Starbucks, that monolith of suburban caffeine culture, announced today that due to a faltering economy and slipping share prices, 600 low performing US stores will be closed in the next year. Additionally, a mere 200  stores will open in 2009, instead of the 400 originally slated, according to the AP. What does this mean for social and environmental standards such as Fair Trade coffee, of which Starbucks is the largest purchaser in North America?

Coffee drinkers, read on...

In addition to bringing livingroom-like coffeehouses stateside, Starbucks is largely responsible for bringing the standard of Fair Trade--a certification which guarantees farmers a directly paid minimum for coffee crops, independent of the market price-- into American households. Organic coffees, and certified Organic Fair Trade coffees, are available at Starbucks in limited varieties. According to the Organic Consumers Association (OCA), Starbucks purchases Fair Trade Certified coffees for about 3.7% of their total product. However, with over 16,000 stores internationally, and as the largest coffee company in the world, that's a significant amount, and makes Starbucks the largest purchaser of Fair Trade coffee in North America. And that puts pressure on other major brands. From the OCA:

"Here's a breathtaking statistic: The $3 many Americans shell out every day for a latte at Starbucks is equivalent to the daily wage of a Central American coffee picker. Nonplussed? Here's another heart-stopper, specially designed for the non-gourmet coffee drinker: Those $3.95 cans of Maxwell House and Folgers you pick up at your local supermarket, well, the beans that fill them are bought for around a quarter and come from corporate farms that use environmentally poisonous pesticides and clear-cut forests to produce the highest possible yields."

Starbucks frequently gets a bad rep, while Maxwell House (of Kraft Foods) and Folgers (of Procter & Gamble) escape relatively unscathed. This probably stems from the errant belief that expensive coffee comes from expensive beans. Folgers doesn't get attacked because it's cheap, so there's little expectation that farmers are making much money. The classic $4 latte, or grande, double espresso, decaf, low fat, carmel macchiato, with extra foam, brewed at 180 degrees centigrade, topped with a sprinkle of cinnamon, and a dollop of whipped cream, if you prefer, hogs the spotlight out of pure flamboyance. The aforementioned drink costs nearly 15 cents a word--so how much of that goes to the farmer? Taylor Clark, in his recent book Starbucked, describes the coffee industry this way (extended excerpt here):

"In the late 1980s, as global coffee sales hovered at around $30 billion, farmers earned a steady $10 billion or so of the pie. The market has more than doubled since then—soaring to well over $70 billion on the strength of the designer coffee boom—yet according to the International Coffee Organization, growers have received an average of just $6.2 billion a year since the turn of the millennium... This brings us to an obvious question: If raw coffee is hovering around its all-time low price, why isn’t the slump making a dent in those big numbers on the coffeehouse menu board? Well, because what you’re paying for at a café isn’t the coffee."

Unlike the eat local movement for produce, we know coffee isn't growing on a nearby farm. It's going to come from very, very far away, which leaves ample room for price inflation, middlemen, and neglected farmers. But Fair Trade has also been criticized for sluggishness when it comes to fluctuating market prices, and for the minimal communication it creates between roaster and farmer. Enter the newest, underground standard, which favors small coffee companies: direct trade. With direct trade, roasters have the opportunity (and burden) to travel the world, meet with individual farmers, and be their own sourcing watchdogs. The New York Times, in an article on Portland, OR based Stumptown Coffee Roasters, described it this way:

"[Direct trade] also represents, at least for many in the specialty coffee world, an improvement on labels like Fair Trade, bird-friendly or organic. Such labels relate to how the coffee is grown and may persuade consumers to pay a little extra for their beans, but offer no assurance about flavor or quality. Direct-trade coffee companies, on the other hand, see ecologically sound agriculture and prices above even the Fair Trade premium both as sound business practices and as a route to better-tasting coffee."

So Starbucks is shrinking. Engage in your own form of direct trade with a local roaster that sells certified Fair Trade or certified Organic coffees, and ask about their direct trade practices, which vary by company.

If you can't find what you want locally, have your fix shipped to you. Stumptown Coffee is available online. For 100% Fair Trade, organic coffee, tea and cocoa order online from Equal Exchange, the oldest Fair Trade certified coffee company in the US. The second largest (non-franchised) coffee retailer, Minnesota-based Caribou Coffee, has nearly 500 stores and online ordering and sources over 50% of its coffee from Rainforest Alliance Certified farms.

More:

Brush up on the Fair Trade coffee standards.

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