Poor Farmer

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 ...

By Philip Ngunjiri Nation Media December 23, 2007 IT IS THE YEAR 2005, AND A COFfee farmer somewhere in the highlands of Ethiopia is saying he has uprooted his coffee crop to replace it with khat (miraa). Reason: He can get a comparatively higher price for the latter, compared with the low price he is getting for coffee. Fast forward to 2006 and you are at the New York Board of Trade, a commodity trading floor in New York City, in the US, where the international benchmark price of coffee is set each business day based on weather, supply and demand. These are scenes from Black Gold, an award winning documentary. The film contrasts the enormous power and wealth of the multinational coffee companies with the plight of poor Ethiopian coffee farmers as they struggles for a better life. The documentary explores the effects of international prices (which by 2006 were at an all-time low) on coffee growers. As the film unfolds, it is evident that despite the global coffee market being worth b...

Starbucks Corporation Chairman and Chief Global Strategist, Howard Schultz, came to visit Ethiopia a few months after his company signed a deal with Ethiopia recognising the trademark right the latter has over three of its coffee varieties. He met with Ethiopian authorities, including Prime Minister Meles Zenawi, and gave a lecture on balancing "business with benevolence" on Friday, November 30, 2007, at the Sheraton Addis. In all these, neither Mr. Schulz nor Ethiopian authorities have revealed the content of the agreement they have signed, observes Shlomo Bachrach. Employed by Ethiopia's trademarks advisor, LightYears IP, and resigning before the Starbucks negotiations began, Mr. Bachrach has a lot more questions than answers. - Addis Fortune By Shlomo Bachrach Addis Fortune December 2, 2007 Starbucks deserves full recognition for its announcement of a proposed Farmer Support Centre to be established in Addis Abeba. When completed, it will represent tangible compensatio...