A 2013 Roast Magazine story that discusses transparency in the
specialty coffee market briefly mentions Starbucks:
coffee verified to meet their Coffee and Farmer Equity (C.A.F.E.)
Practices standards, the company says financial transparency "down
to the farmworker level" is a must ... [however], the furthest
Starbucks goes in disclosing financial information is to give an
average purchase price for their green coffee ($2.38 per pound in
2011); they don't report about individual purchases.
inconsistency compelled us to look more closely at Starbucks' sourcing practices. According to Starbucks, transparency is guided by
its Coffee and Farmer Equity (C.A.F.E.) program, which "ensures
coffee quality while promoting social, economic and environmental
standards." Under this model, "economic transparency is required.
Suppliers must submit evidence of payments made throughout the coffee
supply chain to demonstrate how much of the price that we pay for
green coffee gets to the farmer."
in-house certification program yielded the following summary of their
this suggests a small improvement between 2013 and 2014, it does not
reveal how much Starbucks pays for its green coffee. For this, you
have to dig a little deeper to learn that "Starbucks paid an
average price of $1.72 per pound in 2014." According to previous
reports, Starbucks paid an average of $1.92 per pound in 2013, and
$2.56 per pound in 2012. These three numbers, combined with
historical information about what Starbucks charged its (on-line)
customers for its French, Verona, Sumatra and Pike Place coffees in
2012, 2013 and 2014, generate the following graph:
effective share of roasted coffee prices that went to purchasing
green beans -- which probably includes the (unreported) amount that
went to middlemen -- dropped from 23.7% in 2012 to 15.9% in 2014.
Given the total volume of coffee purchased by Starbucks in 2014 (a
reported 461 million pounds), and this two-year green price reduction
of 84 cents per pound, Starbucks seems to have removed more than $387
million from coffee-growing countries over a two year period (unless
the reported green price reduction came from squeezing the
recognize these numbers and calculations might be incomplete because
we do not know how much of the money that Starbucks spends on green
coffee actually goes to growers. This is unfortunate because the
claims associated with the C.A.F.E. program suggest that these
numbers are made available by Starbucks' suppliers -- and, we
would argue, should be disclosed to consumers -- for 96% of the
green coffee purchased in 2014.
also recognize that the price paid for green beans is not the only
way that roasters support coffee farmers. For example, Starbucks
contributed $16.3 million in 2014 to support loans to farmers through
Root Capital (and other partners). However, we should consider that
the economic value of pre-harvest financing to a farmer is increasing
in the price that he or she gets when the coffee is sold. Thus, to
get a complete picture of these other farm-based programs, we must
see the more detailed price numbers (and must see them trending in
the right direction).