Starbucks trades in fair-trade for 'Shared Planet': Worth your money?
Filed under: Food
Starbucks' announcement today that it was launching its own fairly-traded coffee label, "Shared Planet," had me buzzing. My favorite coffee roaster is a local company called Stumptown Coffee, and one of the reasons I love the coffee so much is that I can trust the business' founder to deal fairly with the suppliers. He travels to every country from which the beans come, often tasting each batch himself, and is famous for having paid the highest price ever for an especially eloquent crop of beans. I know Starbucks works hard to pay more for coffee than other coffee big boys -- Folgers and Maxwell House come to mind -- but the average price the coffee giant pays, $1.42 a pound, is probably about a third of Stumptown's price.Interestingly, Starbucks is still quoting that $1.42/pound, the average price from 2006. It appears that 2007 and 2008 have been lower, as worldwide commodity prices have decreased, but Starbucks has stopped talking price (even its SEC filings are mum on unit pricing). The company is dropping the talks of dollars and cents and is now controlling the messaging around its coffees. It's important to note that Starbucks is not doing anything new; it's just creating a brand around its practices (not necessarily a bad thing). Today, 65% of the coffee beans it purchases fit the Shared Planet description; they're "ethically traded" and "responsibly grown." The Shared Planet web site indicates Starbucks hopes to eventually buy 100% of its coffee in this ethical, responsible manner.
Fairtrade coffee is a brand, too -- and according to Angry African, Starbucks has, on average, paid more per pound than Fairtrade for its coffee (and there are some other arguments to be had with Fairtrade -- he says they lag behind Rainforest Alliance with their sustainability requirements and farmer assistance). By creating its own branding and messaging around the principles it already believes in and supports, Starbucks is making a smart move.
Is it worth your money? I'd say "yes," unequivocally it's worth your money to buy coffee that's been grown in an environmentally-healthy way. It will directly impact the planet's future (a little less so today than bananas or corn for ethanol grown in the rainforest, but that's another topic), as conventional commodity coffee beans are grown by cutting down rainforests and deploying heavy use of pesticides and chemical fertilizers. I'd argue that even more needs to be done. But if you're choosing between Starbucks Shared Planet and the conventionally-traded Dunkin Donuts or grocery store brand: the extra price is worth it.
Reader Comments (Page 1 of 1)
9-19-2008 @ 5:10AM
Jeremy said...
It's a good point. While Stumptown set a great example, it's unfair to compare Starbucks with them. Compare Starbucks with a corporation of equal size and you realize how progressive and ethical they are.
Thanks for the link! Duly returned.
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9-19-2008 @ 7:39AM
Angry African said...
Thanks man. Really appreciate it. A very good piece. I am busy writing a piece on Starbucks and will make a link back to you. Have a good cuppa!
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9-19-2008 @ 7:45PM
RR33 said...
I guess my question is--is Stumptown Fair Trade certified, yes you can "trust" them to treat farmers fairly but by definition the FT price quoted by Starbucks is regulated by FLO--there is a base price plus $0.10 sustainability premium plus $0.20 organic premium (these were raised in '07). Just a question, I am trying to figure out this mess myself
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9-22-2008 @ 7:44AM
Angry African said...
Sorry - the message below is meant for your questions.
10-02-2008 @ 12:23PM
Angry African said...
@RR33 - Well, think about how the FT price is given to farmers. It is broken down into 3. One for the coop, one for the farmer and one for a social "cause". In some cases the farmer gets as little as 50 cents. The Starbucks criteria includes a provision for a sustainable price to farmers. Proof that the price the farmer gets is sustainable. It is not included in FT. Rainforest Alliance have a similar set of criteria for sustainability. Also, FT only works with coops, meaning that the poorest farmers (who are not organized in coops) can not be part of the process. Partly because it is easier to certify large groups and secondly because the individual farmer can not afford to be certified by FT. FT charges anything between $500 to $2,000 per certification. When the national income is $300 p.a. one can understand that not everyone can pay this. Starbucks doesn't charge farmers. In fact, some of the companies that use FT actually pays for the farmer to be certified. (Shocker: Nestle pays for the farmer for their Partnership Blend).
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9-22-2008 @ 12:40PM
Mike said...
Just a clarification about Fair Trade. The price is not broken down in three parts as suggested, it is paid to producer organizations for coffee put in the port. By the way, these producer organizations are owned by the farmers who democratically run them and decide how to invest the social premium paid by Fair Trade buyers in their communities.
Fair Trade is the ONLY certification that provides financial security to producers by securing a minimum price. This saved thousands of lives and kept families in their farms during the coffee crisis with international record low prices from 2001 to around 2005.
Also, Fair Trade certification provides scholarships to producer organizations that can not afford to pay for the certification. I read that around 100% of the applicants for these scholarships received funds to pay for the certification.
We should not assume that the poorest of the poor somehow benefit from the other certifications if they do not benefit from Fair Trade. Unorganized farmers are definitely in a more precarious situation that organized farmers, but I do not believe that somehow the other certifications somehow assist them in a way that Fair Trade does not.
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9-22-2008 @ 1:17PM
Angry African said...
I don't think you can say that FT is the only one that provides financial security. It is the only one that gaurantee the price. But that is a different story from being the only certification that provides financial security. Rainforest Alliance also secures financial security. They have a different system, but they do provide financial security. And so does Utz. Each one has a different set of criteria, but they all have a positive impact. And Rainforest Alliance helped those families that they worked with during the crisis as well.
We can safely assume that farmers who benefit from either Rainforest Alliance or Starbucks certification do benefit from it. Go have a look at the certification and documentation to see whether the benefit is real or not. And of course they benefit if they do not get Fairtrade because of Fair Trade limitations.
Fair Trade is not the answer. It is part of the answer. Each system answers different challenges and help to benefit the farmer. Fair Trade is pretty damn good. But it is not perfect.
The proof is in the pudding - we have to look at how the farmers benefit in the end. Practically and not just through good certification though. I have worked with Rainforest Alliance, Starbucks, Nestle Partnership Blend and Fair Trade. None of them are perfect. But each of them deals with a specific set of challenges. I feel good if I buy any of them. Knowing that the farmer will benefit.
Glad to hear about the scholarship.
10-02-2008 @ 9:16AM
Jim2804 said...
Are Starbucks meeting the minimum (FT standard) price per pound?? When they talk about averages, one wanders what the lowest of that average is and how many tonnes are purchased at that price. Why when Estima is FT can they not make all thier other coffees FT? I'm sure shared planet does great things and is an improvement.
But I as a member of our local FT steering group and someone who feels aware of ethical trading programmes am left confused by the many ethical products out there. I think why not make it easy? People are learning to look for the FT logo and maybe not many people have time to read the leaflets, packets etc to compare products and retailers and decide who to buy from.
Fill me in guys. It's hard to filter all the info out there. I'm just for clear labelling and standard ethical practice, but if people can choose a product with an ethical promise rather than one with none, all the better.
Cheers guys, Jim the newbie
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10-02-2008 @ 12:41PM
Angry Afrian said...
Part of the reason why not all coffee can be FT? There are a few:
1. FT only deals with Arabica and not Robusta. Arabica is good for the coffee shop type of coffee, but the less expensive Robusta is mixed in for soluble coffee.
2. FT is complex to negotiate. You have to negotiate in each country you want to sell your coffee. For instance, Nestle has a FT coffee in the UK called Partnership Blend. Guess what? The Italian FT organization refuses to allow them to sell any FT in Italy. That becomes a problem if you have to negotiate a new deal each time and you operate in 200+ countries.
3. FT does not deal with all coffee farmers. Only coops. The really small guy is left behind and the really big one not looked at.
And there are more reasons for this. Go check out the piece I wrote about FT problems if you want more detail. http://angryafrican.net/2008/02/21/my-beef-with-fairtrade/
On the Starbucks price. They have a sustainability criteria that means each pound of coffee needs to have a clear paperwork trail to show that the price paid for the coffee is a sustainable price - what the farmer needs to survive and look after their crops as well as increasing "wealth" to ensure kids go to school etc. Again, not a perfect system, but a slightly more transparent system than FT. FT is an artificial price that says "I am going to pay more than the market price". No clue whether it is sustainable as Brazilian farmers are much more efficient than Ethiopian farmers. But they get (almost) the same FT price for their coffee. (Actually a 2 cents per pound difference.)
So in many cases it is better for the farmer to not sell to FT as they can get a better price on the open market or through a deal with Starbucks that want specific origin coffee.
Just a few - don't want to write an essay! But hope it helped.
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