All Starbucks UK coffee to be Fairtrade, or: when you can’t beat ‘em, guilt ‘em
Posted by TheShot on 26 Nov 2008 | Tagged as: Beans, Fair Trade, Starbucks
As Starbucks‘ future looks ever bleaker and bleaker, CEO Howard Schultz continues his maniacal lever-pulling atop Starbucks’ runaway corporate bulldozer. After shedding themselves of music, movies, and books, they’ve tried everything from an online suggestion box and free coffee promotions to membership cards to less expensive (“daily”) roasts and smoothies. Mr. Schultz’s latest lever pull du jour seems to be coffee ethics, as this week Starbucks announced plans to source Fair Trade beans for all the espresso drinks they serve in the UK by the end of 2009: All Starbucks’ coffee to be Fairtrade – News, Food & Drink – The Independent.
This is hardly a new angle. Nearly two years ago, we wrote about McDonald’s announcement that they would source Rainforest Alliance coffee in the UK to ethically one-up Starbucks. But it was only less than a month ago that Starbucks announced that they were committed to doubling their sourcing of Fair Trade beans — albeit from less than 4% of their total coffee purchases to a whopping 6%. That makes this week’s announcement for the UK market appear to be a rapid escalation in retail coffee’s ethics wars.
The British already appear to be viewing Starbucks’ “100% Fair Trade” announcement with a surprising degree of suspicion and cynicism. And although Starbucks stated that they ultimately want to switch to 100% Fair Trade beans around the world, they would be far from the first of the major chains to do so in America. Tully’s Coffee, for example, switched to 100% Fair Trade beans over a year ago. Looking at Tully’s recent earnings statements, the move clearly hasn’t hurt Tully’s growth. But it’s hard to say if such a strategy will help pull Starbucks out of their retail funk, given that Tully’s is far from the only major coffee chain that is profiting this year while Starbucks ails.
The bigger question for us, as always, regards the legitimacy of Fair Trade and what Starbucks’ actions do to its public perception. Despite intentions, Fair Trade falls short of its goals on many levels — many of them publicized by Intelligentsia‘s rather public break-up with TransFair USA in 2006. An even bigger concern is how Fair Trade is being given an undeserved monopoly status on ethical sourcing. This issue was recently best described by Sam Mogannam, a good-friend-of-a-good-friend and owner of the Mission‘s Bi-Rite Market, at August’s “Building a Slow Food Nation” panel discussion (which was held at the the Commonwealth Club for Slow Food Nation ’08):
Anya [to Anya Fernald, Executive Director of Slow Food Nation '08], you were talking about labels: fair-trade, organic. As important as they are, those labels were designed for the big box stores — so when you walk into a supermarket and you see an organic or a fair-trade label, you have some sense of provenance, some sense of pedigree, for those products. But there are many products that don’t have a certified organic label on them that go way beyond what an organic grower does.
9 Comments »
Interesting observations. I’ve been mulling a big sorta-expose piece on Fair Trade coffee for some time now, and there’s a lot of fodder in the UK feedback on Starbucks’ move.
On a different note, Greg, can you fire off an email to me at coffeekid over at gmail?
That would be a great developement in the history of coffee industry. Everybode knows that the working conditions in South America are very bad. With this decision Starbucks has a huge impact on improve the bad working conditions.
@Herdschutzgitter, that’s not entirely as slam-dunk obvious as some would have you believe. Fair Trade has clearly improved the living conditions and working conditions in a number of communities. But that’s hardly been universal. Not to mention all the non-certified growers who are left out of the whole program: i.e., those who cannot afford the thousands of dollars every year in certification fees, those who don’t want to have their wages determined by a cooperative, etc.
This says nothing of those who point out how FT creates an unsustainable and artificial economic system where farmers are given no incentives to grow better coffee, etc.
[...] I like Starbucks. There, I said it. I’m sure Steve will be spiking my next coffee order and I’ll have to start sleeping with my eyes open, but there is no denying the truth. In my defense, however, it is not for the reasons you may think. I’m not a slave to the corporate machine, I’m not a caffeine junkie, I don’t like huge sizes and I certainly don’t want a shot of vanilla and whipped cream in my cappuccino. The many faults of Starbucks, which have been flogged to death all over the web, are superfluous to my reasons. I want to focus on a few changes over the last year and whether or not they are nothing more than marketing ploys; the introduction of the ‘Pike Place Roast’ in the USA and the switching to Fair Trade in the UK. [...]
Starbucks made the mistake of thinking that American style coffee would dictate what coffee drinkers around the world would adopt.
Unlike McDonalds, certain parts of the world had already been introduced to coffee and more often than not, the European notion of coffee beverages.
It seems that starbucks took a while to adopt (some) ethical standards.
Australian coffee enthusiasts did not receive their coffee (quality) very warmly. I think that the customers that frequented starbucks in oz where new-comers to espresso coffee in general. I was awfully surprised when I learned that their smallest cup size was called “tall”. The extra mild taste didn’t impress the Australian consumers who are more aquainted with the Italian style (and much stronger) coffee.
On a different note, in the above comment you mention that fair trade does little to promote or incentive quality coffee. The same can be said for “slave” coffee where the main objective is to create a profit. I agree that the current model leaves out a lot of honest farmers and this should be improved. But it is a start and being such a significant international commodity, I think it is important to create awareness of the conditions endured by people involved in the coffee making process. It is ironic that the best coffee from around the world comes from third world countries.
If starbucks was so worried about being a good social citizen they could start with focussing on the rights and conditions they give to their staff in the US. It seems they have embarked on anti-union efforts which do nothing more than disappoint consumers. So much money being generated and so little gratitude for the workforce that facilitate the creation of this wealth?
Starbucks closed 61 stores in Australia last year. If they do decide to come back one day, I hope they spend some r&d time on the Australian market and try to cater for the standards that were in place here long before they showed up.
Union-busting is never a pretty sight. Yet at least in America, you have to question the collective value of unionization for business, customer, and worker in looking at how the examples have played out for the likes of GM, Chrysler, etc.
But to suggest that Starbucks hasn’t done anything for their workers would also be unfair. They’ve offered health care benefits for thousands of employees in the U.S. who would not have such access at an equivalent job working for a similar company.
What almost bothers me more are customers who insist on good pay for coffee farmers, health insurance for company employees, etc., but then who show no willingness to pay extra for their cup of coffee to afford all these benefits. It’s one thing to complain about the high prices at a coffee shop. It’s another thing to complain that the coffee shop doesn’t pay Fair Trade prices or doesn’t offer their employees health dare benefits or a living wage. But to complain about both things makes the consumer part of the problem.
The consumer has the power to change things and influence how organizations do business. I think it is true that consumers are part of the problem.
These days, great margins can be gained from selling brewed coffee. The product is cheap and the sale is expensive although not too expensive. I don’t mind at all if I have to pay more money to see the staff of the cafe smile (genuinely smile) because they are getting a piece of the pie and that the people in Asia, Africa or South America can live with dignity. Sadly, not everyone feels this way, yet.
I’m glad you informed me of the benefits US starcuck’s staff are entitled to. In Australia, it is not the norm that companies pay for health plans. Here the government takes care of that or citizens who can afford it, purchase plans on their own. Two capitalist counties, different benefits given by government and private sector.
A normal cappucino/flat white or cafe latte here in Australia costs about $3.30 which is about $2.65 USD.
I know this is rather late but I got here from a newer link on your blog.
What do you know about the industry? You’re a guy who obsessively visits cafes and blogs about your experience at them. That’s it. You’re good at that part but you fail at the rest. Your supposed analysis of the industry is full of uninformed conjecture and on occasion, flat-out lies. Stick to what you do best-visiting cafes. Lay off the industry analysis because it makes you look like a complete idiot in the eyes of us who are in the business.
Prime example: Tully’s move to do 100% FTO espresso was engineered by a forward-thinking creative and production team that also started projects like using the eco-tainer cups, reducing energy costs in their stores through efficient lighting, and recycling/composting. That team and some top brass flew the coop when some unfortunate dealings around the IPO along with bad board decisions screwed them over. Tully’s no longer offers FTO espresso. Why? The company was taken over by a highly conservative franchisee who thought that a returned to flavored frappes was the way to go. Then the Green Mountain acquisition happened.
The claim that “Fair Trade is being given an undeserved monopoly status on ethical sourcing” is laughable. Apparently you don’t count Rainforest Alliance, Utz, IMO, IFAT, direct traders, Fair Trade Foundation, or the others as being “competition” for Fair Trade’s “monompoly.”
Any “industry” does not exist without its consumers. You’d all be out of a job if not for us. And so-called “industry people” spend billions of dollars every year to influence what we consumers see, think, feel, experience, and believe — through advertising, public relations, branding investments, public information campaigns, events, etc.
So when we say that “Fair Trade is being given an undeserved monopoly status on ethical sourcing”, we’re speaking from a consumers’ perspective. Because that is the perspective of many consumers we have come across — i.e., that if it doesn’t say “Fair Trade”, it therefore must be “evil.” We have too many examples to reasonably/rationally itemize for you here.
You can choose not to see that. You can lead yourself to believe that what the “industry” knows matters only — and what the consumers who pay your salary believe is meaningless and inconsequential to you. Dismiss your customers as ignorant morons, if you wish. Particularly if they are too clueless to recognize the existence of, and similarities with, “Rainforest Alliance, Utz, IMO, IFAT, direct traders, Fair Trade Foundation,” etc. That’s your prerogative.
But ignore your customers’ beliefs at your own peril. That calls into question just how capable you are as a successful businessperson in the “industry”.