Colin's Analysis

Credit: Colin Nguyen is a Freshman at UC Berkeley. 

 

For my final project, I was instructed by Yuna to concisely summarize relevant info on sustainability and social good concerning Peets, Starbucks, and the coffee industry in general in the east bay.  My task was to conduct research, obtaining and summarizing information in mini paragraphs. The pages following this one contain my work, which includes sources, their respective summary/analysis, and a supplemental infographic.
As I dove into the history behind coffee, I got a look behind the scenes of the coffee shops I frequent. I read about and detailed the most recent social mission Peets had embarked on––”People and Planet,” where they connected sourcing the tastiest coffee with helping local economies thrive. In addition, I explored the waves of coffee and put a spotlight on the third wave of coffee, a new movement of coffee that has had significant impact on and for the future of the industry. Finally, I focused the last leg of my research on Starbucks, the largest coffee company in the world, which has taken many steps to integrate corporate social responsibility in its business practices.

 

Peet’s Social Good / History

Mazzoni, Mary. “Peet’s Wants Customers to Know That Coffee Can Change Lives.” Triple Pundit, 16 Mar. 2017 

This article details Peet’s commitment to the social good, specifically around its intimate relationship with its farmers. For one, some of the original coffee growers for Alfred Peet are still working with the company. The main initiative that Peets has is its People and Planet initiative, a special set of coffee that highlights its relationship with their growers and more importantly, the communities of their growers. Not only does Peets train its farmers to improve yields and quality, it encourages side projects and community development projects. With money pouring into local economies, farmers get a chance of upward mobility, as well as a chance to invest in their own projects such as building schools and power lines. One example is a collective of 200 women called Las Hermanas. With newfound economic strength, the women are funding essential youth and medical programs, improving the lives of their entire community. These examples highlight the benefits of focusing on more than just profits for a few, but on relationships and profits for many.

 

Wight, Andrew. “In Colombia, kids learn barista skills with the goal of saving the country’s coffee culture.” NBC News. Nov. 18 2018

This report explores one of  Peets partners, the “Coffee Kids” program. The aim of the program is to train kids at a young age the skills necessary to start businesses in the coffee industry, that can keep the industry thriving in their homes. Peets is investing in the industry long term by supporting the local economies of their coffee producers. By giving kids the skills they need to combat an evolving climate, in addition to seed money, Peets is supporting the crucial development of local business and entrepreneurship. This is reflective of a philosophy that aims for an economy based on reproduction, vs. extraction.

 

Waves of Coffee

 

“American Coffee History.” Esselon Cafe. 2017,

The History of First, Second, and Third Wave Coffee.” Craft Beverage Jobs. 17 April 2016

Baertlein, Lisa. “Peet’s rides coffee’s ‘third wave’ with stake in Intelligentsia.” Reuters. 30 Oct 2016. 

Schwaner-Albright, Oliver. “At Last, a 20,000 Cup of Coffee.” New York Times. 23 Jan. 2008

The two articles give some background details and information on the three waves of coffee. Details are synthesized in the infographic. The most important concept is that we are currently in the third wave of coffee. This wave of coffee signified a shift from the coffee-shop environment to the coffee shop product. While Starbucks’ and Peet’s specialty blends were not necessarily bad, consumers desired something more. They became more conscious of sourcing and the subtle, unique taste of individual beans––the idea of single origin beans versus blends. In addition, consumers are searching for innovative new ways to drink coffee as opposed to the classic espresso popularized by the second wave. Take for example Blue Bottle Coffee Company’s $20,000 coffee maker imported from Japan.

With the limelight now turned towards the source of the beans, sustainability and fair trade entered the picture. This new culture of coffee specialization as shops aspire to differentiate themselves from corporate giants can only mean good things for the future. Not only does third wave coffee promote a thriving economy made up of small business, it encourages extra transparency in the coffee supply chain and supports farmers.

Even large coffee shops are jumping on the third wave movement. One example is Peet’s acquisition of Intelligentsia Coffee, one of the pioneers of third wave coffee. The company will continue to operate independently–this reveals that Peet’s understands the appeal of an independent, specialty coffee shop. Rather than eliminate competition, Peet’s is using its resources to diversify coffee. This new way of competing through small artisan shops is a positive move away from massive chains.
 

 

Starbucks

Danigelis, Alyssa. “Starbucks and Closed Loop Partners Plan Recyclable, Compostable Cups”. Environmental Leader, 23 Mar. 2018

This article provides new information on Starbucks’s recent commitment to developing fully recyclable and compostable cups. It provides a concise description of their efforts–Starbucks is testing a new liner made from plant material, which follows 12 other trials from their R&D team. This is noteworthy information that is relevant to my research because it shows the progress that Starbucks is making in their effort to lessen their environmental impact. The big issue with the previous cups is that they were only recyclable in certain facilities. While new cups can help with the problem, the big problem is the lack of recycling overall and the sheer volume of disposable cups used annually––the industry puts out 600 billion paper and plastic cups a year, with Starbucks cups making up a meager 1% of that amount. If the industry as a whole can adopt this new cup though, progress would be made.

  

“Global Social Impact: 2017 Performance Report. What Is the Role and Responsibility of a For-Profit Public Company?”, Starbucks Corporation, 2017

In this report, Starbucks shares its progress on its social impact programs. It provides a detailed summary of everything Starbucks has been working on in the last year. Some notable facts are: 99% percent of Starbucks coffee is ethically sourced; they have trained 25,000 coffee farmers from post conflict regions like Columbia; they have donated over 21 million coffee trees; and they have committed 50 million dollars to loans for farmers through their Global Farmer Fund. This reveals that Starbucks is tackling social issues from many different sides, but the theme here is focusing on the people that have contributed to the success of Starbucks. Training and supplying, and financially supporting farmers would lead to long term benefits for all.   

 

Semroc et. al. “Assessment of the Starbucks Coffee and Farmer Equity (C.A.F.E.) Practices Program FY08 - FY10.” Conservation International, Mar. 2012

This is a report from Conservation International in collaboration with Starbucks on the effectiveness of their C.A.F.E. Program for the 2008-2010 fiscal year. The report examined trends among participating producers in their levels of participation in adopting sustainable coffee practices, such as improving worker conditions and coffee processing practices. Farms are encouraged and checked against minimum guidelines for meeting or exceeding wages, and improving worker access to quality healthcare and education. This ensures that unacceptable practices like forced labor, discrimination, and dismally low wages are not present in the Starbucks supply chain. By having this, Starbucks is demonstrating a commitment to not only being mindful of their own ethics, but to encourage ethical coffee practicing in the industry as a whole. For more specific data from the fiscal year of the percentages of workers being paid over minimum wage, getting benefits, etc…, consult the report.

 

“Capital Creates Coffee That Sustains”. Morgan Stanley, 21 Sept. 2018

This article from Morgan Stanley’s website gives a broad overview of Starbucks’ collaboration with them. It details how Starbucks has issued bonds to raise over 1 billion dollars to dedicate to sourcing ethically grown coffee. With the money, Starbucks is creating farmer support centers to help support farmers have better quality crops. In addition, the money is being used for loans to farmers, which is part of the C.AF.E program. This information is helpful to develop an overview of Starbucks’ sustainability efforts, as well as a good starting point for exploring Starbucks comprehensive initiatives to support their farmers.

 

“Starbucks to Provide 100 Million Healthy Trees by 2025.” Starbucks Corporation. 17 April 2017

In this article, Starbucks’s describes their initiative to plant 100 million trees by 2025. These trees would replace low productivity trees that farmers are currently using, which are affected by a warming climate sustaining a leaf rusting disease. So far, over 25 million trees have been donated so far since the initiative started in 2016, so it seems like it is a feasible goal. Starbucks commitment has a dual impact, one being combating climate change–they had also already promised to plant a tree for every bag of coffee sold. Starbucks also expects this long-term strategy of helping farmers will stabilize the income of the farmers, which will help them raise their families and improve their community in the long run.

 

Worland/Alajuela, Justin. “Your Morning Cup of Coffee Is in Danger. Can the Industry Adapt in Time?” Time Magazine. 21 June 2018,

This article describes how Starbucks is working towards finding coffee that will be resilient in a future affected by climate change. Their effort involves working directly with farmers in Costa Rica. In 2013, they purchased their own farm as a field lab in which they will develop coffee. With rising temperatures bringing drought, disease, and more pests, coffee is in danger. While it is in their own interests to fight back against climate change, their effort has brought about a deep and far-reaching influence on the coffee sector and the environment. Farmers are being taught new techniques for water efficiency, and given new beans to grow. The effort Starbucks has put into saving their coffee is a great example of how saving the environment does not have to be exclusive from profits. The livelihoods of thousands of farmers are at stake, in addition to the desires of us coffee drinkers.

 

Kirk, Laura Zolman. “Starbucks' Plan to Save the World, and $50M.” QSR. Sept. 2018,

This article is describing an additional effort by Starbucks to become green––they have committed to building and operating 10,000 “Greener Stores.” These stores would be LEED certified, powered by 100% renewable energy and utilizing efficient water and energy consumption technology. This has important social implications because it makes people see the benefits of modernizing buildings, as well as setting a business model for other large stores to follow. A particularly powerful line is by CEO Kevin Johnson, who says “...the pursuit of profit is not in conflict with the pursuit of doing good.