Ethical Performance
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Starbucks brews up $30m more loan aid

July 2015

American coffee chain giant Starbucks is more than doubling the size of a loan program for farmers that it started seven years ago to help maintain its supply of ethically sourced coffee.

Its additional $30m pledge comes as coffee farmers in Central America and the Caribbean continue to struggle to recover from a devastating epidemic of coffee rust and deal with the impact of climate change on their crop.

The company says some 62 cooperatives in eight countries — representing more than 40,000 farmers — were aided by its initial outlay of $20 million in 2008.

“In 2015, we have achieved a number of milestones across our ethical sourcing initiatives but we know that the work isn’t done. This new investment demonstrates how we remain steadfast in our support of farmers around the world,” said Craig Russell, executive vice president of Global Coffee for Starbucks. “By providing access to capital, farmers have the ability to make strategic investments in their infrastructure, offering the stability they need to manage ongoing complexities so that there is a future for them and the industry.”

Starbucks’ first farmer loan investment was in 2000 with Root Capital for a project in the El Triunfo Biosphere Reserve in Chiapas, Mexico. This work helped establish a revolving line of credit focused largely on short-term financing for farmer cooperatives. Today, farmer financing has evolved to include medium and long-term investments in order to help provide the necessary stability to manage climate variables by supporting agronomy, restoration and infrastructure improvements.

The $50 million Global Farmer Fund aligns to Starbucks global sourcing strategy which includes purchasing coffee from more than 30 countries worldwide and offered to customers in single origin, blend and small-lot programs and beverages.

This year Starbucks verified 99% of its coffee as ethically sourced. For over 15 years, Starbucks has worked with Conservation International to design a rigorous set of methods to ensure environmental and social best practices are used in growing and processing coffee.

“Only through a collective approach that provides farmers with access to information, tools and financing will we be able to transition coffee - the most widely traded tropical agricultural commodity on Earth - to becoming the first sustainably produced commodity,” commented Dr. M. Sanjayan, executive vice president, senior scientist for Conservation International.

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