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Starbucks Coffee Commodity Chain

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Lauryn Platt

on 29 July 2013

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Transcript of Starbucks Coffee Commodity Chain

From an Idea to Your Hands: Starbucks Coffee Commodity Chain
Step 1
Product Testing and Development: In the US plant of Bay Bread Bakery in South San Francisco
Before Starbucks begins testing on a larger scale (in stores throughout big cities such as Seattle, San Francisco and Atlanta) products undergo testing here to work out any kinks
Environmental Effect: The carbon footprint for your cup of coffee begins here, in this testing plant. The plant requires electricity to keep it running efficiently.
Step 2
After product testing, ideas are sent out to farmers so they can plant and harvest the necessary type(s) of coffee beans.
Coffee Retailers have their choice of location: they can buy coffee from three main growing regions Africa/Arabia, Latin America, Asia Pacific. From those three regions, buy from: Brazil, Columbia, Costa Rica, Guatemala, Mexico, Saudi Arabia, Ethiopia, Kenya, Tanzania, Indonesia and a very small amount from Hawaii.
Step 3
Ethiopia is only one of the countries that rely on coffee production
According to WIPO, coffee generates 60% of Ethiopia's total export earnings
Approximately 15 million people in Ethiopia are somehow involved in the coffee making process
Starbucks has been buying its coffee from third party providers and will continue to do so for a majority of its coffee. However, they have recently bought a coffee farm in Costa Rica on the slopes of the Poas Volcano.
After being grown and harvested, the coffee must go through exporters and importers
According to Global Exchange, most small farmers sell directly to middleman exporters who pay less than market value and keep a good chunk of profits to themselves
Larger coffee growers export their own products with prices set by the New York Coffee Exchange
However, wages are still low for workers and farmers, $2-3 a day as well as poor working conditions
Importers buy coffee from established exporters or directly from larger coffee farms
Importers buy in bulk and then sell to Roasters in frequent smaller orders.
Once imported coffee beans are then transported to Roasters
Starbucks currently has four roasters one of which is here in Amsterdam
Roasters are important to the process of getting that perfect cup of Starbucks coffee because being heated is what gives coffee its taste
Roasting consists of sorting, roasting and cooling
Most of Starbucks' roasters package their own newly roasted coffee beans
Step 4
Step 5
Pennsylvania (York) is where another one of Starbucks roasters are located (the other two are in Carson Valley, Nevada and Kent, Washington)
After being packaged, the coffee beans are then trucked to retailers around the country, such as grocery stores and Starbucks locations
Step 6
The trucks then arrive to retailers such as the local Starbucks in Columbus
Barista's then use the packaged coffee to brew fresh coffee for future consumers
Step 7
Consumers arrive at Starbucks locations to buy fresh brewed coffee or packaged coffee in grocery stores
Finally, consumers can enjoy a nice cup of coffee at home or with friends at Starbucks
By Lauryn Platt
Environmental Effects: The next thing that adds to a Starbucks cup of coffee is the effort it takes to grow the beans. It takes water, fertilizer and labor. Next would be the emissions from the boats, trains and trucks used to transport the coffee to exporters, importers and then roasters. The roasting plants require electricity to roast the beans. Finally, the last leg of the journey once again relies on transportation to get the final product to retailers and then the consumer. Who knew one cup of coffee could have such a big carbon footprint?
Seattle is where the Original Starbucks began in 1971.
Vancouver, British Columbia is where the first international Starbucks opened
Over 2.25 million cups of coffee are consumed everyday
Coffee is mainly grown in developing countries while coffee is consumed in industrialized countries
Worldwide, 25 million smaller producers rely on coffee for a living
In Brazil, 3 billion coffee plants are harvested by 5 million people (1/3 of coffee comes from Brazil)
Works Cited
"The Coffee War: Ethiopia and the Starbucks Story." The Coffee War: Ethiopia and the Starbucks Story. Web. 23 July 2013.
"Economics of Coffee." Wikipedia. Wikimedia Foundation, 24 July 2013. Web. 25 July 2013.
"Coffee Roasting." Wikipedia. Wikimedia Foundation, 07 July 2013. Web. 23 July 2013.
"Coffee FAQ | Global Exchange." Coffee FAQ | Global Exchange. Web. 26 July 2013.
"Starbucks Carson Valley Roasting Plant Wins Manufacturing Excellence Award." Reno Gazette-Journal. Web. 26 July 2013.
"Starbucks." Wikipedia. Wikimedia Foundation, 25 July 2013. Web. 25 July 2013.
Fieser, Ezra. "Coffee Beans Shipped to U.S. for Roasting, Sent Back to Central America for Consumption." The Seattle Times, 27 Nov. 2010. Web. 22 July 2013.
"From Bean to Cup: How Starbucks Transformed Its Supply Chain." – Procurement – CSCMP's Supply Chain Quarterly. Web. 22 July 2013.
One of the major social impacts of the production of a cup of Starbucks coffee is creating relationships between countries. When buying coffee, once you have a good experience (you like the person you are buying from and the quality/taste of the coffee) you are more likely to keep buying from that Importer.In turn, that importer has exporters that give them a good deal for good coffee so they continue to buy from them. That exporter has certain farms in which he knows they produce good quality beans and will accept their offer on the coffee. The price the coffee is bought at is most likely not fair to the farmer but that farmer is still making money to support his family in some way all because you bought a cup or bag of coffee!
Link to map: https://maps.google.com/maps/ms?msid=213551375588487587344.0004e27ef931afda637ed&msa=0&ll=20.13847,-15.117187&spn=82.383747,173.144531
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