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Starbucks Expanding Coffee
Supply As Stores Grow
Rapid store expansion is driving
Starbucks to buy more coffee
from Central America while
increasingly looking for new
suppliers in places like Peru
and Indonesia, a company
official said on Thursday.
Peter Torrebiarte, general
manager of Starbucks Agronomy
Company, the group's farmer
support center in Costa Rica,
said Starbucks expected to ramp
up coffee purchases from outside
Central America, currently the
source of most of its beans.
"Opening five new stores a day,
we have to buy more coffee from
Central America and more coffee
from different origins,"
Torrebiarte said. "The ratio of
growth from Central America will
be less than that of say Peru."
He said weather in Central
America last year, especially
the effects of Hurricane Stan,
hit the volume but not the
quality of the coffee Starbucks
purchased.
Costa Rica lost around 11% of
its coffee crop to unseasonable
rain that caused a fungus
outbreak. Guatemala lost an
estimated 10% of its crop to
Hurricane Stan.
Starbucks Coffee Co. buys its
coffee green from individual
growers in 27 countries through
forward contracts, bypassing the
international coffee futures
market. It works closely with
farmers to assure quality.
The San Jose-based Starbucks
Agronomy Company goes into the
fields to give Central American
farmers technical advice to help
keep standards high and flavors
right, sometimes suggesting
different varieties of plants or
fertilizer.
"They may come to us and ask us
what we want, and then together
we can find the right cup
profile," said Torrebiarte.
"If we can continue to work with
the same farmers year after
year, we can obtain quality
results year after year."
The advice backs up Starbucks'
"Coffee and Farmer Equity (CAFE)
Practices" program, begun in
2004, to encourage sound
environmental and labor
practices. Farmers are graded in
meeting standards and rewarded
when Starbucks' buyers favor
farmers with higher grades.
In 2004, the first year of the
program, Starbucks bought 35
million pounds of coffee
produced under the good
practices program. Last year the
figure jumped to 76 million
pounds.
The company's goal is to buy 225
million pounds -- the bulk of
its purchases -- from the CAFE
program growers by 2007.
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