the Small-holder Supplement,and collaborated to engage the broader coffee industry aroundsustainability efforts through CI’s Center for EnvironmentalLeadership in Business. A progress update on our jointendeavors is available on www.starbucks.com/csrannualreport.ORGANIC AND CONSERVATION (SHADE GROWN) COFFEE PURCHASES Note: Coffees may be certified in more than one category.25OUR WORLD OF PRODUCTS
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Beyond the cup. - Starbucks

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