"They [Starbucks] have done a lot of good things, most notably in East Timor, which has some resonance with Australians, but the fact that they displayed that attitude towards the Ethiopians indicates to me that it is not particularly coherent and that they have some way to go," - Andrew Hewett, Oxfam Australia executive director
New Boss Out to Show Coffee Chain's Caring Side
Julian Lee
The Sydney Morning Daily
April 12, 2007
STARBUCKS is to mount a drive to capture the hearts and minds of Australians as part of a wider campaign by its new managing director to "educate" consumers about the company's social values.
Two months into the job Mark Ring says more could be done to play up the "commonality" of values he believes the company shares with Australians, namely a commitment to communities, the environment and fairness to its employees.
"There is scepticism out there," he said. "We are an American company and a large one … so people question your motives and it's our responsibility - something that I'm keenly focused on - to get them to understand how we reach out to the community."
In his first interview Mr Ring, a 12-year company veteran, said competition was "intense" in the $1.6 billion Australian coffee market as drinkers faced more choice per capita than in most markets.
The American said he was happy with the company's performance. When it opened in 2000 Starbucks failed to reach its target of shop openings, closed underperforming sites and shifted its strategy to smaller outlets.
Today Starbucks has 89 shops. It opened 25 in the year to September 30, 2006. It has since opened eight more.
Mr Ring would not comment on growth plans. "I'm greatly encouraged by what I see," he said.
Australian Coffee Traders Association president Andrew Mackay said: "There's no question that they've been doing it tough. You only have to look at the growth internationally to see that it's been pretty slow here."
Starbucks stores are all company-owned and profits, if any, go back to Seattle. Referring to this,, Mr Mackay said: "I think given a choice, which there is, people prefer to spend their hard-earned in the knowledge it's going to stay in Australia."
In the year to October 3, 2004, Starbucks' Australian sales rose by 17 per cent to $32.8 million but its losses nearly doubled to $26 million, according to the most recent documents.
Starbucks is now exploring drive-throughs - which have been successful in other markets, including the US - as it targets busy, car-bound Australians.
The first Starbucks drive-through, in Mount Druitt, was performing well, Mr Ring said.
Aside from identifying community-led initiatives for each of its shops, such as clearing areas of rubbish and reading to sick children, Starbucks wants to push its credentials as a buyer of Fairtrade coffee. Globally, 6 per cent of the 135 million kilograms of coffee it buys each year is Fairtrade, accounting for 16 per cent of all Fairtrade purchases.
Starbucks plans a major event for Fairtrade Fortnight in Australia, to be held next month, and will aggressively promote its two Fairtrade blends - Estima and Timor Lorosa'e - in its shops.
This comes after Starbucks dropped its opposition to Ethiopia registering trademarks for three coffee names - Sidamo, Harar and Yirgacheffe - which could give growers an extra $116 million a year.
Oxfam Australia executive director Andrew Hewett said the Starbucks stance in Ethiopia had been "inconsistent".
"They have done a lot of good things, most notably in East Timor, which has some resonance with Australians, but the fact that they displayed that attitude towards the Ethiopians indicates to me that it is not particularly coherent and that they have some way to go," he said.
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