Poor Farmer

Coffeehouse conundrum facing returning CEO Howard Schultz A Starbucks coffee shop in the financial district of Boston experiences a high volume of business during the noon hour Wednesday afternoon, Aug. 1, 2007. Starbucks is expected to release quarterly earnings on Wednesday. (AP Photo/Stephan Savoia) By Jasmin Aline Persch MSNBC January 29, 2008 Starbucks brought us the Italian coffee experience, teaching us to sip fancy espresso drinks in quaint cafes. Now the trendsetter is falling out of vogue — and some question whether the ubiquitous coffee chain can be cool again or will sink to a commodity. That’s the conundrum facing Howard Schultz who’s returning as head of Seattle-based Starbucks, which for years was hailed by customers, investors and business professors, alike. That changed recently: The company’s stock price was slashed almost in half this past year. And store traffic slipped last quarter for the first time since the company went public. Many trust, though, that Schultz...

Solomon Mburu Business Daily (Nairobi) via All Africa January 28, 2008 The deal to sell 100 per cent Kenyan roasted coffee to China has hit a snag following a surge in the prices of the commodity. Prices of Kenyan coffee have been rising since late last year, with Mbuni heavy and Mbuni light which are the cheapest coffees from Kenya shooting up from $ 50 and $70, to $75 to $100 per 50 kilogramme bag, respectively. The price rallies have been caused by concerns over reduced supply due to low production expected this season. Experts say changing weather patterns were responsible for the 20 per cent drop in production. It has now emerged that due to the unprecedented price increases, the deal to open up the Chinese market for Kenyan coffee will have to be delayed. This will consequently hold up efforts to diversify the export market for Kenyan coffee, ensuring farmers get better value from the crop. The Kenya Planters Co-operative Union (KPCU) which is spearheading the deal said renegoti...

By ELIZABETH M. GILLESPIE AP Business Writer The Seattle Times January 24, 2008 Neither Starbucks Corp. Chairman Howard Schultz nor the chief executive he recently replaced received bonuses last year, as the coffee retailer struggled with weak demand amid the U.S. economic downturn, high dairy and energy costs and growing competition from cheaper competitors. Schultz, who reclaimed the CEO title when Starbucks fired Jim Donald earlier this month, received compensation the company valued at $12.6 million in fiscal 2007, according to a filing with the Security and Exchange Commission on Wednesday. Schultz was paid a $1.19 million in salary, but his package for fiscal 2007, which ended Sept. 30, was boosted by stock options worth $10.6 million when they were granted and perquisites valued at $861,398. The perks included nearly $497,000 for personal security, $3,237 for health insurance premiums and an annual physical, $13,500 for retirement plan contributions, $155,100 for a personal sec...

By JANET ADAMY WSJ January 22, 2008 Starbucks Corp., the company that popularized the $4 cup of coffee, is testing a $1 cup of brew and free refills for drip coffee. The Seattle coffee giant is experimenting with selling a so-called "short" size drip coffee for $1 in the Seattle area, Starbucks spokeswoman Valerie O'Neil confirmed. The short size is an 8 oz. cup that is not officially on the Starbucks menu but has long been ordered by in-the-know patrons who want small drinks. Typically, a short, brewed coffee would sell for around $1.50, though that can vary by several cents depending on the store. Starbucks is also testing offering free refills for traditional brewed coffee, also in the Seattle area. Ms. O'Neil would not elaborate on the specifics of the tests or say how many locations in the Seattle area are doing it. She said the tests aren't indicative of any new business strategy. Starbucks has said that pressures on consumer spending have slowed customer t...

The franchise Second Cup is considering offering a fair trade option both on and off campus Image By: Laura Tomkins By Rebecca Vasluianu Cord Weekly ( http://www.cordweekly.com/ ) Jan 16, 2008 Scrutiny into Second Cup’s lack of fair trade options has become a local concern here at Laurier, as some students are beginning to realize that their beliefs concerning the coffee they drink are false. Groups like Fair Trade Toronto have released statements and issued protests criticizing Second Cup’s lack of fair trade certified coffee, and recently the issue has become a question at WLU. Wilfrid Laurier University Students’ Union (WLUSU) VP: University Affairs Lauren McNiven, for example, has become alarmed by the fact that many students and faculty have no idea that Second Cup is not fair trade certified. “I’ve talked to a lot of people who all cite Second Cup as being fair trade and that led me to go look on their website and read about it,” explains McNiven. “Usually, organizations will h...

Inside the New York Coffee Exchange Source: Coffee Research Institute via coffeeresearch.org There are two markets for coffee: the cash market and the futures market. The cash market is the market today. It is the price you would pay for coffee today if you could receive it today. The futures market is used to help determine the price for future deliveries. It is used to purchase a contract today to guarantee a future shipment of coffee. More importantly, however, the futures market for commodities like coffee is used to help protect against the wild variations that occur due to coffee market speculation. The latter reason will be explained in further detail through the help of an example. Futures Market: Coffee Exchange Analysis Assume it is currently May and assume the “C” market price for July shipment is at 95 cents/lb. Now pretend that today a coffee producer sells two units of coffee (1 unit = 37,500 lbs) to a coffee roaster or importer for 5 cents/lb over the “C.” The cof...

16 Part Curriculum For Grades 4 Through 9 Also Covers Cooperative Economics CSRwire January 16, 2008 WEST BRIDGEWATER, MA - In response to hundreds of requests from parents and teachers the Fair Trade pioneer Equal Exchange introduced today one of the first comprehensive Fair Trade curricula in the U.S. "Win Win Solutions: An Introduction to Fair Trade and Cooperative Economics" is designed for grades 4 through 9 and raises awareness of core issues concerning food production and global trade, and of the role of American consumers. The curriculum helps to demonstrate the link between personal actions and community efforts to create a more just and sustainable world. Win Win Solutions' four units and 16 classes incorporate participatory methods and satisfy many basic U.S. curriculum standards including Social Studies, Geography, Math, and Economics. "After 20 years of talking to and educating American coffee drinkers about Fair Trade, it's time we talked and listen...

By Issayas Mekuria Addis Fortune January 13, 2008 Thirty-three fledgling commercial coffee farms have established their own association - the Ethiopian Coffee Growers, Producers and Exporters Association - in a bid to sell their products directly to foreign importers without paying a cut to middlemen. The Ministry of Justice (MoJ) granted a certificate in recognition of the Association on December 6, 2007. The Association, comprised mostly of new farms, hopes to bring a landmark change to Ethiopia's export coffee business. Currently, producers sell their product to suppliers, facilitated by middlemen who exact commission, and then on to government auction centres. Finally, exporters buy at auctions and sell to foreign importers. Coffee leaves Ethiopian farmers about 17 cents per kilo, but nets the country on average 1.20 dollars per kilo. The Association hopes to narrow that gap. "The trouble of farmers is not only Starbucks; exporters, brokers and policies and rules of the go...

(l. to r.): Robert F. Bukaty / AP; Karen Bleier / AFP / Getty By BILL TANCER TIME January 10, 2008 Over my morning coffee (a grande nonfat latte), I read the news this week that a battle is brewing between Starbucks and McDonald's. According to the story, McDonald's is planning to capitalize on the public's willingness to pay $4 for a cup of coffee by hiring baristas and dropping espresso machines in 14,000 of their fast-food outlets. Meanwhile, Starbucks, with business lagging, is fighting back with an "if you can't beat 'em, join 'em" strategy, by offering heated breakfast sandwiches and adding drive-thru windows to some of their locations. I've always thought of these two chains as polar opposites — one designed as a sophisticated faux living room where customers could get a decent coffee drink and read their newspapers; the other, a riot of plastic-and-vinyl booths and bright fluorescent lighting where meals are counted in billions served. I wo...

SBUX vs. MCD 1-yr chart - Seeking Alpha By Bill Conerly Syndicated from Seeking Alpha blog January 09, 2008 I've used Starbucks' ( SBUX ) business strategy as a way to discuss the Trial and Error Economy. I'm not, by any means, the world's greatest expert on the company, but it provides a great vehicle for teaching about corporate strategy. Now, according to the Wall Street Journal, McDonald's ( MCD ) will sell premium coffee drinks made by baristas at most of their 14,000 stores. How should Starbucks react to the McDonald's threat? Here are some ways: 1. Do nothing. Best implemented with one's nose high in the air, saying that Starbucks customers would never buy coffee at McDonald's. Would work very well for three to six months. Ignores the reality that Starbucks' recent growth has come not from Volvo-driving college grads, but from lower-income, less educated people than they originally served. These are people comfortable at McDonald's. 2....

Trouble has been brewing for some time at iconic global coffee chain Starbucks' rapid expansion — which included outlets in Barnes and Nobles bookstores, product distribution in supermarkets and its own record label — has watered down growth in overall traffic. Alex Hofford / EPA Analysis By John W. Schoen MSNBC January 08, 2008 Is it the coffee? Or too many outlets? Or are cash-strapped latte drinkers simply having second thoughts about shelling out $4 for a caffeine fix that they can get from a fast-food chain for a lot less? Those are some of the questions facing Starbucks Chairman Howard Schultz as he returns to his old job as CEO to try to revive a company whose phenomenal growth and customer focus once made it the darling of investors, business school professors and consumers looking for a little bit of luxury from their daily coffee routine. Buffeted by higher costs, rapid store expansion, improved offerings at fast food competitors like McDonald's, and pressure on consu...

Starbucks's chairman Howard Schultz speaks during an interview with Reuters in Mexico City September 7, 2007. Starbucks Corp on Monday said its chief executive, Jim Donald, is leaving the company, effective immediately. Schultz, the coffee shop chain's founder and chairman, will take on the CEO role. REUTERS/Henry Romero By Nichola Groom Reuters January 7, 2008 LOS ANGELES (Reuters) - Starbucks Corp announced on Monday the immediate return of founder Howard Schultz as chief executive and the slowing of an aggressive U.S. expansion in a shake-up that sent its battered shares up nearly 7 percent. The move marks the return to daily management of the well-liked chairman, who is seen as the conscience of the company after he warned a year ago that Starbucks was losing its way. Investors have nearly halved the value of the world's biggest coffee chain to $13 billion in the last year in the midst of weak U.S. sales growth and encroachment by competitors. "The most serious ...

Cartons of McDonald's premium ground coffee are stacked up at the packaging line in Vernon, California March 26, 2007. McDonald's Corp is set to launch coffee bars with "baristas" serving cappuccinos and lattes, moving into direct competition with global coffee chain Starbucks Corp., The Wall Street Journal reported on Monday. REUTERS/Fred Prouser Reuters January 7, 2008 NEW YORK (Reuters) - McDonald's Corp is set to launch coffee bars with "baristas" serving cappuccinos and lattes, moving into direct competition with global coffee chain Starbucks Corp., The Wall Street Journal reported on Monday. McDonald's will install coffee bars at its 14,000 U.S. stores, incorporating theatrics similar to Starbucks' counters, displaying espresso machines and having baristas prepare drinks, the report said. The report, citing internal documents from 2007, said the move will add $1 billion to McDonald's annual sales of $21.6 billion. McDonald's will a...

Patrons sit inside a Starbucks in New York, Nov. 16, 2007. Photographer: Robert Caplin/Bloomberg News - Bloomberg By Duane D. Stanford Bloomberg January 02, 2007 Starbucks Corp., whose shares last year had the biggest annual decline ever, fell the most in 17 months in New York trading after Bear Stearns & Co. lowered its recommendation on the stock. The firm cut its rating on Starbucks shares to ``peer perform'' from ``outperform'' on concern that a decline in sales and higher food costs will hurt profitability at the world's largest chain of coffee shops. Seattle-based Starbucks has expanded its customer base to include ``less affluent'' coffee drinkers ``who react to economic pressures,'' Joseph Buckley, a Bear Stearns analyst in New York, wrote in a note to investors today. ``Dairy costs also remain stubbornly high and are likely to continue to significantly pressure margins in the March and possibly June quarters.'' The downgrade w...

By Tesfa-alem Tekle Sudan Tribune January 01, 2008 (ADDIS ABABA) — The Ministry of Trade and Industry said some 443.7 million USD has been earned from exported items in the last five months. "The income just collected is a 29% increase compared to an income collected last year over the same period of time" Public Relation Head with the Ministry,Haile Abebe said. He said coffee, oils seeds, khat, cereals, leather and leather products, gold and cut flowers have generated the highest earnings respectively. According to the Ministry Ethiopia expects to earn 1.7 billion USD income this Ethiopian budget year. The head said" 46,310 tons of coffee has been exported to various countries and brought 127 million USD." The volume of cotton, cereals, tantalum and beef and meat and cattle exported in the reported period shown a remarkable increase from the target set for the period. Hailu added. Ethiopia’s export trade is increasing at a high rate in the last three years and the ...