Case Analysis of Starbucks CorporationCase Analysis of Starbucks CorporationQuestion 1: Why did Starbucks partner with Conservation International to develop C.A.F.E (Coffee And Farmers Equity Practices)?Since 2005, Starbucks has been the worlds largest specialty coffee retailer and it expanded consistently and saw strong growth in the sales and net profits. In the 1990s, the specialty coffee industry experienced enormous growth, fueled largely by the coffee-drinking habits of college graduates and other educated professionals. However, due to oversupply of lower-grade coffee beans, the prices of coffee beans had depressed and which made it difficult for coffee farmers to earn enough revenue to cover the cost of production. By the end of 2005, Starbucks owned more than 10,000 stores and roasted 2.3 percent of the worlds coffee. To support such a high growth rate, Starbucks should ensure a sustainable supply of high-quality coffee beans through well-rounded supply chain to meet companys future success.
Moreover, from a sustainable point of view, Starbucks is facing a tremendous threat – global climate change. The same forests that produce the worlds best coffee and sustain millions of farmers also extract and store vast amounts of carbon dioxide. In fact, when they are destroyed, these forests release dangerous greenhouse gas into our atmosphere.
Consequently, Starbucks partnered with Conservation International to develop C.A.F.E. Practices – a set of environmentally, socially, and economically responsible coffee buying guidelines to drive all Starbucks purchases and support conservation at a new scale. Starbucks decided to use its market power as a way to implement social change within its supply chain through C.A.F.E. Practices. Therefore, C.A.F.E. Practices became a way for Starbucks to ensure a sustainable supply of high quality coffee beans, which was an essential component of Starbucks business.
Question 2: How does Starbucks pay for this program? What are the costs and benefits of CAFÉ to: Starbucks, Starbucks suppliers, producers, and farmers? Is the CAFÉ program sustainable for Starbucks?
Partnered with Conservation International, Starbucks built a set of coffee buying guidelines designed to support coffee buyers and coffee farmers, ensure high quality coffee and promote equitable relationships with farmers, workers, and communities, as well as to protect the environment. It was a way of doing business that was aimed at ensuring sustainability and fairness in the coffee supply chain. How to do these? Starbucks suppliers were expected to meet Social Responsibility criteria and to illustrate economic transparency on the amount of money that was ultimately paid to farmers. Starbucks helped suppliers to cover the costs to submit a C.A.F.E. Practices applications. Moreover, the higher scores suppliers achieve,
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1.1 Coffee and food
To support Starbucks’ eco-friendly coffee, both in terms of food and beverages, there was an annual report that explained many of the principles of sustainability and the relationship between farmers and coffee farmers, and showed various measures of sustainability. The annual report and more details of the process as well as information from other experts and organizations including Greenpeace and other farmers’ rights groups are below.
The first part of the annual report outlines several key principles
A common aspect of all farms are water filtration facilities, like filter beds.
A common aspect of all farms are water filtration facilities, like filter beds. Local communities can work cooperatively with other local communities to get coffee-grade quality coffee, which is what the coffee industry thrives on.
Local communities can work cooperatively with other local communities to get coffee-grade quality coffee, which is what the coffee industry thrives on. To work with farms that are already working in collaboration with other farmers and that are in the process of developing their own coffee farmers, an overall commitment will be made by farmers to implement a set of sustainability practices, such as:
Recognizing and encouraging the value of coffee harvested locally for its nutrition and health benefits, including a reduction in the intake of antibiotics.
Recognizing and encouraging the value of coffee harvested locally for its nutrition and health benefits, including a reduction in the intake of antibiotics. Improving the use of recycled coffee to provide a healthier atmosphere and reduce the use of artificial chemicals.
We have developed a series of strategies to help achieve these goals. In January 2015, Starbucks adopted the same process to produce its coffee, but focused more on the coffee trade. In May 2014, more than 90% of the coffee from all over the world became coffee and coffee farmers used all their water resources to produce and sell coffee that is as good for farmers as it is for consumers. Starbucks has long pledged to follow.
The sustainability statement also lists a list of key criteria that all Starbucks customers must agree to comply with before purchasing any coffee locally. This may include:
Evaluation of how customers use the water and nutrients that they have consumed on a daily basis.
How customers use the water and nutrients that they have consumed on a daily basis. Consider alternatives to water sources like grass and coffee.
Proportions of the water users they consider to be most in need and also the resources they use on a daily basis. How far they are comfortable with the choice of coffee to use from.
The coffee and nutrient quality of every single ingredient they buy.
And remember: this is just a list. Starbucks is responsible for the entire coffee consumption in the world at any given time without regard to location or size.
Cultivation strategies
There are three strategies involved in planting green beans in the coffee industry: