Learnings

 How to establish the research scope and filter down the company of interest to be
benchmarked (Relevance with the client business, method of operation, etc)
 How to structure a report and find relevant details required through secondary research.
 Transform the report details to a convincing storytelling using presentation

Background

Starbucks initiated C.A.F.E. (Coffee and Farmer Equity) Practices in 2004 to evaluate, recognize, and
reward high-quality, sustainably grown coffee producers. C.A.F.E. Practice is a green coffee-sourcing
program developed by Starbucks in collaboration with SCS Global Services, a third-party evaluation,
certification, and auditing firm, and Conservation International (CI), an international environmental
non-governmental organization.

C.A.F.E. Practices seeks to ensure that Starbucks sources sustainably grown and processed coffee
by verifying coffee production's economic, social, and environmental aspects against a defined set of
evaluation criteria. Small farms (<12 hectares) represented 98.6% of the C.A.F.E. Practices,
managing 59% of the hectares under the program. Hence, it is imperative to organize and support the
smallholder farm networks in adopting best practices and information dissemination, which are done
through intermediaries called Product Support Organizations (PSOs). PSOs take various forms and
include exporters, cooperatives, suppliers, wet mills, farm associations, and dry mills. The PSO
procure produces from farmers which is then processed in the mills.

1. Who are the Suppliers/PSOs?

 Associations/ Farm-Cooperatives – 48%

 Exporters/Suppliers – 42%
 Processors – 8%
 Unidentified – 2%

These suppliers act as intermediaries who have a network of farmers who supply coffee beans and
mills that process these beans under them, which are later sold to Starbucks. The suppliers appoint a
representative(s) who ensures the implementation of C.A.F.E practices across the farms and mills
under them.

2. How are they recruited?

 Suppliers register themselves with Starbucks, and Starbucks suppliers are carefully selected
by following Starbucks’ Coffee and Farmer Equity (CAFE) standards and Coffee Sourcing
Guidelines (CSG). Each Starbucks supplier needs to meet these standards and requirements

3. How are they renumerated?

 Starbucks pays them through contracts depending on the quantity of coffee beans supplied
provided they meet the minimum Starbucks standards. Starbucks fixes the coffee bean prices
upon mutual agreement with the suppliers, depending on the present year's market and
climate conditions.

4. Does Starbucks give them support like farm equipment or machinery apart from monetary
compensation?
  Starbucks brings agronomists, researchers, and farmers together to share the latest research,
information, advice, and tools to grow coffee sustainably and profitably.
 Starbucks donates climate-resilient coffee trees to farmers through the PSOs and uses these
trees to replace those that are declining in productivity due to age or disease.

5. How does this help them connect with the farmers?

 98.6% of Starbucks coffee producers are small farmers with <12 hectares of land so these
PSOs help organize and support these smallholder farm networks in adopting best practices
and information dissemination.

How often does Starbucks stay in touch with the PSOs?

 Starbucks audits the farms, PSOs, and mills annually to ensure these entities adhere to
Starbucks C.A.F.E practices.
 Apart from this, Starbucks procures the produce from these suppliers after the completion of
the harvest.

How is it different in different countries?

 The type of PSOs depends on the supplier registrations received and the qualifying criteria
Starbucks sets
 ; hence, it does not pertain to a single cooperative/exporter/trader.

Impact in Numbers
 No. of Farms = 4,64,728
 Total Hectares = 11,00,335
 No. of direct/Indirect laborers = 2.48 million
 99.7 % of C.A.F.E. Practices farms and mills with school-age children, ensured their access to
school in the period 2017–2021
 At Least 99.9%of C.A.F.E. Practices farms have not converted forest into coffee production
since 2004, which is important to ensure that farmers are not expanding production at the
cost of forests
Starbucks Value Chain

Farmer Outreach

 Since 2004, Starbucks has supported coffee farmers through its Farmer Support Centers and
the C.A.F.E. Practices program.
 With 8 centers globally, including the agronomy research hub at Hacienda Alsacia in Costa
Rica, Starbucks provides farmers access to agronomists and innovative techniques to
improve crop quality and profitability.
 Through these initiatives, Starbucks aims to address the challenges coffee farmers face and
ensure the long-term sustainability of coffee production.
 To date, Starbucks has trained more than 200,000 farmers providing free access to education
and resources through its Farmer Support Centres.

Impact of C.A.F.E Program

1. Sustainable sourcing and growing. Starbucks coffee is 99 percent ethically sourced, and the
company is on a mission to make coffee the world’s first sustainably sourced agricultural product. We
purchase coffee verified by C.A.F.E. (Coffee and Farmer Equity) Practices. Developed with
Conservation International, these guidelines provide comprehensive social, environmental, and
economic criteria to help sustain and strengthen coffee communities.

2. Open-source agronomy. Starbucks Farmer Support Centers at Hacienda Alsacia in Costa Rica
and in eight other coffee-growing countries around the world bring agronomists, researchers and
farmers together to share the latest research, information, advice and tools to grow coffee more
sustainably and profitably.

3. Sharing climate-resilient coffee trees. We have donated more than 31 million climate resilient
coffee trees like the hybrids created at Hacienda Alsacia. Farmers, whether they grow coffee for
Starbucks® or not, can use these trees to replace those declining in productivity from age or disease.
4. Loans for farmers. The Starbucks Global Farmer Fund has invested $49 million in coffee-
producing countries worldwide,farmers can use these funds to renovate and strengthen their farms
and farming practices to be even more productive and sustainable.

5. Support in difficult times. At Starbucks®, we will use our Farmer Support Centers to share
information and supplies during the global COVID-19 response. In addition, the
Starbucks® Foundation provided $1 million to Mercy Corps to help support education,
communication, supplies and materials to assist in the prevention of COVID-19 in those coffee, tea
and cocoa farming communities.

6. Investing in diverse and high-quality coffee. Starbucks® is committed to a diversified buying

approach to ensure demand for high-quality coffee grown by women, smaller coffee growers and from
a wide variety of places around the world.

Sources:

 Starbucks C.A.F.E Program

 Starbucks Farmer support centers
 Starbucks Responsible Sourcing
 C.A.F.E Practices Manual
 Coffee Sustainability
 Starbucks C.A.F.E Practices
 Starbucks Suppliers Terms and Conditions