Beyond the cup. - Starbucks

Procurement Practices forSustainable AgricultureIn addition to C.A.F.E. Practices for coffee, guidelines are indevelopment for other agricultural products, including cocoaand tea.COCOAChocolate is an important ingredient in Starbucks products.Cocoa is used in some of our coffee beverages and bakeryitems, and the chocolate bars sold in our stores.Worldwide cocoa production for the 2004/2005 crop yearwas 7.2 billion pounds* (3.3 billion kilograms), of whichapproximately 40 percent was produced in the Ivory Coast,West Africa. In fiscal 2005, Starbucks purchased 12.4 millionpounds (5.6 million kilograms) of processed cocoa fromour suppliers.Over the past year, Starbucks Emerging Issues Councildetermined that we needed to address the lack of transparencyrelated to our cocoa purchasing. Reports of human rightsviolations in some African cocoa-producing regions furtherhighlighted a critical need for information and expertise inthis area. As a result, Starbucks engaged external stakeholdersto expand our knowledge of cocoa-related issues and to getfeedback on our future direction. Several significant steps weresubsequently taken to develop our Socially Responsible CocoaSourcing Program.Stakeholder EngagementIn December 2004, Starbucks hosted a gathering ofinternational NGOs, industry experts and USAID (U.S.Agency for International Development) to exchangeinformation and engage openly about the social,environmental and economic issues related to the cocoaindustry and its supply chain. The session was facilitated byBusiness for Social Responsibility (BSR), an independentorganization that consults with companies on corporatesocial responsibility.Since then, Starbucks has been updating forum attendeeson our progress and inviting their additional feedback as wework to strengthen our business practices in this area. A fullreport on this stakeholder discussion, including a list of theparticipants, is online at www.starbucks.com/cocoa.Local cocoa farmers in Africa’s Ivory Coast sort through their harvest of cocoabean pods.and determine their ability to address social issues in thesupply chain, including forced child labor, and to outlinea plan for price transparency to the farmer. A scoringmatrix was used to evaluate and rate vendors on social,environmental and economic criteria.Starbucks selected two companies to work with, including ourexisting supplier. Both suppliers are now working togetherthrough established cocoa cooperatives in the Ivory Coast toensure that the cocoa used in Starbucks products is cultivated,harvested and processed without the use of forced child labor,and that verifiable price transparency can be traced back tococoa farmers.In 2006, Starbucks will begin developing cocoa buyingguidelines, building on our experience with C.A.F.E.Practices. Our goal is to ensure that the cocoa used inour various products is purchased under the guidelines ofStarbucks Socially Responsible Cocoa Sourcing Program.We will share our progress in subsequent CSR Reports.Socially Responsible Cocoa Sourcing ProgramStarbucks assembled an internal cross-functional team torefine our approach for purchasing processed cocoa. InMay 2005, Starbucks issued a Cocoa Sourcing Requestfor Information to six companies, including our existingsupplier. Our objectives were to screen potential suppliers*October 2004–September 2005, LMC International Ltd.,LMC Cocoa Bulletin28OUR WORLD OF PRODUCTS