INTRODUCTION TO SUPPLY CHAIN MANAGEMENT

PROJECT
REPORT ON
STARBUCKS
PREPARED BY: -
NITIN HANS
2K22/SME/55
B.A. VOCATIONAL STUDIES (SME)
3RD YEAR, 6TH SEMESTER
 ACKNOWLEDGEMENT

I would like to express my heartfelt gratitude to all those who have contributed to the successful
completion of this project report.

First and foremost, I extend my deepest appreciation to my project supervisor, AAYUSHI

GUPTA MA’AM, for their unwavering support, guidance, and valuable insights throughout the
entire project.

I would also like to thank my fellow classmates, for their dedication, hard work, and
collaborative spirit.

I am grateful to for providing valuable feedback and suggestions that have helped refine the
contents of this report.

I would like to acknowledge the support and cooperation received from College of Vocational
Studies, as well as the resources and facilities provided, which have significantly contributed to
the successful execution of this project.

Last but not least, I would like to express my deep appreciation to my family and friends for their
understanding, encouragement, and patience throughout this project journey. Their unwavering
support has been a constant source of motivation.

Each of the above individual’s contributions has played a crucial role in shaping this report and
enhancing my learning experience. I am truly grateful for their involvement and support.

THANKING YOU ALL!

NITIN HANS
 CONTENT
1. INTODUCTION
2. THE STARBUCKS COFFEE COMPANY
3. ABOUT STARBUCKS
4. ABOUT TATA STARBUCKS PRIVATE LIMITED
5. TOP 10 THINGS TO KNOW ABOUT STARBUCKS 10 YEARS IN INDIA
5.1. Tata Starbucks Invests In Partner Wellbeing
5.2. Customers Enjoy Seamless New Ways To Personalize Their Starbucks Experience
5.3. Plant-Based Innovation Offers Customers More Lifestyle Choices
5.4. A Celebration Of India’s Coffee Heritage With Two Special Blends
5.5. There Are More Than 300 Starbucks Stores In India
5.6. First Starbucks Reserve® Store In India Offers A Multisensory Coffee Experience
5.7. Tata Starbucks Opened Its First Store In India In 2012
5.8. An Inclusive And Diverse Workforce With An Emphasis On Gender Equality
5.9. Starbucks Gives Back To Local Causes
5.10. A Long-Term Commitment To India
6. ETHICAL SOURCING
6.1. SUSTAINABILITY IS AT THE HEART OF STARBUCKS COFFEE SOURCING
7. SOCIAL, ECONOMIC AND ENVIRONMENTAL RESPONSIBILITY ARE THE PILLARS
8. THIRD-PARTY SCRUTINY
9. ENSURING THE FUTURE OF COFFEE FARMS
10. PLANTING COFFEE SEEDS
11. COMING FULL CIRCLE WITH SUSTAINABLE COFFEE FARMS
12. HELPING COFFEE FARMERS WEATHER CLIMATE CHANGE
13. SUSTAINABLE COFFEE FARMS
14. STARBUCKS ETHICAL SOURCING
15. HOW WE APPROACH ETHICAL SOURCING
16. STARBUCKS SUPPLY CHAIN STRATEGY
17. ANALYZING THE ELEMENTS OF STARBUCKS SUPPLY CHAIN STRATEGY
18. THE ROLE OF INFORMATION TECHNOLOGY IN STARBUCKS SUPPLY CHAIN
STRATEGY
19. THE CHALLENGES AND OPPORTUNITIES FACING STARBUCKS SUPPLY CHAIN
STRATEGY
20. CONCLUSION
“Starbucks” is a leading chain of coffee shops across the world. They have their own coffee
farms and procure coffee beans from the markets. The distribution is through their coffee
shops and other organized grocery chains. Prepare a report on their extended supply chain
covering the supply chain strategies that they have successfully implemented.

INDTRODUCTION
Starbucks Corporation is an American multinational chain of coffeehouses and roastery reserves
headquartered in Seattle, Washington. It was founded in 1971 by Jerry Baldwin, Zev Siegl, and
Gordon Bowker at Seattle's Pike Place Market initially as a coffee bean wholesaler. Starbucks
was converted into a coffee shop serving espresso-based drinks under the ownership of Howard
Schultz, who was chief executive officer from 1986 to 2000 and led the aggressive expansion of
the franchise across the West Coast of the United States.

Starbucks is a chain of stores that sell coffee. A chain is many stores owned by the same
company. Many of the stores look the same, and all stores sell the same items, often at the same
prices. As well as coffee, Starbucks sells beverages and baked goods.

Starbucks started in Seattle in the United States in 1971. The number of stores has grown
quickly. There are over 9,000 Starbucks stores all over the world. Most of these stores are in the
United States. Some large cities in the U.S. have many Starbucks stores. Sometimes they open so
many stores in one city that there are two Starbucks within a few blocks of each other.

Starbucks sells many kinds of drinks. There are many sizes: for example, some stores have short,
tall, grande, venti and trenta. There are many ways to customize each drink. A frappuccino, for
example, is a cold drink. Flavored syrup and cream is added to coffee or juice and stirred with
ice.
 THE STARBUCKS COFFEE COMPANY

Our Mission
To be the premier purveyor of the
finest coffee in the world, inspiring
and nurturing the human spirit — one
person, one cup and one
neighborhood at a time.

Our Values
We deliver performance through the lens of humanity:

Craft
We delight in the rigor of the details-no matter what our job is
We learn and teach in the pursuit of growth
We deliver excellence with passion and creativity

Results
We consistently achieve our goals with focus, integrity, and drive
We continuously innovate to stay ahead
We exceed the expectations of the people we serve

Courage
We embrace difficult conversations, with respect, to make us all better
We pursue audacious ideas beyond our comfort zone
We do the right thing, even when it’s hard

Belonging
We actively listen and connect with warmth and transparency
We recognize and appreciate every person for who they are
We treat each other with dignity and care
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting
high-quality arabica coffee. Today, with more than 38,000 stores worldwide, the company is the
premier roaster and retailer of specialty coffee in the world. Through our unwavering
commitment to excellence and our guiding principles, we bring the unique Starbucks Experience
to life for every customer through every cup. To share in the experience, please visit us in our
stores or online at stories.starbucks.com or www.starbucks.com.

About Tata Starbucks Private Limited

Starbucks entered the Indian market in October 2012 through a 50/50 Joint Venture with Tata
Consumer Products Limited and currently operates more than 390 stores in India across 54 cities,
Mumbai, New Delhi, Hyderabad, Chennai, Bengaluru, Pune, Kolkata, Chandigarh, Ahmedabad,
Surat, Vadodara, Vapi, Lucknow, Amritsar, Kochi, Ludhiana, Bhopal, Indore, Kanpur, Jaipur,
Siliguri, Thiruvananthapuram, Nashik, Guwahati, Bhubaneshwar, Goa, Nagpur, Jalandhar,
Anand, Patiala, Raipur, Kolhapur, Bhatinda, Dehradun, Udaipur, Vijayawada, Lonavala,
Mysore, Agra, Aurangabad, Calicut, Ghaziabad, Faridabad, Guwahati, Meerut, Nagpur, and
Vishakhapatnam through a network of over 4,200 passionate partners (employees). Starbucks
stores are operated by the joint venture, Tata Starbucks Private Limited, and branded as
Starbucks Coffee – A TATA Alliance.
Top 10 Things to Know about Starbucks 10 Years
in India
Starbucks entered the India market ten years ago with joint-venture partner Tata Consumer
Product Ltd. Over a decade, Tata Starbucks has offered a warm and welcoming third place
experience to partners, customers, and communities across India. Here are the top 10 things to
know about Starbucks journey in India as the brand celebrates its 10 th anniversary in the
market.

1. Tata Starbucks opened its first store in India in 2012

An architectural celebration of India’s rich and diverse heritage, the flagship Starbucks store
located in the historical Elphinstone Building, Horniman Circle, Mumbai, opened its doors to
customers on October 19th, 2012. The store was designed to reflect an open and eclectic design
aesthetic that embraces both Starbucks coffee heritage alongside local culture and aesthetics,
fostering moments of connection amidst the signature Starbucks Experience. After a decade-
long journey of elevating coffee and connections, the Fort store has now evolved into India’s
first Starbucks Reserve® Store.
2. First Starbucks Reserve® Store in India offers a multisensory coffee experience

Covering almost 5,200 square feet, the new Starbucks Reserve® Store is designed to bring the
coffee experience to life for customers. The premium coffee experience unique to Starbucks is
evident in the new Reserve Store’s multisensory aesthetics. As soon as customers enter the store,
they are greeted by the rich aroma of coffee and the monolithic terrazzo Reserve bar handcrafted
by local artisans. Highly-trained black apron coffee masters serve some of the most exquisite and
rarest coffees in the world through a variety of brewing methods. The Starbucks Reserve® Store
is an elegant and welcoming space that create unique moments of connection with our customers
through the artistry of coffee.

3. There are more than 300 Starbucks stores in India

Since opening the first Starbucks store in India in Mumbai, Tata Starbucks has continued to grow
and expand to new cities. Now, Tata Starbucks operates in over 36 cities through a network of
over 3,800 partners (employees). With the brand’s entry into 14 new cities in 2022, this marks
Starbucks largest store expansion in a single year in India. In September 2022, Tata Starbucks
passed the 300-store milestone with the opening of the first Starbucks in Dehradun city.
4. A celebration of India’s coffee heritage with two special blends

Created in honor of Starbucks first anniversary in India, India Estates Blend was launched in
2013. Honouring the market’s long-standing coffee heritage and its coffee growing communities,
this coffee comes from the estates in Coorg and Chickmagalur—the birthplace of coffee in India.
The first whole-bean coffee to be entirely sourced, roasted, and packaged in India, India Estates
Blend was later joined in 2020 by Diwali blend.

Diwali Blend was the first ever Starbucks coffee dedicated to an Indian festival and was a tribute
to the region’s deep coffee heritage and expertise, made with hand-selected coffee from
Valparai, Jumboor and Suntikoppa estates in the verdant hills of Karnataka and Tamil Nadu. The
unique blend features a balanced acidity, warm notes of cocoa, a syrupy body with notes of
chocolate and hints of spice and stone fruit. The package design depicts themes of light and
illumination, with images of lanterns and elaborate traditional patterns.

Launching to celebrate Tata Starbucks 10th Year Anniversary is Diwali Blend – Starbucks®
Blonde Roast. Hand selected from Mylemoney and Jumboor Estates in India, this bend is truly
an aromatic treat and will be available for a limited time at select stores across India.
5. Plant-based innovation offers customers more lifestyle choices

As customers in India look to explore more plant-based food options, Tata Starbucks teamed up
with Imagine Meats, a local plant-based meat start-up to introduce Starbucks vegan menu, which
includes the Vegan Sausage Croissant Roll, Vegan Hummus Kebab Wrap, Vegan Croissant Bun
and more. The newly-launched vegan food menu provides more options for customers, in
addition to Starbucks existing beverage customization options with plant-based dairy alternatives
such as almondmilk, oatmilk and soymilk. As customer interest in vegan choices continues to
grow, Starbucks remains committed to introducing more delicious options for customer to
choose from.
6. Customers enjoy seamless new ways to personalize their Starbucks Experience

Customers in India have more ways than ever to enjoy the Starbucks Experience, with the launch
of several digital platforms and services. My Starbucks Rewards™, the Starbucks loyalty
program which offers members exclusive and personalized benefits, was introduced to customers
in India in 2014 and currently has over 1.3 million highly engaged members. In 2020, the brand
launched its Mobile Order and Pay feature for My Starbucks Rewards™ members, allowing
them to place their orders anytime, anywhere and collect their favourite Starbucks beverage on
the go. Tata Starbucks also partnered with delivery partners Swiggy, Zomato, and e-commerce
platform Flipkart, offering seamless online delivery service to customers. Customers on the go
can also stop for a quick break to enjoy their Starbucks favorites at the Dhillon Plaza drive-thru
store and enjoy the added convenience of picking up their orders from their cars.
7. Tata Starbucks invests in partner wellbeing

Since entering the market, Tata Starbucks has invested in the wellbeing of partners with
innovative industry-leading benefits. This week, the company announced an expanded insurance
option for the parents of partners, one of the most requested benefits across the market. Starting
in December, baristas and shift supervisors who elect qualifying plans for their parents will have
70% the premium covered by Tata Starbucks, or fully covered for eligible partners with a tenure
of more than two years.

Previously, Tata Starbucks became the first food and beverage company in India to establish a
company-wide five-day work week for all partners. The company also embraces flexibility
through its ‘connected workplaces’ program, where its non-retail support partners work in
hybrid, field support and remote roles, and store partners can experience both part-time and full-
time roles.

Tata Starbucks also provides meaningful opportunities and comprehensive benefits for partners
including providing a graduation support program to all its full-time and part-time partners. The
company offers many health and wellness programs including free mental and emotional
counselling to partners and their family members, and an optional company-subsidized parental
insurance program. In 2021, Tata Starbucks inaugurated the Two-Wheeler Mobility Support
Program to help partners purchase a two-wheeler vehicle for professional or personal use,
enhancing their independence and commuting experience.
8. An inclusive and diverse workforce with an emphasis on gender equality

Tata Starbucks is committed to empowering a diverse workforce and equal opportunity for all
partners. The company has set a goal of achieving 40% gender diversity by 2022 through
programs like Brew of Balance, which provides opportunities and flexible employment options
for women returning to the workforce from parental leave or career breaks. In 2019, Tata
Starbucks notably achieved 100% pay equity for men and women, gaining recognition as one of
the top 75 best workplaces for women in India by the Great Place to Work Institute. Further
strengthening opportunities for women partners, Tata Starbucks has opened 15 stores run
exclusively by women, and provides safe and convenient transportation for women on select
routes working later hours. To accelerate the representation of women in leadership roles, the
organization has stood up corporate mentoring opportunities. This year, Tata Starbucks also
introduced the Care for Caregivers program, which offers benefits like need-based transportation
reimbursement support for expecting mothers, caretaker support on official trips and role-based
flexible working arrangements for new mothers.
9. Starbucks gives back to local causes

Since entering the market, Tata Starbucks has been committed to creating opportunities to
empower and transform the lives of girls and young women in India through education. In 2020,
the company launched the Tata Starbucks Empowering Girls and Young Women program in
collaboration with non-profit organizations Educate Girls and VIDYA India, through which each
of the Starbucks stores across India, sponsors and supports the education of a girl in primary
school, and partners also volunteer in imparting basic language, numeracy and life skills to the
young girls. The program aims to support 2,000 young women through education, financial
empowerment, and skills development, and in addition each Starbucks store across India
sponsors and supports the education of a girl in primary school.

Additionally, through a Global Community Impact Grant from The Starbucks Foundation, Tata
Starbucks and The Starbucks Foundation are supporting the Trust for Retailers & Retail
Associates of India (TRRAIN) initiative to provide vocational skills training for 1,000 young
women from underserved communities who are training for careers in the retail and food and
beverage industries.
10. A long-term commitment to India

Since entering the market in 2012, Tata Starbucks has remained committed to bringing a warm
and welcoming Starbucks Experience across India, by supporting our passionate partners and
creating meaningful moments of connection over coffee. After a decade of growth and positive
impact in India, we are excited to continue our growth journey and bring more value to our
partners, customers and communities. As Tata Starbucks CEO Sushant Dash has said, “At
Starbucks we don’t see just customers. We see people.”
ETHICAL SOURCING
Sustainability is at the Heart of Starbucks
Coffee Sourcing
In Indonesia, in North Sumatra, where the temperature routinely hovers in the 70s and low 80s,
the rain falls reliably and the half-days of sun bake the earth at the 4,000-foot-plus elevation,
Wahana Estate occupies a sweet spot for coffee cultivation: coffee cherries, the deep red fruit
that clusters along the branches of coffee trees, are harvested year-round.

The beans are so distinctive that many of them are funneled into the Starbucks Reserve program,
the company’s premium coffee line. But just because coffee-growing conditions are favorable
today doesn’t mean that will always be the case or that farmers are necessarily experts in
growing coffee either sustainably or ethically. That’s where Starbucks steps in, laying out
guidelines for growing, processing, quality and sourcing that ensure each cup meets Coffee and
Farmer Equity (C.A.F.E.) Practices.

Developed in collaboration with Conservation International, a nonprofit committed to

environmental protection, C.A.F.E. Practices launched in 2004 as a comprehensive set of social,
economic, environmental and quality guidelines that dictate how coffee should be ethically
sourced. The guidelines help Starbucks evaluate supply chains — which can consist of hundreds
or even thousands of farmers—to determine which ones produce the highest quality and most
socially and environmentally responsible coffee. A network of third parties independently
evaluates performance.

“C.A.F.E. Practices is, we believe, the right way to grow coffee,” said Kelly Goodejohn, director
for Starbucks’ ethical sourcing programs. “Ultimately for the consumer, this translates into the
finest cup of coffee that also supports farmers.”

About 125 million people earn their livelihood by growing or trading coffee. In 2016, Starbucks
purchased more than 600 million pounds of green Arabica coffee, 99% of which obtained the
C.A.F.E. practices seal of approval.

Among them are beans from Wahana Estate, which was started by Dianto Gho’s parents in 2005.
Wahana’s 175 farmers grow sweet potatoes, green beans and radishes, but more than half of the
1,126 acres are devoted to coffee. Gho, who as the farm’s sales director manages Wahana’s
sustainability program, says that C.A.F.E. Practices standards are rigorous but worthwhile.
“C.A.F.E. Practices are a lot of work, but they improve quality and help farmers be better at what
they do,” said Gho, who implements the guidelines at Wahana and welcomes external groups of
farmers to the estate, where they learn about the verification process and sustainable farming.
Social, Economic and Environmental
Responsibility Are the Pillars
The C.A.F.E. Practices checklist is extensive, covering three main areas: People, Planet and
Product.

Farm workers are the focus of the first category, which examines wages, benefits, medical care,
education for resident and migrant workers’ children and living conditions to make sure they
conform with national laws and international conventions. There is a zero tolerance policy for
child labor, for example.

Environmental concerns such as soil care and deforestation, water use and conservation, energy,
wildlife preservation and agrochemical use falls under the Planet division.

And Product emphasizes both “cup quality” — essentially taste — and the economics of coffee-
growing to make sure that farmers are being paid fairly.

While there are various other socially responsible designations for coffee growers, C.A.F.E.
Practices is a comprehensive program that not only sets minimum expectations of its suppliers
but promotes continuous improvement through best practices in sustainable coffee production.
The program also enables Starbucks to gain insight into the challenges faced by farmers in
different coffee-producing regions. That enables Starbucks to customize its support for farmers,
whether that means financial assistance from the Global Farmer Fund through a loan, providing
healthy coffee trees or technical support through a Farmer Support Center. In turn, that fine-
tuning results in enhanced coffee yields. “We expect supply chains to continue to improve over
time, and we offer the support and tools for them to do so,” said Goodejohn.

Farmer Support Centers (FSC) are one of the key ways that Starbucks encourages continuous
improvement and production of high-quality coffee, even for those farmers who are not yet
C.A.F.E. Practices-verified.

That was the experience of Aime Gahizi, who co-owns Gitesi Farm in the western Karongi
district of Rwanda with his father. Gahizi was the first farmer to knock on the door of Starbucks
Farmer Support Center in Rwanda when it opened in 2009. His father had taken over the farm
after his extended family was killed during the 1994 genocide against the minority Tutsi.

Gahizi’s aunt was the only survivor. Before her death several years after the genocide, she
beseeched Alex Gahizi, Aime’s father, to stay put. “This is home,” she said of their ancestral
land, with its verdant rolling hills and terraced slopes.

But neither Gahizi, 37, nor his father knew much about growing coffee. They had purchased a
small washing station to process their coffee cherries, which contain the coffee beans, but they
didn’t know how to properly operate the machinery. They ended up breaking the inner beans
instead of just removing the parchment, or outer skin.

“We worked with him to teach him farm best practices and increase productivity and quality
control,” said Julianne Kayonga, regional manager of the FSC in Rwanda. “We showed him that
quality begins on the farm.”

For eight years, the specialists at the FSC worked with Gahizi as he pursued C.A.F.E. Practices
status, which he recently attained. He learned how to protect his 15,000 coffee trees from disease
and how to properly handle wastewater from coffee production, as well as how to deploy worms
that Starbucks provided to make fertilizer using the byproducts from processing the coffee
instead of relying on chemicals. “We have learned how to treat our coffee better,” said Gahizi.
“Now we are competitive in the market.”

That’s the goal, said Goodejohn. “We’re willing to invest the time to support farmers who want
to learn and become better at growing coffee,” she said. “At Starbucks, it’s one of our core
missions and values to support producers growing coffee in the most sustainable way. As a
business, we are growing. We continue to look for the highest quality coffee grown in the most
sustainable way. We can’t assume it’s going to be there tomorrow, so we make the investment
today.”
Third-Party Scrutiny
Getting the C.A.F.E. Practices green light is a lengthy process; quality and transparency are the
initial two criteria. A supply chain that wants to sell to Starbucks starts by sending a coffee
sample to a discerning “tasting team” in Switzerland. Supply chains whose coffee meets quality
standards must provide extensive documentation and receipts showing how the price Starbucks
pays gets to the farmer. And they have to meet the “People and Planet” social and environmental
expectations.

Third-party inspection agencies, overseen by SCS Global Services, conduct the C.A.F.E.
Practices audits of supply chains seeking approval under the program, visiting a proportion of the
farms within a particular supply chain. Inspectors are paid to be picky: Are water sources being
protected? Is there adequate biodiversity? Are pest management methods appropriate?

Inspectors interview workers, asking how much and how often they’re paid and what their living
quarters look like. At coffee mills, inspectors make sure that water used to wash and depulp
cherries is treated before being released back into the environment.

All this data and more is fed into a computer program, which generates a report and score that
determines whether C.A.F.E. Practices status is awarded. Verification is not a one-time deal;
supply chains must go through the process every one to four years, depending upon how high
they score each time.
The copious amounts of data are also used to guide Starbucks’ support efforts. In Mexico, for
example, reports revealed low yields. Trees were not producing as many cherries as expected, so
Starbucks established a Farmer Support Center to assist with technical training and donated
millions of coffee trees to producers who were impacted by the recent Coffee Leaf Rust (Roja)
fungus outbreak. In Indonesia, the Starbucks Foundation is supporting the building of clean
water systems — 50 to date — so women and girls in coffee farming communities don’t need to
walk miles for water.

And in North Sumatra, Farmer Support Center agronomists work with smallholder farmers to
improve coffee yields through soil sampling and application of fertilizer, as well as continuous
training on pruning and renovation.

Throughout, Starbucks gets support from Conservation International (CI) to ensure that it’s
addressing a broad range of concerns. Starbucks might seek CI’s input about trends in shade
canopy — maintaining shade trees in coffee fields. Or it might ask in which regions CI is seeing
deforestation.

“C.A.F.E. Practices started from a social mindset, and it moved from there to incorporate
sustainability goals,” said Bambi Semroc, who oversees corporate partnerships for CI’s global
coffee programs. “Starbucks was progressive in terms of taking the standards and principles of
sustainability and turning that into principles for good practices.”
Ensuring the Future of Coffee Farms
The journey a coffee bean follows from farm to cup is an arduous one.

It usually begins high in the hills of the Coffee Belt, a band that wraps around the Earth’s middle
between the Tropics of Cancer and Capricorn. Bucket by bucket, the beans are hand-picked and
processed before trundling down winding roads to cargo ships destined for roasting plants and
cafés around the world.

To get the best beans, buyers from Starbucks have traveled to the source since the first store
opened back in 1971. They journeyed to far-flung farms in places in Latin America, Asia and
East Africa, taking time to get to know farmers and their communities along the way.

When Starbucks launched its C.A.F.E. Practices sustainable sourcing program in 2004, the
company knew that building on these personal relationships would be critical to the program’s
success. It opened its first Farmer Support Center that same year in San José, Costa Rica, and
hired a team of agronomists to bring farmers into the program.

Carlos Mario Rodriguez, director and global head of coffee research and development for
Starbucks, was part of that first Farmer Support Center agronomy team. He drove his pickup
truck over countless miles of narrow roads to visit farmers and help them with a range of
sustainability issues and ensure a long-term supply of quality coffee. He helped them set up their
own test plots, showed them how to space trees correctly and offered suggestions to manage
erosion and reduce the use of pesticides.
 “I think it’s very important for customers to know how difficult it is to produce high-quality coffee,”
he said. “It’s critical that we support the farmers.”

William Chacon, owner of the Café Las Peñas farm in Sabanilla, Costa Rica, has been working
with Starbucks agronomists for more than 10 years, even when his farm is not selling to
Starbucks.

“There are many problems related to deforestation, and the coffee gets damaged by disease, and
so the quality suffers too,” said Chacon. “With Starbucks help, we are producing new varieties of
coffee. The quality is good because the leaves and the plants grow healthy.”

PLANTING COFFEE SEEDS

In the Farmer Support Center’s first year of operation, 43.5 million pounds of green (unroasted)
coffee were purchased from C.A.F.E. Practices-approved suppliers, representing 14.5 percent of
total coffee purchases. In the 15 years that followed, purchases under the program continued to
grow and Starbucks expanded its global network of farmer support. A satellite location in
Guatemala City opened in 2006, followed by Rwanda in 2009, Tanzania in 2011 and Colombia
in 2012. Field by field, farm by farm – this new approach to sustainable sourcing was taking
root.
 In 2012, Starbucks opened its sixth Farmer Support Center, and first in Asia, in Yunnan, China’s
Pu’er region. Alan Tong was the first agronomist at the China Farmer Support Center, starting
with just 25 coffee growers.

Since then, he and his team have trained nearly 10,000 farmers in China in sustainable farming
practices and 1,200 farms are now verified through C.A.F.E. Practices. They are also putting
resources toward creating pathways out of poverty in coffee farming communities across the
region.

SETTING THE BAR

“I made up my mind, someday, Starbucks will be

the benchmark for Yunnan coffee,” he said.

FROM FARM TO CUP

Victor Trejos, the farm manager at

Hacienda Alsacia, Starbuck's coffee
farm in Costa Rica.
COMING FULL CIRCLE WITH SUSTAINABLE COFFEE
FARMS
I can show [farmers] how we have been doing things,” said Victor Trejos, general manager of
Hacienda Alsacia. “How we have been planting, how we fertilize, soil tests … and how they can
do the same.”

The farm includes 14 hectares dedicated to research. It’s a testing ground to push the boundaries
of agronomy research to breed trees that are resistant to coffee leaf rust, or roya, which is
ravaging coffee crops in Latin America. The team also analyzes soil, fine tunes pruning
techniques, and supports farmers in other ways to increase coffee trees’ quality and productivity.
Its findings aren’t kept in a company vault; they are shared freely with researchers and farmers
everywhere.

To date, Starbucks has trained more than 52,000 farmers with free access to education and
resources through its Farmer Support Centers, with a goal of reaching 200,000 farmers by 2020.
Its aspiration is to make coffee the world’s first sustainably sourced agricultural product.

But for Rodriguez, the accomplishment is best measured one farm, one farmer at a time.

“To me, as a professional, as a partner, it’s the best part really when you start working with a
particular farmer and see that they are improving their living conditions and being able to keep
producing coffee as a good business,” he said. “That’s the best. It’s really something that
motivates us."
Helping Coffee Farmers Weather Climate
Change
Coffee Farms Around The World

When Sergio Alvarez, a senior coffee developer at Starbucks, returned to the mountains of
Chiapas, Mexico for the first time since he was a child, he couldn’t believe what he was seeing.

Lining the roads were fields of coffee trees decimated by coffee rust, their leaves dotted with
holes and flecked with the life-choking orange fungus. And the blue-green mountains he
remembered were licked with flames, their billowing smoke clinging to the hillsides.

“Coming back after all of these years,” Alvarez said. “I was able to see the real effect and impact of
climate change. I could really see that the landscape is changing. It’s happening all over the region.”

In the town of Sierra Moreno, farmers used to produce 50 bags per hectare each year. Now they
are producing three.

Farmer Luis Dominguez describes the impact as a total catastrophe. “The rust disease happened
four years ago, and we couldn’t produce anything.”

Tatiana Ramos, executive director of Conservation International-Mexico, sees a clear link

between coffee rust and climate change. “Most of the production was lost in a lot of countries
and the reason why these fungi were so aggressive was due to the drastic changes in weather in
the region,” she said.

Farmers who are not able to produce enough coffee to support their families could be driven
higher up the mountainsides in search of a more suitable climate, damaging the protective buffer
zones and protected forest. It’s a vicious cycle.

About 400 miles southeast of Chiapas, the Pacheco family in Jalapa, Guatemala found
themselves struggling with many of the same challenges.

“Leaf rust entered the country of Guatemala in the year 2012,” says Kevin Pacheco, a fourth-
generation coffee farmer. “Before the rust appeared, we had better coffee plantations. So, it is a
big problem.”

A 2016 donation to the Pacheco farm of 6,000 rust-resistant trees, as part of Starbucks’ One Bag
for Every Tree initiative (now the 100 Million Trees program), is helping. So far, more than 30
million trees have been donated in Mexico, Guatemala and El Salvador. This year in Guatemala,
the trees produced their very first harvest.
“Besides the changing climate, there have been diseases and pests. We adapt to them,” said
Pacheco.

More than 25 million coffee producers around the world are facing the impacts of a changing
climate. Conservation International and Starbucks, joined by more than 130 other organizations,
are working to help – with a mission to make coffee the world’s first sustainable agricultural
product. Today, 99 percent of the coffee Starbucks buys around the world is verified under its
Coffee and Farmer Equity (C.A.F.E.) Practices, which has helped farmers improve their
environmental performance and weather the impacts of climate change for more than 15 years.

“When you see the logo of Conservation International on a bag of Starbucks, I think it truly
means that we need to take our work in coffee-producing countries around the world very
seriously,” said Alvarez from Starbucks. “Every cup of coffee we serve is doing good. But that
alone isn’t enough. It’s the love of people, nature and coffee that can make the real difference.”

Sustainable Coffee Farms

Making coffee the world’s first sustainable product to improve the lives of at least one million
people in communities around the world.

Starbucks is dedicated to helping farmers overcome the challenges facing coffee communities.
We are committed to buying 100 percent ethically sourced coffee in partnership with
Conservation International. To improve productivity and sustainability, we share our research
and resources through our Farmer Support Centers—located in coffee-producing countries
around the world. They’re open to farmers regardless of whether they sell to us. Thanks to the
support of our customers, we’re also donating millions of disease-resistant trees to help farmers
fight threats like coffee leaf rust. And through our Global Farmer Fund program, we’re investing
$50 million toward financing for farmers, allowing them to renovate their farm or pursue more
sustainable practices.

Now we’re collaborating with the industry to make coffee the world’s first sustainable agricultural
product, as a founding member of the sustainable coffee challenge.

In total, Starbucks has invested more than $100 million in supporting coffee communities.
Collaborative farmer programs and activities – including Coffee and Farmer Equity (C.A.F.E.)
Practices, farmer support centers, farmer loans and forest carbon projects. All of these programs
directly support improving farmer livelihoods and ensuring a long-term supply of high-quality
coffee for the industry.

More than three years after reaching an industry milestone of 99% ethically sourced coffee,
Starbucks announced the launch of a traceability pilot program aimed to demonstrate how
technology and innovative data platforms can give coffee farmers even more financial
empowerment and share data along the journey of coffee beans within the supply chain.
The pilot allows Starbucks in collaboration with Conservation International, to explore how the
technology solutions will have a positive impact to farmers, and to assess the viability of scaling
the traceability technology and ensuring positive impact to farmers. True to its open-source
philosophy, Starbucks plans to share what it learns openly.

In deploying a comprehensive strategy, Starbucks is improving the resilience of our supply chain
and ensuring the long-term supply of high-quality coffees, as well as building stronger, enduring
farming communities for generations to come.

Making Coffee The First Sustainable Agricultural Product

We know that the most pressing issues in coffee can’t be solved by one company alone, and that
the best solutions require everyone coming together to collaborate in bringing about a better
future for farmers.

Our journey of ethical sourcing requires looking beyond our own supply chain. After achieving
our 99% ethically sourced milestone, Starbucks asked “what’s next, and how can we work with
the whole sector to get to 100% sustainable coffee?"

Starbucks is a founding member, alongside a growing coalition of industry leaders, of the

Sustainable Coffee Challenge, a call to action led by Conservation International to make coffee
the world’s first sustainable agriculture product. The challenge is convening the sector to sustain
the future supply of coffee while ensuring the prosperity and well-being of farmers and workers
and conserving nature.

The Sustainable Coffee Challenge, is a joint initiative of over 100 partners working together to
make coffee the world’s first sustainable agricultural product. Members include coffee
producers, retailers, traders, roasters, importers, industry associations, governments, donor
agencies and other non-governmental organizations (NGOs) that are building a sustainability
roadmap for achieving a fully sustainable coffee sector.

In 2017 the Sustainable Coffee Challenge launched its first action networks to coordinate
industry action and investment. By launching Collective Action Networks the Challenge will
advance sharing of experience and collaboration to significantly advance our progress toward
sustainable coffee production.

One of the first Action Networks tackles the issue around aging trees and a focus to support tree
replacement or rehabilitation. Starbucks commitment to providing 100 million trees to farmers
by 2025 has a cumulative effect when added to the work of The Sustainable Coffee Challenge
who is working on an industry wide effort to re-plant 1 billion coffee trees.
Starbucks Ethical Sourcing
Direct Link Between Success Of Coffee Farmers And Our Success

Helping people thrive helps ensure the long-term sustainability of the premium products we
provide.

Whether it’s arabica coffee, tea, cocoa or manufactured goods, we’re committed to offering
ethically purchased and responsibly produced sustainable products of the highest quality.

COFFEE

Making coffee the world’s first sustainable product to improve the lives of at least 1 million
people in coffee communities around the world.

TEA

Our Goal: 100% ethically sourced tea by 2020.

COCOA

Our Goal: 100% ethically sourced cocoa by 2020 for all Starbucks cocoa based beverages.

MANUFACTURED GOODS

From the merchandise on our shelves to the furniture in our stores or the aprons worn by our
baristas, Starbucks cares about the way in which these products are made, and about the workers
who make them.

How We Approach Ethical Sourcing

A Holistic Approach to Ethical Sourcing

We strive to cultivate lasting relationships with the people who grow our products and create our
manufactured goods as we work together to produce high-quality, ethically sourced products.
Our approach includes responsible purchasing practices, farmer support efforts, social
responsibility standards for suppliers, and environmental programs.

COFFEE

The cornerstone of our approach to sourcing coffee is Coffee and Farmer Equity (C.A.F.E.)
Practices, our comprehensive coffee-buying program that ensures coffee quality while promoting
social, economic and environmental standards. Developed in collaboration with Conservation
International, farms and mills are evaluated using a comprehensive scorecard of more than 200
indicators by third-party verification organizations, overseen by SCS Global Services. In 2012,
90% of our coffee was C.A.F.E. Practices verified. We have also offered Fairtrade coffee since
2000, and are now one of the largest purchasers of Fairtrade certified coffee in the world. In
2012, 44.4 million pounds (8.1%) of our coffee purchases were Fairtrade certified. We also
purchased 8.7 million pounds (1.6%) of certified organic coffee in 2012.

In 2012, 93% of our coffee was ethically sourced through C.A.F.E. Practices, Fairtrade and/or
other externally verified or certified programs, with some coffees receiving multiple verifications
or certifications. It is our goal that by 2015, 100% of our coffee will be sourced this way.

In total, Starbucks has invested more than $70 million in collaborative farmer programs and
activities over the past 40 years, which include C.A.F.E. practices, farmer support centers, farmer
loans and forest carbon projects. In 2013, we decided to expand these efforts with the
development of a global agronomy center in Costa Rica. Read more about this effort here.

TEA

We’ve worked with the Ethical Tea Partnership (ETP) since 2005 to collaborate with others in
the industry, and to make sure that our tea is produced in a socially responsible way. In 2012,
100% of the estates that we sourced from were part of ETP and subject to audit under ETP’s
guidelines. Our work with ETP is complemented by our support of the CHAI (Community
Health and Advancement Initiative) project with Mercy Corps. Since 2003 CHAI has directly
impacted 75,000 people and their families in more than 200 farming communities in India and
Guatemala.

COCOA

Our approach to buying cocoa is also based on a commitment to ensuring a long-term supply of
high-quality, ethically sourced cocoa while contributing positively to the environment and to
cocoa-farming communities. Our Cocoa Practices program seeks to verify the supply chain for
the cocoa beans used in our beverages, with inspections performed by independent verifiers
overseen by SCS Global.

STORE MERCHANDISE

Whether it’s the merchandise on our shelves, the furniture in our stores or the aprons worn by
our baristas, we’ve set strong standards for our suppliers and offer them assistance when
corrections need to be made to their business practices. Adherence to those standards informs our
sourcing decisions and ensures we are working with suppliers who share our commitment to
ethical sourcing. Our buyers work directly with suppliers, negotiating contracts for the products
we need in our operations or sell to our customers.
FARMER SUPPORT

We know our success as a company is linked to the success of the thousands of farmers who
grow our coffee. Starting in 2004 with our first farmer support center in Costa Rica, Starbucks
agronomists collaborate directly with coffee farmers to encourage responsible growing practices
and improve the quality and size of their harvests. We have continued to expand the program,
and share our coffee knowledge with farming communities through our satellite office in
Guatemala City and additional farmer support centers in Kigali, Rwanda, and Mbeya, Tanzania.
In 2012 we opened new centers in Manizales, Colombia and Yunnan Province, China.
Ultimately, these efforts can help farmers earn better prices and become more resilient, long-
term producers.

In 2013, we continue d to expand our $70 million comprehensive ethical sourcing program with
a new farming research and development center in Costa Rica. We are adapting an active 240-
hectare farm located on the slopes of the Poas Volcano into a global agronomy center. In
addition to supporting resiliency for farmers around the world, this farm will also influence the
development of coffee varietals based on the insight offered through soil management processes.

FARMER LOANS

Providing access to credit at reasonable terms is a critical aspect of our farmer support model.
Our goal is to invest in farmers and their communities by increasing our farmer loans to $20
million by 2015. In 2012, we increased our total commitment to $15.9 million, including an
additional $1.3 million placed in the Fair Trade Access Fund set up by Incofin Investment
Management, Grameen Foundation and Fairtrade International. The fund provides financial and
technical assistance to address the needs of smallholder farmers by investing in Fairtrade
producer organizations and cooperatives.

Starbucks Supply Chain Strategy

Starbucks is a well-known global coffee retailer and coffeehouse chain. The company is
renowned for its premium coffee and innovative customer service. Starbucks has consistently
invested in its supply chain strategy to maintain its competitive advantage. Starbucks’ Supply
Chain Strategy focuses on various aspects, such as efficient sourcing of coffee beans,
manufacturing, logistics, and distribution. The success of Starbucks can be attributed to its
supply chain strategy.

Starbucks’ supply chain strategy aims to ensure that customers get the freshest coffee and other
products while minimizing costs. Starbucks has a robust supply chain that can quickly respond to
changes in customer demand. The company utilizes technology and automation to streamline
operations, which helps them to manage their inventory efficiently. The company also has a
strong relationship with its suppliers, which helps them to get the best quality coffee beans and
other ingredients at the lowest cost. Additionally, Starbucks has implemented various strategies
to reduce waste and increase sustainability throughout its supply chain.
Starbucks’ supply chain strategy is focused on providing the best quality product while
minimizing cost and environmental impacts. The company constantly innovates and invests in its
supply chain to remain competitive in the ever-changing retail landscape.

Analyzing the Elements of Starbucks

Supply Chain Strategy
When analyzing the elements of Starbucks’ Supply Chain Strategy, it is essential to consider the
various components in place.

Starbucks sources the finest quality coffee beans from

sourcing around the world, ensuring that their customer get the
freshet and most delicious coffee.

Starbucks utilizes technology and automation to

MANUFACTURING streamline operations and ensure maximum efficiency
in their manufacturing process.

Starbucks has an extensive network of warehouses,

LOGISTICS distribution centres, and retail stores, which helps
them to quickly deliver products to customers.

Starbucks has a wide range of retail outlets, both

DISTRIBUTION physical and online, which helps them to reach
customer in a timely and cost-effective manner.

Firstly, Starbucks has a highly efficient sourcing process. The company sources the finest coffee
beans from around the world, ensuring its customers get the freshest and most delicious coffee.
Additionally, Starbucks works closely with its suppliers and farmers to provide ethical and
sustainable production practices are followed.
Secondly, Starbucks has a robust manufacturing process. The company utilizes technology and
automation to streamline operations and ensure maximum efficiency. This enables them to
produce high-quality products in a timely and cost-effective manner.

Thirdly, Starbucks has an efficient logistic system. The company has an extensive network of
warehouses, distribution centers, and retail stores, which helps them to deliver products to
customers quickly. Additionally, the company utilizes advanced technology to manage
inventory and track shipments.

Lastly, Starbucks has an effective distribution strategy. The company has a wide range of retail
outlets, both physical and online, which helps them to reach customers in a timely and cost-
effective manner. Additionally, the company uses targeted marketing campaigns to increase
customer awareness and engagement.

Overall, Starbucks’ supply chain strategy is a well-rounded approach that enables the company
to remain competitive and ensure customer satisfaction.

The Role of Information Technology in

Starbucks Supply Chain Strategy
Information technology plays an important role in Starbucks’ supply chain strategy. The
company utilizes advanced technology and automation to streamline operations and ensure
maximum efficiency. This enables them to reduce costs, improve quality, and increase customer
satisfaction.

Starbucks utilizes a variety of information technology tools to manage its supply chain. This
includes enterprise resource planning (ERP) systems that help the company track and manage
inventory levels. Additionally, the company utilizes advanced analytics tools to monitor
performance and customer demand.

The company also utilizes various digital tools to manage its logistics. This includes GPS
tracking systems enabling the company to track shipments in real-time and make necessary
adjustments. Additionally, the company uses automated robots to sort and package products for
shipment.

Overall, Starbucks’ use of information technology has enabled the company to efficiently
manage its supply chain and remain competitive in the ever-changing retail landscape.
THE CHALLENGES AND OPPORTUNITIES FACING
STARBUCKS SUPPLY CHAIN STRATEGY
Starbucks’ supply chain strategy faces many challenges and opportunities. On the one hand, the
company must continually invest in technology and automation to remain competitive and ensure
customer satisfaction. Additionally, Starbucks must ensure that its suppliers follow ethical and
sustainable production practices.

On the other hand, there are also opportunities for the company to increase efficiency and reduce
costs. For example, the company can utilize data and analytics to optimize its supply chain
operations and make strategic decisions. Additionally, Starbucks can collaborate with its
suppliers to develop more sustainable and cost-effective production processes.

Starbucks’ supply chain strategy faces both challenges and opportunities. The company must
continually innovate and invest in its supply chain to remain competitive in the ever-changing
retail landscape.

Conclusion
Starbucks has been successful in its supply chain strategy, and it is easy to see why. By
leveraging technology, focusing on efficiency, and prioritizing quality, Starbucks has managed to
create a supply chain that is both cost-effective and dependable. In addition, Starbucks has
developed strong partnerships with its suppliers, which has enabled it to keep its production costs
low.

If you want to ensure your supply chain is as effective and efficient as possible, consider using
a digital platform forwarder with an online platform and mobile app. With different platform
service, you can track shipments, manage inventory, reduce costs, and improve customer service.
With a comprehensive supply chain strategy, you can ensure your products get to your customers
on time and at the right price.