USA: Comment - Starbucks: the friendly face of globalization
Starbucks has announced that it will pay more for ethically and ecologically sound coffee.
Starbucks is taking steps to improve its reputation as an ethical trader on the global coffee market. This is important for Starbucks as it has positioned itself as an experiential and lifestyle choice for the young urban consumer. Although this is a valuable PR exercise, it will also serve to protect Starbucks' supply of luxury coffee.
The international coffee trade has long been a poster child for critics of globalization. There is a major discrepancy between the prices paid for coffee by consumers and the prices paid to the growers, as well as between the living conditions of the two groups. The recent glut in the coffee market, which led to prices slumping by as much as 40%, has exacerbated this situation. Starbucks now plans to pay an extra 10 cents per pound of coffee beans for suppliers that meet its criteria for socially and environmentally responsible behavior.
Last month, Starbucks announced plans to buy a million pounds (lbs) of Fair Trade certified coffee in the next 18 months. Fair Trade coffee growers receive higher prices (GBP1.26 per pound) for their coffee.
These moves by Starbucks reflect concern over the possibility of consumer action against perceived unethical business practices. Starbucks is more at risk from this form of negative publicity than many other multi-national High Street food service retailers, as it has avoided positioning its service as being merely convenient. Instead, it has emphasized the experiential, lifestyle aspects of its offering, and targeted young, urban, active consumers. This consumer segment is more likely to take an interest in current affairs, and the charge of exploitation taints Starbucks' image.
Starbucks' higher prices will be tied to water and energy conversation, recycling, reduced pesticide use and the treatment of workers, including conditions and pay. Critics say that it is unclear how transparent this scheme will be. Concerns have been raised over how it will be monitored, suggesting that Starbucks is hoping to enhance its reputation among consumers for the minimum possible effort.
However, Starbucks points to other reasons for paying a higher price to its suppliers. Although Starbucks purchases total only 1% of the total coffee supply, they comprise 15% of the specialty coffee trade. By paying a higher price now, during difficult times for coffee suppliers, Starbucks hopes to safeguard its suppliers and ensure the stability of its coffee supply over the next four years.
(c) 2001 Datamonitor. All rights reserved. Republication or redistribution, including by framing or similar means, is expressly prohibited without prior written consent. Datamonitor shall not be liable for errors or delays in the content, or for any actions taken in reliance thereon.
I'm not one naturally to side with the hugely rich and influential, but I can't help but feel a twinge of sympathy for those members of the Taittinger clan who wanted to keep the family business. Alas...
The last month has seen the launch of two prestige wines from South Africa, not hitherto a region renowned for super-premium offerings. But if these two take off, Chris Losh expects to see more super-...
A new public relations agency has been appointed for two of Coors Brewing Company's beer brands....
Sweden's state-owned retail monopoly Systembolaget is launching an SEK8m (US$960,000) ad campaign to defend its hold on alcohol sales in the country....
Interbrew UK has poached two marketing managers from rival brewers....
Anheuser-Busch is to follow the US launch of its B(E) beer by rolling out the brand in the UK....
Cobra Beer has announced plans to launch Cobra Lower Cal/Lower Carb in the UK....
Interbrew UK has announced plans to launch a new speciality beer....
- Whatever happened to binge Britain? - comment
- The dangers of squaring up to your competitor
- How to turn a domestic spirit into a global brand
- The US beer market - A level playing field for all
- Remy Cointreau's Q2 and H1 - preview
- Sidney Frank CEO to head Clooney's import co
- Diageo sells off United Spirits' Bouvet Ladubay
- Captain Morgan distillation trial queried by USVI
- Irish whiskey brands could fail without bulk
- Sazerac sues Brown-Forman over Tennessee Fire
- Global Beer Trends 2015 : Global Beer Trends and Long-term Forecasts
- Global sparkling wine insights - market forecasts, product innovation and consumer trends research
- Future growth opportunities for global spirits
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends research
- Global Wine Market to 2019 - Market Size, Development, and Forecasts