Starbusks And Conservation International

Topics: Coffee, Starbucks, Coffea arabica Pages: 68 (12361 words) Published: March 25, 2015
9-303-055
REV: MAY 1, 2004

JAMES E. AUSTIN
CATE REAVIS

Starbucks and Conservation International
Aligning self-interest to social responsibility is the most powerful way to sustaining a company’s success. —Orin Smith, President and CEO, Starbucks Coffee Company
In mid-2002, the management of Starbucks, the world’s leading specialty coffee company, was examining its collaborative efforts with the environmental nonprofit Conservation International to promote coffee-growing practices that would enhance the environment and produce high-quality coffee beans. This four-year-old alliance was an integral part of Starbucks’ business and social strategy of strengthening the well-being of small coffee producers. These efforts were taking place during a tumultuous time for the coffee industry. Overproduction had caused world coffee prices to plummet, creating economic hardships for growers. Concerned social groups had launched the Fair Trade movement to pressure coffee buyers to pay higher prices to small growers. Environmental groups were clamoring about habitat destruction arising from production practices. At the same time, Starbucks had led the explosive growth of the specialty coffee segment of an otherwise stagnant coffee market.

The industry situation and the company’s leadership position posed significant challenges for Starbucks. It was a lightning rod for nonprofit groups seeking solutions to social problems in the coffee industry. Aside from having to manage these pressures, Starbucks’ own values motivated it to find innovative solutions that would create a more economically, environmentally, and socially sustainable coffee system. It was assessing the role of the alliance with CI as part of that strategy.

Starbucks Coffee Company
Named after the first mate in Herman Melville’s Moby Dick,1 Starbucks Coffee Company was founded in 1971 when its first store, Starbucks Coffee, Tea and Spice, opened in Seattle. In its first year, the company bought its beans from Alfred Peet, who had been importing arabica coffees since the 1950s. His store in Berkeley, California, which bore his name, sold a variety of dark-roasted

1 Brian Nattrass and Mary Altomare, Dancing with the Tiger: Learning sustainability step by natural step (New York: New Society Publishers, 2002), pp. 100–139.
________________________________________________________________________________________________________________ Professor James E. Austin and Senior Researcher Cate Reavis, Global Research Group, prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management.

Copyright © 2002 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

This document is authorized for use only in QATAR CORP STRAT - 4F52PROJ04 by Pierre DUSSAUGE from December 2011 to June 2012.

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Starbucks and Conservation International

coffees and teas. During the next year Starbucks set up its own roasting operation and began selling its own roasted blends.
In 1982, Howard Schultz2 joined the company as head of marketing and overseer of the retail business. Schultz wanted to extend Starbucks’ reach by adding espresso bars in its stores. Starbucks owners rejected the idea and, in 1984, Schultz left the company to start his own line of espresso bars, called Il Giornale. By mid-1987, Starbucks owners were looking to sell the company, and in August 1987 Schultz acquired the entire operation for $3.8...
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