“There’s a crisis”: Starbucks invests $20m in Central American coffee farmers

By Beth Newhart contact

- Last updated on GMT

Farmers in Guatemala, Mexico, El Salvador and Nicaragua will benefit from Starbucks' investment.
Farmers in Guatemala, Mexico, El Salvador and Nicaragua will benefit from Starbucks' investment.

Related tags: Starbucks, Coffee, Investment, Farmers

Record low coffee prices in Central America are leaving smallholder farmers struggling to cover basic production costs. Starbucks announced it would invest $20m in its coffee growers to mitigate the crisis, “making a positive impact on the lives of many.”

Starbucks purchases 650m pounds of coffee every year, and the majority of it comes from Central America. Its interest in what it says is a 'coffee pricing crisis' is what inspired the investment. The company reported it will particularly focus the money in Guatemala, Mexico, El Salvador and Nicaragua.

Michelle Burns, senior VP of Global Coffee and Tea at Starbucks, spoke to BeverageDaily about the announcement and exactly how the money will make an impact to the farmers.

Quality concerns

“Our hope and anticipation is that the market will self-correct. That’s one reason why we are wanting to make sure that, in advance of moving out of the current depression, that we’re getting funds there specifically and intentionally over the course of the next few months,”​ Burns said.

The money will start to have an effect during this upcoming harvest season and will be divided up depending on the country and the cost of production. This is the largest investment Starbucks has ever made in its farmers.

As the crisis stands, many growers aren’t able to cover their basic costs of production, including labor, fertilization and maintaining tree health. Without the proper funds, farmers will have to cut corners and the quality of the coffee will decline, or they may abandon farming altogether.

“This commitment that we’re making in a time of crisis specifically for Central America, it’s meaningful for us. It’s an example of what we’ve always done in our mission and values as a company to take care of the lives of others,”​ Burns said.

$20m and 20 million trees

This initiative by Starbucks will directly assist its growing partners but also mitigate the threat of quality-compromised coffee. To this end, the company is expanding its 100 Million Tree donation program by supplying an extra 20m coffee trees to Colombia over the next two years.

The new trees will replace old ones sick with disease like coffee leaf rust. The program also provides technical support and supplies to care for the trees.

“Our purpose as a company has always been around trying to lead in doing what’s right and impacting lives, and in this case the lives of farmers,” ​Burns said.

“We wanted our commitment to be meaningful and impactful, but most importantly we wanted to ensure that we were getting it into the right hands of the small farmer.”

Related topics: Tea and Coffee, R&D, Sustainability

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