“The only way the oil companies could make more money would be if they were drilling for oil and struck Starbucks coffee.” — Jay Leno
Starbucks claims it’s “committed to paying fair prices for all of our coffee.” Starbucks’ website boasts that in 2004, “Starbucks paid on average, $1.20 per pound ($2.64kg) for high-quality coffee beans.”
Now will pillage for yarn (see comment #1) already has issues with this $1.20 figure, which is lower than the fair trade certification minimum of $1.26 an lb. “Like it would kill them to pay the other $.06/lb???” she asks.
But lately, I’ve been wondering if this issue is simply about 6 cents. Read the Starbucks’ claim again: “Starbucks paid on average, $1.20 per pound ($2.64kg) for high-quality coffee beans.”
Paid $1.20 to whom?
Until a few days ago, I blindly assumed that this $1.20 per pound was the average price of coffee for all farmers who sold to Starbucks. But Starbucks’ careful wording gingerly skirts that issue.
I started to suspect something different when I read Sean’s comment. Sean, who’s been working with coffee farmers in Costa Rica, revealed, for example, that Starbucks’ used to buy the coffee from those farmers via a “coyote” — a middleman who skimmed off the farmers’ profits. These middlemen often gouge farmers who have limited contacts, marketing skills, or access to transportation, then sell this ill-gotten coffee to companies who don’t bother to find out how or where the stuff came from.
In fact, I get the sense that, for a big chunk of their coffee, Starbucks has no clue how much farmers are paid at all. Starbucks says it began inserting economic transparency requirements into standard contracts in 2001, and that “Today, we have economic transparency requirements for 59 percent of all coffee purchased to provide information on the payments made to farmers.”
Meaning, that for 41 percent of Starbucks’ coffee, it’s pretty much impossible to figure out the cut that goes to farmers.
So how can Starbucks even know whether or not it pays ” premium prices that result in a profit for the farmers and their families”? And where does the $1.20 figure come from?
I mean, I’m glad that Starbucks is working toward economic transparency. I wish assholes like Nestle would do the same. What I’m saying is, if Starbucks stated that they’re aware not all their coffee may be “fairly traded” as of now, but are working to make sure this changes and plan to have full economic transparency by such and such a date, I’d be cool with that. I might even applaud that.
But why claim that all their coffee’s already fairly traded? Why imply that the $1.20 per pound figure goes for all their coffee purchases?
Cuz I feel like I’ve been duped, and I’m pissed off.
Update, 6/11/06: Dean of Dean’s Beans points out Starbucks’ deceptive tactics too: “The $1.20 is the average price they pay to the middleman, not the farmer. When you subtract out all the middleman fees, the figure is more likely about .80 cents, although when I asked the [Starbucks] speaker for that figure, he said he didn’t actually know it.”
Update, 4/26/07: Proof from the NY Times that Starbucks’ much-touted CAFE practices pay below fair trade prices: The Comon Yaj Noc Pic co-op in Mexico gets $1.23 a lb from Starbucks, compared to the now $1.31 fair trade minimum price.
damn siel, i’m glad you blogged this. very timely considering i just got a brief lecture from a starbucks supervisor about how all their coffee is “in a sense, fair trade” because they pay above the average market price. I wasn’t anticipating a claim like that so unfortunately, I didn’t do much to refute her other than point out we don’t know whether that money goes to the farmers or not. Anyway, good post.
Comment by Stephanie — November 14, 2005 @ 10:54 pm
great post –
“in a sense free trade” is that like “technically our t-shirts are not made by ‘slaves’ “?
starbucks story:http://fromthecabin.blogspot.com/2005/11/holiday-suits.html
Comment by kieran moore — November 15, 2005 @ 8:29 am
I’m also glad you blogged this. These kinds of claims are always made to sound good, but we really could use more transparency in such things.
Comment by beev — November 15, 2005 @ 8:38 am
Siel – just dropping another “hi” from the east side. glad to see you’re still keep on top of the challenge. i now make it a regular habit to ask starbucks for fair trade coffee. and by this i mean 1-2 times, daily. i work as a business consultant, and am always doing most of my work out of the office; i consider myself to be a pretty loyal starbucks customer, mainly because 1. i have the t-mobile hotspot, 2. they are completely dependable in an omnipresent way, 3. most of their locations are work-condusive, 4. their coffee drinks are just pretty damn good.
since i’ve started to ask for Fair Trade coffee, i was actually surprised at the number of times employees would quietly point me to a nearby cafe that offers FT coffee, and encourage me to check it out. this shows a lot, don’t you think?
I feel like we should create a map of all starbucks locations to plot them with scores on our success in getting fair trade coffee drinks.
Comment by jeni — November 15, 2005 @ 9:27 am
more plugs for portland (you may know of these guys already): although much smaller than starbucks, portland roasting and sustainable harvest buy direct from farmers or producer-owned cooperatives. that way, you know how much is going to the farmers. and portland roasting is doing some innovative in-house development work in their supplier countries, while sustainable harvest is innovating with helping farms move toward sustainability.
Comment by justin — November 15, 2005 @ 9:47 am
I think that original quote was taken slightly out of context. In 2004 Starbucks did pay on average $1.20 per pound for coffee. That average price point is for all coffees Starbucks purchased that year not just Certified Fair Trade coffee.
I think it would be a better representation to quote the average price per pound spent specifically for Certified Fair Trade Coffee.
If you read further into Starbucks website you’ll see that they have recently partnered with TransFair USA, one of nineteen members of Fairtrade Labelling Organizations International (FLO), and the only third-party certifier of Fair Trade products in the United States, to further Starbucks committment of having transparency in prices paid to the farmer.
Comment by Anonymous — November 15, 2005 @ 3:36 pm
Anon — I think you may’ve misread my post. What I’m saying IS that Starbucks says it paid $1.20 on average per pound of coffee, fair trade or not. My question is who that $1.20 went to. I’m aware that Starbucks is working with TransFair USA to work on the mermaid’s transparancy issues, which, as of now, are still serious issues.
Steph and beev — Thanks for the props :)
Kieran — I LOVE Gorey! You know, there was a play made based on his stories performed in LA — Wonder if it’s still running! Ok — I know that’s not the point of your post, but I’m psyched that someone’s blogging about Gorey –
Justin — These companies/initiative sound really interesting! I’ll need a lil time to read and digest — kinda makes me wanna visit Portland –
jeni — Cool about the Starbucks’ employees! Now if only the headquarters would wake up and smell the fair trade coffee — I hear ya with being stuck with Starbucks if you’re a nomadic gal with a laptop — One must have a reliable wireless network ;) Which is one of the major reasons the Starbucks Challenge is important. We’re working on a map with the results of the Starbucks Challenge that’ll pull the info from the del.icio.us links, but it’s taking us a lil while — Hopefully we’ll have it up and running soon :) In the meantime, let me know which Starbucks you visited and what the results were when you get the chance! Feel free to put the info in a comment or email if you’d rather not put it on your blog :)
Comment by Siel — November 15, 2005 @ 7:20 pm
Partial economic transparency is “in a sense” worse than no economic transparency because it lets a company become complacent and act smug about how open and ethical they’re being when, in fact, they’re really not doing that great a job at either. They believe in transparency as a policy or they don’t. They believe in fair trade or they don’t. Pick some policies and go with them. “In a sense fair trade” is meaningless doublespeak. In a sense white is black. Once a whole lot of black has been added to it.
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Comment by Lusidvicel — December 18, 2006 @ 7:37 am
Super informative…keep the info coming!
Comment by ruthy — January 22, 2007 @ 11:07 am