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Starbucks Speaks on YouTube

Take a look at this two-minute video featuring Dub Hay – the head of Starbucks coffee team – talking briefly about Starbucks coffee purchasing practices…

This is in response, among other things, to the recent trademark issues in Ethiopia.

Long story short…

The government of Ethiopia wants to trademark the names of their key coffees. To use those names will require paying the government a royalty. There was protest from the coffee industry. Oxfam made the claim that Starbucks was trying to block the trademarking. Camera crews pull up and report on Starbucks’ poor conduct and Starbucks was reflected in the media as trying to hurt African farmers.

Truth is…
The National Coffee Association is actually the group that spoke out against the trademarking move (not Starbucks). Starbucks IS against it, but because they are afraid it would hurt the coffee farmers economically by pricing them out of the market. (So the African government would benefit – not the farmer).

Starbucks is big and easy to get to with street-side locations… it makes an easy target. Oxfam wanted to gain media coverage about the trademark issue… so you get a camera crew outside of a London Starbucks location. If I wanted to protest against the coffee purchasing practices of Maxwell House or wanted to picket the National Coffee Association… where would I stand? The grocery aisle in front of the cans of Folgers?

While working at Starbucks, I was always frustrated that we didn’t tell OUR side of the story. We weren’t bad guys. We just didn’t believe in engaging in these mud-slinging conversations. So, without our own voice in the conversation… people assumed Starbucks had something to hide… (or else we would have defended ourselves…)

But that’s not the history of Starbucks…

Let me give you two examples…

Starbucks and Community Give Back

Did you know that nearly every single Starbucks location that opens has a charity partner that the store employees work with and help support? Sometimes it’s a cash donation, donation of food to a soup kitchen, or employees (called partners) volunteering time to help the charity… there is always a local connection.

When I first started working at Starbucks in ’96 we not allowed to talk about these partnerships.

Why?

Because company leaders, Howard Schultz and Howard Behar, felt it was considered boastful and rude. We weren’t doing it for a publicity stunt or for PR. Starbucks does it because it is the right way to be a neighbor within the community. So calling the TV cameras was considered exploiting the local relationship we were building… that breaks the trust between you and the local charity folks.

My dream as a field marketing person was that people would be so aware of the good things that Starbucks does that, instead of it being a joke that “another store opened up down the street,” that the presence of another store would elicit the response “oh good – another Starbucks… that means great coffee AND [pick one] (more support for AIDS education / more help getting disadvantaged kids to read / more help for the soup kitchen / more help for the local charity)…

No Bad-Mouthing

I also remember one story of how Starbucks took their business away from a well-established local bakery and the woman ended up closing her bakery and going out of business. The story pitched Starbucks as being an insensitive local business crusher that went with a bigger bakery and put the little guy out of business.

What Starbucks didn’t share was that the woman was repeatedly failing health code inspections. Starbucks tried to work with her to get her bakery cleaned up, but she didn’t get herself back up to code. Starbucks said, if you can’t keep up to the city codes and OUR codes – we can’t use you… Finally they had to withdraw doing business with her.

So Starbucks took a media-beating versus calling this woman and her business dirty. (It would have been VERY easy to be honest with the media – but there was no need to bad-mouth this person).

And with regard to the coffee discussion from above… Starbucks should never have caved to the pressure of the Fair Trade activists… Instead should have talked about how Starbucks’ purchasing methods are actually BETTER (and always have been) than what Fair Trade offers…

Fairest Trade Coffee

Starbucks pays more for coffee directly to the farmers they work with than what Fair Trade prices command.

Fair Trade is all about making sure the coffee farmer doesn’t get taken advantage of by brokers or their governments.

But Starbucks pays MORE than Fair Trade prices.

Instead of Starbucks ever offering Fair Trade coffee in the first place, they should have said…

“No. Our coffee is Fair-er… or Fair-est Trade Coffee. We pay more than the Fair Trade price directly to the farmer. In fact, if we DO offer Fair Trade the farmer makes LESS money that Starbucks already offers!”

And… by the way, Fair Trade isn’t necessarily good or quality coffee. Fair Trade isn’t a quality inspection – it’s a payment structure certification.

Through farming techniques and land management advice Starbucks helps farmers grow better quality coffee so they can be more competitive locally. (And get more coffee companies to buy their crops).

In closing…

So while Starbucks hasn’t spoken out it in the past… And while it’s not a perfect company… they try to do the right thing all the time. And if they make an honest mistake, they try their best to correct it…

Perhaps this YouTube video is the beginning of Starbucks telling their side of the story.

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