We Get Letters v. 22: Starbucks Responds to Fair Trade

Again, not so much an e-mail, than a comment left on a post.

Dan, from Starbucks, left the following comment on this article talking about my experiences taking the Starbucks Challenge:

Author: dan [Visitor]
Type: comment
IP address:

couple questions. 1. do we all hate Starbucks because there so big? Cause i live in seattle and vaguely remember when there was 5 stores total. 2. because there a business who makes money? I’m just curious. I do wonder though when it comes to “Fair Trade” does anyone know what it truly means? I did some research and there is no room for little farmers in that organization. I also looked up Starbucks who has there own set of rules of buying coffee, and low and behold last year paid higher prices for most of their coffee then Fair Trade had set. I think it’s time to stop kicking Starbucks because they have done something right. just my thoughts…

To answer your questions Dan, I don’t think everyone hates Starbucks. Their sales figures and growth are fairly indicative of their popularity. I’m surprised you don’t know that considering the information provided to you at your work place.

As for your second question…I presume you meant that as “Do we all hate Starbucks because they are a business who makes money?”

Personally I don’t begrudge any company or corporation who makes money as long as they:

  1. Ensure the sustainability of resources required to make their products and the environment in which the resources are acquired.
  2. Ensure the health and/or well being of the producers of their products by providing a living wage and health coverage (if health coverage is not covered by the State).
  3. Ensure the well being of their consumers by providing a product that brings some level of satisfaction.
  4. Do not do anything that would betray the consumer’s trust of their product.

So, how do these standards apply to Starbucks and Fair Trade Coffee? Well first one should know the what Fair Trade Coffee is supposed to do. I realize that as you work for Starbucks, you probably have a good amount of familiarity with the issue, but for those who don’t, here’s a quick definition.

Fair Trade certification guarantees that a minimum price* of $1.26 per pound ($1.41 per pound for organic) was paid to the farmer cooperative that produced the coffee. Certification also requires criteria be met by coffee cooperatives, including fair labor conditions, freedom of association and certain environmental standards. To be certified as Fair Trade, the coffee can only be grown by small-holder farmers who belong to farmer-owned, democratically run coffee cooperatives listed on the Fair Trade registry. An estimated three percent of the world’s coffee farmers participate in the Fair Trade system.

The phrase “the coffee can only be grown by small-holder farmers who belong to farmer-owned, democratically run coffee cooperatives listed on the Fair Trade registry.” runs contrary to your own statement that “there is no room for little farmers in that organization.” This surprises me that you do not know this, as the above definition comes from Starbuck’s own Corporate Social Responsibility 2005 Annual Report (.pdf file).

But back to the main point: Why do people hate Starbucks? Again, hate is a strong word, but I suppose some people are uncomfortable with how Starbucks treats the Fair Trade coffees at the various worldwide locations. One of the reasons is that only 3.5% of their coffee purchases were from the Fair Trade producers. The rest (or 96.5% if you will) come from distributors, some of whom provide economic transparency, and some (to the tune of 41%) who do not.

For those of you playing at home “Economic transparency” is a business practice that requires entities to provide information on who gets what moneys throughout the wholesale transaction of commodities. It’s one way to see how much middle men are paying the coffee farmers.

This 3.5% conflicts with what Greg Wendt has reported when a couple Starbucks reps claimed in a speech at the SRI in the Rockies conference last September that all of Starbucks coffee is fairly traded. Note the wording there to muddy the waters surrounding “Fair Trade” Coffee, because this is key on why some people are uncomfortable with Starbucks.

The Second aspect is that it’s so damn hard to order Fair Trade Coffee at the various locations. If you ask for Fair Trade, and it’s not their brew of the week/day, they’ll tell you so. If you ask again, they’ll tell you it will take 5-10 minutes to provide a French Press version of the brew.

This part is important as their responses give the impression that they are trying to dissuade a customer from ordering Fair Trade Coffee. Even Starbucks themselves admitted that there’s been a problem in communicating Fair Trade availability to their stores. It is this behavior that lead to the Starbucks Challenges of the fall and winter of 2005-2006.

There is no doubt the Starbucks would enjoy the popular PR buzz claiming that they are eco and farmer friendly. In some aspects of their business, they are. But all too often they take credit for good deeds yet to be done, while elsewhere in their corporation there are entities putting the advancements that have been made at risk.

Dan, this is why some people have problems with your company. Remember that list of four items up above? Starbucks has partial problems with #2 and definitive problems with #4. Somehow, they need to address these issues. They are certainly saying the right things. Now all they need is to do them. Only then will they earn most people’s trust.

Finally Dan, please note that when you leave a comment on this site, I get a copy of it in my e-mail. This e-mail tells me that although you did not provide a Starbucks e-mail address in the comments, the IP address from which the comment originated indicates that you wrote the comment from a computer address at the Starbucks headquarters, indicating that you work for the company. Don’t you think this tidbit of information would be important to know for those folks reading that thread? While I applaud you for your loyalty and sticking up for the company you work for, I have to shake my finger at you for not disclosing your ties to Starbucks.

Tsk Tsk.

(NOTE: Many thanks to City Hippy and Green LA Girl for all of their work on the Starbucks Challenge, and for trying to keep the mermaid honest.)

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