April 29, 2013

C.A.F.E. Ole: Starbucks and Sustainable Sourcing at the Landscape Level

Rachel Friedman, University of Queensland Gabrielle Kissinger, Lexeme Consulting

Editor’s note: The following is the last case study featured in the Landscapes Initiative’s Reducing Risk: Landscapes Approaches to Sustainable Sourcing report. These case studies are meant to demonstrate how a landscape approach can benefit businesses and supply chains by managing environmental and social risks at the landscape level.

Even as Starbucks dominates the coffee landscape, with net revenues of over US$ 13.3 Billion, the company has held a commitment to “responsibility” through ethical sourcing, environmental stewardship, and community involvement. Though questions of ethical sourcing and environmental degradation are only now widely discussed in corporate boardrooms around the world, 15 years ago Starbucks recognized the negative impacts that environmental degradation and poor sourcing would have on their profits and reputation. Thus, seeing a way to reduce future business risk, the company took it upon itself to develop a method that was environmentally sound and resulted in sustainable sourcing.

In 1998, Starbucks partnered with Conservation International (CI) in order to create their own system of agricultural best practices for coffee production that maintained ecosystem services and protected biodiversity, while still ensuring profitable crop production. The result is Starbucks’ own tailor-made coffee standard—Coffee and Farmer Equity (C.A.F.E.) Practices.  C.A.F.E. Practices combine roughly 200 economic, environmental, and agronomic indicators into a single reporting tool. By piloting innovative projects with coffee-growing communities in Mexico, Indonesia, and Brazil, the partnership has worked on improving coffee production, conserving and restoring natural habitat, and identifying solutions to help farming communities be more resilient to climate change. In each of these three countries, carbon finance opportunities have been evaluated on how they can help diversify farmer income and entice coffee farmers to stay with coffee production, as opposed to turning to more lucrative and less sustainable crops, mainly palm oil.

Photo credit: Starbucks

However, Starbucks and CI recognized that simply acting at the farm level wasn’t enough.  Supporting economic and social development in coffee production landscapes, beyond the farms they sourced from, was equally important to ensure thriving coffee producing regions in the future. In Mexico, the partnership was instrumental in persuading local communities to continue sustainable farming practices and conservation techniques with technical and financial assistance provided by CI, while Starbucks became a dependable buyer of beans. As a result, over 1,000 farmers have received training in coffee methods, over 17,000 trees have been planted across 442.5 acres, and Starbucks has developed a new line of coffee called “Shade Grown Mexico”, which it has sold since 2004.

To maintain high coffee yields and ensure farmers did not transition out of growing coffee, Starbucks and CI began to develop new strategies to address climate change that benefited both farmers and ecosystems. The partnership worked with communities to improve production practices and link coffee farmers to carbon markets as a means of providing additional income in return for an agreement to respect forest boundaries. So far, these interventions have proven successful with over 600 farmers engaged in farmer extension programs, including certification programs. Additionally, the partnership has worked with the Aceh Coffee Forum to develop a climate change plan designed to improve farmer livelihoods and coffee production in the region.

Because of interventions worldwide such as the one in Mexico, as of 2011, eight percent of all Starbucks coffee purchases are Fairtrade certified, and 86% of Starbucks coffee are verified through C.A.F.E. Practices. Additionally, while the main intent of C.A.F.E Practices was to address operational and community risks for Starbucks, it has also succeeded in promoting value-chain efficiency. Since C.A.F.E. Practices were developed, Starbucks estimates it has had positive social, environmental and economic impacts for more than one million workers employed by participating farms showing that good business does not need to come at the expense of socially and environmentally irresponsible practices.

Related Reading

Reducing Risk: Landscape Approaches to Sustainable Sourcing – Starbucks and Conservation International Case Study

Business and the Landscape Approach: Achieving Real Sustainability

Now on Tap: How SABMiller is Brewing a Better Future in Bogota

Olam International and the Triple Bottom Line in Action

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