Wake up and smell the coffee (Episode Two)

In their effort to promote sustainable coffe plantations and fair payment to farmers, Starbucks formed an alliance with a nonprofit organization called Conservation International (which you will find sometimes mentioned as CI). Since this collaboration agreement was decisive for the project Starbucks was part of, I decided to change my plans a bit and to use this second episode to tell you how the company historically had a responsible way of thinking their business, and how this alliance was born.

In 1990, Starbucks created its mission statement, expressed as “to establish as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles as we grow”. This statement relied on six guiding principles, including “to apply the highest standards of excellence to the purchaising, roasting, and fresh delivery of our coffee” and “to contribute positively to the communities and the environment [that the company was part of]”. Alligned with these principles, Starbucks paid 2,5 times the price the US market paid for green coffee by 2001; and in 2002 increased its direct purchases from small to midsize farms and co-ops from 9% to 59% of its cofee supply.

The mayor shift the company made in its purchases policies was, however, the introduction of environmental preservation efforts focused on shade-grown coffee through an alliance with Conservation International. This organization had the mission of conserving the Earth’s living natural heritage and its global biodiversity. Back in the mid 1990s CI had identified coffee as an important commodity affecting biodiversity and conservation, since coffee plantations had been taking over areas otherwise covered by rain forest. Traditionally, coffee had been grown under shaded conditions, but in the 1980s new higher-yielding varieties were introduced that were grown in full sunlight and generally in conjunction with intensive agrochemical usage.

In 1996, CI launched a pilot Conservation Coffee Program with three coffee cooperatives located in the El Triunfo Biosphere Reserve in Chiapas, Mexico. The region had been declared protected area by the government in 1972 because of its important biodiversity, and there were around 14.000 farmers operating in the area (with coffee being the main crop). CI’s program aimed at preserving and promoting shade-grown coffee; the task of getting small farmers to change their regular practices for conservation methods was not easy, though. In the words of the head of the CI’s Coffee Initiative “Farmers are great economists: ‘A day doing what I know, I feed my family. A day trying a new way, I might not'. So we knew from day one that we had to offer clear benefits to accelerate adoption of conservation practices”.

It was clear for CI that linking with a mayor coffee buyer was key for the program to work out. They approached Starbucks in 1997, but the company was reluctant at first: even if making a positive impact was one of their guiding principles, they were not willing to buy coffee from just anybody because sacrificing quality was not an option. On the other hand, they were experts in selling coffee, and CI was an expert in conservation: a fruitful partnership would leverage both parts’ expertise.

By the beginning of 1998 both companies signed a memorandum of understanding for a pilot sourcing program. Starbucks agreed to go out to Chiapas and communicate to farmers what they had to do to bring their coffee up to its quality standards, although there was no commitment to buy. The company did commit to contribute US$ 150.000 over three years. Meanwhile, CI’s role was to work directly with the farmers, as it had been doing since the pilot program was launched in 1996.

This was just the start for the collaboration agreement. Since this first step turned out to be successful, both organizations extended the reach and the duration of the project… but I’ll tell you more about that in the upcoming episode!