Starbucks Smelling the Coffee

Miami Herald
April 17, 2004
ALLISON LINN, Associated Press

SEATTLE - The coffee urns at Starbucks Corp. aren't likely to run dry anytime soon, but the company is worried that its brisk growth could create a big problem: finding enough high-quality beans to satisfy demand for its lattes and macchiatos.

The Seattle-based retailer is not only opening more than three stores a day but also planning to more than triple the number it runs -- to 25,000 worldwide.

Willard ''Dub'' Hay, senior vice president, voiced concern that someday there may not be enough ``Starbucks-quality coffee available.''

It's not that Starbucks is using up all of the world's coffee; it says it only buys about 2 percent of the beans produced. But it is a major buyer of high-quality coffee -- and there is much less of that to go around nowadays.

To get the beans it wants, Starbucks has always been willing to pay extra, currently an average of $1.20 per pound, or about twice the market rate, said Ted Lingle, executive director of the Specialty Coffee Association, a trade group. But, as its needs increase, Starbucks is learning that paying more won't guarantee it all the beans it needs.

So, to cut off future problems, it has opened a farmer-support office in Costa Rica, one of the world's biggest coffee producers.

Starbucks hopes eventually to employ a fleet of agronomists who, armed with laptops and four-wheel-drive vehicles, will seek out potential suppliers and help them get their crops up to par.

It also is revamping CAFE Practices, a program that rewards suppliers who make environmental improvements. The fear is that the farms won't be able to continue producing high-quality coffee if they don't reduce agrochemical use, conserve energy and otherwise upgrade how they treat the land the coffee is farmed on.

Starbucks says it also wants fairer treatment, higher pay and access to housing, water and sanitary facilities for farmworkers -- not to mention an end to child labor on coffee farms.

But activists and environmentalists criticize Starbucks over everything from its pervasiveness to its buying practices. While some applaud the company's recent efforts, others rip CAFE Practices for not going far enough.

''What we'd like to see Starbucks do is really use its power to transform the industry,'' said Melissa Schweisguth of Global Exchange, a group that wants Starbucks to buy more coffee under so-called Fair Trade guidelines that promote better wages and working conditions and ask buyers to pay a minimum of $1.26 per pound.

Starbucks says that it is already a large purchaser of Fair Trade coffee but that there isn't enough that meets its standards.

Source: http://www.globalexchange.org/campaigns/fairtrade/coffee/1758.html