Poor Farmer

In a joint statement with Ethiopia, Starbucks announced earlier this month that they have agreed in principle to sign a licensing agreement. That was a big u-turn on the company’s position regarding Ethiopia’s efforts to trademark its famous coffee marks, Harar , Sidamo , and Yirgacheffe . Many people welcomed the decision though with optimism. At the moment, I was not sure what they meant by "agree in principle;" now, I am more eager to read a copy of the signed agreement. The company, seems to be busy spending more on the future. Understandably, the management wants to leave this story behind at any cost and move on. The discomfiture that other multinational companies, such as Nike, had faced in the past, after giving in to high-profile disputes, is the last ditch one would be willing to do what it takes and get over it. Albeit, typical of corporate giants, Starbucks is not going to spend a penny without a guaranteed stream of inflow of benefits to equate the associate...

By Todd Sullivan 24/7 Wall St May 17, 2007 There have been a slew of articles the past week about the price of Starbucks ( SBUX ) shares and whether or not now is the time to buy them. Let's look closer. Currently Starbucks shares trade at $28 for a PE ratio of 31 times this years 89 cents a share earnings estimate. Many people consider this a bargain saying "Starbucks shares have not traded at this level since Oct. 2005." But is Starbucks situation now the same as then? In a word, no . [ emphasis in the original ] If they hit their EPS growth goal, Starbucks will grow earning this years 18% vs the 30% they grew them in 2005 and as each day goes by, that "if" becomes larger and larger. A closer look at last quarters earning shed some light on upcoming difficulties. Earning were met chiefly due to an unusually large $500 million share buyback and enabled Starbucks to gloss over the fact that margins continue to deteriorate. This buyback become larger whe...

By Andrew Cawthorne Reuters May 17, 2007 ADDIS ABABA, May 17 (Reuters) - Ethiopian coffee exports are on course to rise about 2 percent to some 187,000 tonnes in the 2006/07 season, worth around $450 million, the head of the local exporters' association said on Thursday. "As I see from sales quantities so far, it will be a little bit higher than last year, around two percent," Abdulrezak Sherif, new chairman of the Ethiopian Coffee Exporters' Association, said at his office in Addis Ababa. "The market is better than last year. Prices have improved. There is more demand. Maybe we will this year reach $450 million, I think." Africa's largest coffee producer and the birthplace of the bean, Ethiopia exported 183,000 tonnes worth $427 million in 2005/06. Total annual coffee production, including that used for domestic consumption, was 330,000 tonnes last season, and Abdulrezak said the 2006/07 outturn would be similar. The chairman said he had taken over the ...

Starbucks Launches Charitable Campaign, Intros New Beverage Line Fast Casual SEATTLE — Starbucks Corp. has launched a line of new orange-flavored beverages in addition to its signature celebrity “Green Umbrellas for a Green Cause” campaign and auction. The beverage line includes the new Orange Mocha or Orange Crème Frappuccino blended crème. Additionally, Starbucks is offering all Frappuccino blended crème beverages in a new light version — with 1/3 fewer calories. Guests also can sip their Frappuccino blended crème under a Starbucks iconic umbrella. To kick off the start of summer, top Hollywood celebrities who share Starbucks passion for the environment have transformed a series of Starbucks green umbrellas into works of art. The celebrity signature umbrellas will be auctioned to the public beginning May 21. The proceeds from the “Green Umbrellas for a Green Cause” auction will be donated to Global Green USA — a national leader in advocating for smart solutions to global warming. In...

For status of the Starbucks-Ethiopia deal, click here CSRwire May 14, 2007 WASHINGTON DC - The Ethiopian fine coffee sector this week welcomes 2007 EcoQ Peaberry Award Recipient Sweetwater Organic Coffee Company , Florida's vanguard Organic and Fair Trade Coffee Roaster, as the newest licensee to join the recently formed Ethiopian network of licensed distributors. "Sweetwater Organic is a company whose practices embody the sprit of collaboration and sustainable coffee development that Ethiopia's Trademarking and Licensing Initiative is really about. We are very happy to have them join in our network and contribute at this important and historic time. It is important to have roasters on board that pay attention and appreciate the flavor and quality of the fine coffees that Ethiopia produces," commented Getachew Mengistie, Director General of the Ethiopian Intellectual Property Office. The network of licensed distributors is a pioneering group of coffee companies who ...

It’s been 12 days since Starbucks and Ethiopia issued a joint statement saying that they have agreed in principle to sign a licensing, distribution and marketing agreement that recognizes the importance and integrity of Ethiopia’s specialty coffee names. After several months of uphill battle by development agencies, activists and supporters of Ethiopia's plan to trademark its marks, Starbucks has acknowledged a week ago Ethiopia’s ownership of its own coffee marks. “Ethiopia is recognized as the historic birthplace of coffee and the source of some of the finest coffee in the world,” said Howard Schultz, Starbucks chairman, on the press release. Negotiations have continued through last week between representatives of Ethiopia, currently in Washington D.C., and Starbucks officials. Details of the negotiations are not made public to date. The parties are expected to meet here in Seattle this week, reportedly as early as Wednesday, May 16th, for a signing ceremony. Starbucks has reaso...

This is the 5th and final part of the series that has been running for over four weeks. The series assesses Ethiopia’s coffee sector to understand the root causes of its problems and to point out remedial solutions based on the scholarly paper, “ Ethiopia’s Coffee Sector: A Bitter or Better Future?” by Nicolas Petit . In Part IV , we’ve discussed domestic coffee market reforms, constraints, and their impacts on the coffee sector. We’ve also discussed prospects for Ethiopia’s coffee. This current part points out what is being done and what can – and should – be done in order to revitalize the coffee sector in Ethiopia. My heartfelt thanks goes to my dearest friend who brought the paper to my attention. I am equally grateful of the generosity of Nicolas Petit and Blackwell Publishing Ltd for granting me access and permission to use the paper according to their terms of use. ----------------------- So, What Can Be Done? In Ethiopia, coffee is more important to the farmers than it is for...