Coffee and CAFE program
Rapid store expansion is driving Starbucks to buy more coffee from Central America while increasingly looking for new suppliers in places like Peru and Indonesia.
General manager of Starbucks Agronomy Company, the group's farmer support center in Costa Rica, said Starbucks expected to ramp up coffee purchases from outside Central America, currently the source of most of its beans.
"Opening five new stores a day, we have to buy more coffee from Central America and more coffee from different origins," manager said. "The ratio of growth from Central America will be less than that of say Peru."
He said weather in Central America last year, especially the effects of Hurricane Stan, hit the volume but not the quality of the coffee Starbucks purchased.
Costa Rica lost around 11 percent of its coffee crop to unseasonable rain that caused a fungus outbreak. Guatemala lost an estimated 10 percent of its crop to Hurricane Stan.
Starbucks Coffee Co. buys its coffee green from individual growers in 27 countries through forward contracts, bypassing the international coffee futures market. It works closely with farmers to assure quality.
The San Jose-based Starbucks Agronomy Company goes into the fields to give Central American farmers technical advice to help keep standards high and flavors right, sometimes suggesting different varieties of plants or fertilizer. Farmers may come here and ask and together can be found the right cup profile.
"If we can continue to work with the same farmers year after year, we can obtain quality results year after year."
The advice backs up Starbucks' "Coffee and Farmer Equity (CAFE) Practices" program, begun in 2004, to encourage sound environmental and labor practices. Farmers are graded in meeting standards and rewarded when Starbucks' buyers favor farmers with higher grades.
In 2004, the first year of the program, Starbucks bought 35 million pounds of coffee produced under the good practices program. Last year the figure jumped to 76 million pounds.
The company's goal is to buy 225 million pounds -- the bulk of its purchases -- from the CAFE program growers by 2007.