Starbucks--Under Consumer Pressure--Starts
Selling "Fair Trade" Bags of Coffee

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America wakes up to the smell of fair trade coffee
Financial Times (UK)
By Edward Alden
Published: October 4 2000

When Americans go for their morning coffee on Wednesday, they will be able
to appease their social conscience along with their thirst.

Starbucks, which runs the largest chain of coffee houses in the US, has
started selling coffee guaranteed to have been grown without exploiting
farmers in the poor countries that produce most of the world's coffee.

Fair Trade certified coffee - described as a "balanced light-to-medium blend
with complementary acidity and body" - will sell for $11.45 a pound. That is
about $1.50 more than the chain's house coffee, but several dollars less
than its more exotic varieties.

The new blend of conscience and capitalism is the result of strenuous
lobbying by TransFair USA, a non-profit group that provides independent
certification that producers are being paid a decent wage for their
products.

Paul Rice, executive director of TransFair, says the agreement with
Starbucks ensures that Latin American farmers selling beans for Fair Trade
coffee will receive at least $1.26 per pound under long-term contracts. That
compares with recent market prices of as low as 78 cents per pound, of which
the farmers are normally receiving just 20 to 30 cents after middlemen take
a share, he says.

TransFair is hoping American consumers, who are widely seen as being
notoriously indifferent to anything but price, will be willing to pay a
small premium for the comfort of knowing that more of their money is making
its way into the pockets of poor farmers.

"Fair trade is an alternative paradigm to charity," said Mr Rice. "What
we're saying is pay a decent price for an excellent product, and help the
farmers bootstrap their way out of poverty."

The deal with Starbucks represents the first time the fair trade movement
has made serious inroads into the US mass consumer market. Until today, the
fair trade label was limited to a smattering of craft shops and some coffees
sold in Californian grocery stores.

By contrast, European consumers can already buy a range of food products
carrying fair trade labels, including coffee, tea, chocolate, honey and most
recently bananas. European sales of fair trade coffee alone were about $300m
last year, and represented 7 per cent of the UK's ground coffee market.

Seattle-based Starbucks boasts 2,300 outlets, making it by far the largest
premium coffee seller in the US. Gourmet coffees have captured about a third
of the market, in a country where 80 per cent of adults drink coffee.

Starbucks is nearly the perfect candidate for fair trade products, says Mr
Rice, who has worked with coffee co-operatives in Nicaragua that sold to
Cafedirect, Britain's first fair trade brand.

"Coffee was far and away the hottest market we could plug into. It's a
high-growth, high-margin business with a consumer profile nearly identical
to that of socially conscious consumers," he said.

Starbucks has also tried to cultivate a reputation as an enlightened
company. The deal with TransFair "demonstrates our commitment to coffee
producers and their families, communities and the natural environment," said
Dave Olsen, Starbucks' senior vice president, corporate social
responsibility.

It did not hurt that the company unexpectedly found itself on the wrong side
of the anti-globalisation protests that rocked Seattle during the World
Trade Organisation meeting last November. A Starbucks coffee house was
vandalised, and the company was facing further opposition from activists,
who accused it of treating poor farmers unfairly.

Mr Rice is hoping that the Starbucks deal will be the first of many. He has
drawn up marketing plans for chocolate, tea, sugar and bananas, and would
like to get involved in certifying clothing and footware.

"There is a groundswell of consumer interest," he said.
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Fair Trade coffee debuts, but will it perk up sales?

Starbucks starts selling farmer-friendly joe today
By Frank Green
STAFF WRITER
October 4, 2000

One venti, dry, nonfat cappuccino, please. And make it with Fair
Trade-Certified beans.

Starbucks, which had been threatened with protests by human-rights activists
over worker conditions in Third World coffee fields, will begin selling the
farmer-friendly product today at its 80 or so San Diego outlets and more
than 2,000 other U.S. locations.

The new line's packages will feature the logo of TransFair USA, indicating
that growers grew their crop under relatively safe conditions and received a
minimum of $1.26 a pound -- up to 80 cents a pound more than is typically
paid to them by middlemen.

"We're very pleased, although this is just a first step" in getting the U.S.
market percolating with fair-trade products, said TransFair spokeswoman Nina
Luttinger.

Oakland-based TransFair, which certifies fair-trade practices, joined with
human-rights groups like Global Exchange in April to organize demonstrations
at 30 Starbucks stores in the U.S. to force the trendy Seattle-based
retailer to carry some Fair Trade brew.

But three days before the planned protests, the company woke up and smelled
the trouble, said Deborah James of Global Exchange in San Francisco.

"They wouldn't have made the agreement if it wasn't a smart business
decision," she said. "They were worried about public relations."

Starbucks, the nation's biggest gourmet-coffee company, said yesterday that
it is committed to lifting the standard of living of small coffee producers
and their families.

"We remain in collaboration with Global Exchange about other possible
initiatives," said Megan Behrbaum, a Starbucks spokeswoman.

Behrbaum declined to reveal how much Fair Trade coffee the company is buying
in the initial round, or how much it is spending for the politically correct
product.

The brew will be offered in Starbucks stores for at least one year, then a
decision will be made, based on customer demand, about whether or not to
keep it in stock, she said.

Global Exchange estimates that Starbucks has purchased more than 100,000
pounds of Fair Trade-Certified beans.

Yesterday, clerks at area Starbucks stores were preparing to clear the
shelves to make way for the new whole-bean roast, which will sell in
one-pound packages for $11.45.

"We'll occasionally feature it as our (brewed) coffee of the day," said Ruth
Killigrew, manager of a Starbucks outlet in La Jolla.

Starbucks coffee ranges in price from $9.95 a pound for House Blend to
$16.95 a pound for Arabian Mocha Sanani.

Coffee is the second most valuable commodity traded in the world after oil,
with $18 billion in annual sales. About 20 percent of the coffee crop is
sold to the United States.

In 1999, Fair Trade coffee comprised 60 million pounds of the worldwide 13
billion-pound coffee crop, with about 1.5 million pounds sold in the United
States.

TransFair USA and Global Exchange said they chose coffee as the focus of the
economic-justice campaign because of the deplorable conditions in which
coffee growers toil.

Many small coffee farmers typically receive prices for crops that are below
their costs, forcing them into poverty and debt, said Global Exchange's
James, adding that intensive coffee farming can cause deforestation, the
destruction of animal habitats and the use of high levels of pesticides and
chemical fertilizers, among other environmental hazards.

In recent years, the Fair Trade movement has organized 300 cooperatives in
Latin America, Asia and Africa, representing 550,000 farmers and their
families, to help alleviate some of those problems.

"The result has been many farmers who can now feed their families rice and
beans instead of tortillas and salt," James said. "Farmers' children can now
stay in school through the sixth grade."

Moreover, growers who practice organic and sustainable cultivation methods
receive a premium for their product, she said.

But will morning commuters lined up at the corner Starbucks pick the Fair
Trade joe over the Yukon Blend?

"Depends on how the stuff tastes," said a customer waiting to order a tall
latte yesterday afternoon at the Starbucks in Mission Valley. "I'm not going
to pay $2 for a drink that tastes bad."

[ed note: It tastes great!!!!!!!-dj]

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--
Deborah James, Fair Trade Director
Global Exchange
deborah@globalexchange.org
415.558.8682 ext.245
415.255.7498 fax
2017 Mission Street #303, San Francisco, CA 94110
www.globalexchange.org/economy/coffee

Buying Fair Trade Certified coffee is a simple, easy thing you can do on a
daily basis to support fairness for farmers around the world. At least when
it comes to our daily brew, there is finally an independently monitored
alternative to sweatshops that sets a standard for Fair Trade in the global
economy.

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Global Exchange http://www.globalexchange.org