1. STARBUCKS COFFEE:Fair Trade or Fair Marketing Presented by: Jose Enrique Guadiana Chong Amy Qiu Tseli Mohammed Brenna Schneider Alex Volpone Na Wang 14 March, 2011 Managing the Triple Bottom Line International Business School Brandeis University

2. History 2

3. Industry Setting 1998: six companies control 50% of the world trade market 2000: US consumes 17% of the total consumption, but about 40% of the dollar volume sold 2002: difficulty in terms of overproduction and non-responsible coffee growing Nestlé, Procter & Gamble, Kraft, and Sara Lee accounted for approximately 70% of global roasting capacity and 40% of retail market. Roasters deal directly with importers, exporters or cooperatives Price of coffee at its lowest in 30 years due to increasing supply of coffee from countries with low production costs. Supermarkets main retailers with 60% or more of the coffee sold in the US Gourmet coffee market grows to 8% of the world coffee sales 3

4. Partnership withConservation International (CI) CI and producers signed agreements Individual producers commit to delivering an authorized quantity of beans to their cooperatives, which in turn sign contracts with Starbucks CI had a team of three full time extensionists who” visited every farm and monitored progress and results” against the following criteria: No trees could be felled on producers’ farms or in the Biosphere Reserve No coffee pulp could be thrown into the rivers planting of more and different varieties of shade trees CI provide training courses in the villages to the farmers, co-op managers, and technicians on quality control, organic farming methods, tree planting and pulping methods, among others. 4

5. CSR Efforts “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Focus on: Ethical Sourcing Environment Community 5

6. Ethical Sourcing Coffee Sourcing C.A.F.E. Guidelines Increase in Purchase of C.A.F.E. Certified Coffee Fair Trade and Organic Farmer Support Farmer Loans $14.5 million Cash Flow Challenges between harvests 6 “We've always believed that businesses can - and should - have a positive impact on the communities they serve.”

7. Goals: Ethical Sourcing 7

8. Environment Improve Environmental Impact Coffee Growing Regions Retail Business Locations Reduce Water and Energy Consumption Climate Farmers’ Access to Carbon Markets Green Construction Recycling 2012: recyclable cup solution 2015: front-of-store recycling 2015: 25% of beverages served in reusable containers 8

9. Goals: Environment 9

10. Goals: Environment 10

11. Community Community Service (200,000 hours) Global Month of service Dream House in Baltimore City Year in Los Angeles Food project in Boston Youth Action 50,000 young people (STARBUCKS)RED Starbucks Foundation Starbucks China Education Project C.O.A.S.T Fund Ethos Water 11

12. Goals: Community 12

13. In the news… 13

14. Analysis of CSR Efforts Marketing rosier than reality? Ethical Sourcing: If 2015 goal achieved, 100% of coffee will have min 60% compliance 1% of all Starbucks Coffee is Fair Trade Environment: Recycling: Only 10% of cups made from recycled material, and not apparent aim to change this Community: Volunteerism: 2008: employees in Canada and the US dedicated 245,974 volunteered hours 2009: employees worldwide only 184,011 volunteered hours 14

15. “Some may question whether a company can truly do well and do good. We know from experience that it’s not only possible to do both; it’s critical to our future success.” ~ Starbucks 2009 CSR Report, 2 15