Seattle Times Company
February 19, 2000
by Robert T. Nelson, Seattle Times business reporter
Responding quickly to investor concerns, Starbucks has announced the purchase of 75,000 pounds of Guatemalan and Nicaraguan "Fair Trade" coffee from vendors who have certified that the growers received a fair price for their coffee.
"These purchases illustrate our ongoing strong and enduring commitment to improve the lives of people who grow, harvest and process the coffee we purchase," said Mary Williams, Starbucks' senior vice president.
At the company's annual meeting on Monday, several stockholders raised concerns about working conditions and wages on the plantations where Starbucks buys its coffee. The question of when Starbucks would begin purchasing Fair Trade certified coffee was put to Howard Schultz, chairman and CEO, and Orin Smith, president and chief operating officer.
Smith said the company had been taste-testing Fair Trade certified coffee and that as soon as it found one that met Starbucks' standards, it would buy it.
It must have been discovered within the next few sips, because Starbucks announced the purchase late Thursday. And though 75,000 pounds represents a tiny fraction of what Starbucks buys annually, Williams said she is is confident this coffee, purchased from the Nueva Segovia region of Nicaragua and the Atitlan region of Guatemala, will be well-received.
Starbucks' announcement was met with skepticism by officials at Global Exchange, a San Francisco-based human-rights organization that's been trying to embarrass the company into buying coffee from farmer cooperatives instead of vendors who trade coffee grown on large plantations.
Fair Trade certification was started in Europe a decade ago with the intent of fostering smaller growers and better working conditions for coffee and tea growers.
Deborah James, Fair Trade director at Global Exchange, said large growers routinely receive about 50 cents a pound for coffee Starbucks sells for $10. The organization's goal is to bring that price up to at least $1.26 a pound. To be certified as Fair Trade coffee, beans must have been grown on a small farm and sold for at least that amount through a cooperative. The assumption is that by charging that amount of money, farmers can afford to pay pickers a living wage.
"We're happy they have taken the first step toward realizing there is a market for Fair Trade and they have a responsibility to pay people a reasonable wage," said James, who estimates Starbucks buys more than 50 million pounds of coffee annually. "But the announcement comes on the heels of protests against them. We met after Monday's meeting and tried to get them to commit to buying Fair Trade coffee. They wouldn't."
Starbucks officials have stressed that the taste and quality of the coffee is their first consideration. Once that standard is met, officials have said the higher price of the Fair Trade coffee is no object. In its recent annual report, Starbucks outlined efforts to improve basic health, social services and education in the communities where coffee workers live.
Schultz also told stockholders on Monday that he has told the secretary of agriculture in Guatemala that the company may some day stop purchasing coffee grown in that country if working conditions and wages don't improve.
Robert T. Nelson's phone message number is 206-464-2996.