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Starbucks Leads Global Coffee Industry in Paying Premium Prices for Sustainably-Sourced Coffee

Published 01-18-07

Submitted by Starbucks Corporation

SEATTLE--(BUSINESS WIRE)--Jan. 18, 2007--Starbucks Coffee Company (NASDAQ:SBUX) announced today that the average price per pound it paid for all its coffee increased from US$1.28 in fiscal year 2005 to US$1.42 ($3.12 per kilogram) in fiscal year 2006. During the same period the industry average "C" (commodity) market price was $1.04 per pound ($2.28 per kilogram). Additionally, Starbucks announced that the coffee the Company purchased through its independently verified coffee sourcing and purchasing guidelines, known as C.A.F.E. Practices, increased from 77 million pounds (35 million kilograms) in fiscal year 2005 to 155 million pounds (70 million kilograms) in fiscal 2006 - 53 percent of the total coffee purchased by the Company. This represents a year-over-year increase of 100 percent.

"At Starbucks, our commitment to pay premium prices for premium quality coffee has not wavered over the years," said Dub Hay, senior vice president, Coffee. "It's an approach that not only serves the short- and long-term economic interests of coffee farmers and suppliers; it also serves our needs by creating an incentive for farmers to improve quality and increase production. That, in turn, contributes to a more sustainable supply of the high quality coffee we depend on to support our continued growth."

Starbucks developed C.A.F.E. Practices (Coffee and Farmer Equity Practices) in partnership with Conservation International and Scientific Certification Systems to provide incentives for coffee to be cultivated and processed in a sustainable manner.

Beyond paying premium prices for premium quality coffee, coffee purchased under C.A.F.E. Practices guidelines meets criteria around social responsibility in the farming community, economic transparency to help ensure equitable payment to farmers for their crops, and environmental leadership.

"Starbucks has shown real leadership by demonstrating how its supply chain can be a powerful tool for conservation and sustainable livelihoods," said Glenn Prickett, senior vice president for Conservation International. "By expanding purchases through its C.A.F.E. Practices program and paying premium prices, Starbucks is providing farmers with an important incentive to grow coffee in an environmentally friendly manner. This investment in coffee growing communities further helps build local infrastructure, such as schools and medical facilities, and contributes to the communities' long-term success."

"C.A.F.E. Practices provides an opportunity to coffee suppliers around the world to assess their socio-economic and environmental standards while marketing their crop in a profitable and transparent supply-chain," said Eduardo A. Esteve, managing director, Agroindustrias Unidas de Mexico, S.A. de C.V. "As a farmer, every point gained in C.A.F.E. Practices is translated into more competitiveness. I have no doubt it has helped me become a better employer making my farm, Guadalupe Zaju, a farm that can attract field workers."

In addition to C.A.F.E. Practices-approved coffee, Starbucks purchased coffee in fiscal year 2006 through other responsible environmental or economic certification efforts. These included conservation (shade grown) coffee (two million pounds or one percent of Starbucks total coffee purchases), certified organic coffees (12 million pounds or four percent of Starbucks total coffee purchases), and Fair Trade Certified(TM) coffee (18 million pounds or six percent of Starbucks total coffee purchases). Starbucks remains one of the largest purchasers, roasters and distributors of Fair Trade Certified(TM) coffee in North America.

For more information about C.A.F.E. Practices, including specific information about the verification process, please visit http://www.scscertified.com/csrpurchasing/starbucks.html. For more general information about Starbucks and coffee, please visit http://www.starbucks.com/whatmakescoffeegood.

About Starbucks Coffee Company

Starbucks Coffee Company provides an uplifting experience that enriches people's lives one moment, one human being, one extraordinary cup of coffee at a time. To share in the experience, visit www.starbucks.com.

Copyright Business Wire 2007

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Starbucks Corporation

Starbucks Corporation

It's the way we do business Contributing positively to our communities and environment is so important to Starbucks that it's a guiding principle of our mission statement. We jointly fulfill this commitment with partners (employees), at all levels of the company, by getting involved together to help build stronger communities and conserve natural resources.

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