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Starbucks, Transfair USA and Fairtrade Labelling Organizations International Join in Support of Small-Scale Coffee Farmers Through a $20 Million Loan Program
04/16/2009
Partnership to Encourage Sustainable Agricultural and Business Practices Across Industry, Increasing Supply of High-Quality and Responsibly-Produced Coffee Raising Small Farmer Living Standards TransFair USA, Fairtrade Labelling Organizations International and Starbucks Encourage other NGOs and Government Agencies to Join Fund

ATLANTA; April 16, 2009 – (Nasdaq: SBUX) Building on their decade-long relationship, Starbucks, the Fairtrade Labelling Organizations (FLO) and TransFair USA will join forces to leverage a small-scale farmer loan program that is intended to grow to at least $20 million by 2015 based on current commitments from Starbucks Coffee Company. The Small Farmer Sustainability Initiative (SFSI) was designed to build on existing Starbucks efforts that help foster improved livelihoods, environmental stewardship and economic sustainability in the coffee industry. Given the economic and business challenges that continue to face coffee farmers around the world, the program will increase market access for small-scale coffee farmers, provide much needed farm loans and technical assistance, and offer an industry-pioneering coordinated audit system.

The SFSI is a three year pilot that will leverage the on-the-ground expertise and resources that each group has in coffee growing regions. The initiative will be supported by the Starbucks Farmer Support Centers in Latin America and East Africa to facilitate outreach in key regions across Latin America, Africa and Asia Pacific. Farmers will have access to the $12.5 million Starbucks currently has invested in farmer loan programs through social investment organizations such as Root Capital, Verde Ventures and Calvert. Starbucks has an additional goal to increase funding for farmer loans to those related organizations to $20 million by 2015 as part of the Starbucks™ Shared Planet™ commitment to ethical sourcing. Together, the organizations hope to increase the participation of small-scale farmers in the global specialty coffee market.

“Our business relies on increasing the production and sustainability of small-scale coffee farmers around the world,” said Dub Hay, senior vice president coffee & tea, Starbucks. “Currently, 85 percent of Starbucks coffee is grown on family farms with less than 12 hectares of land, so increasing their access to affordable loans and technical support will help them not only survive the current global economic crisis, but will help them emerge as stronger business partners for the future.”

Small-scale farmers will have greater access to capacity-building resources in the areas of agronomy, technical support, and capital investment. Offering cooperatives increased access to credit and quality improving resources will enable farmers to increase income, improve family livelihoods, and promote sustainable community development. In 2008, Starbucks announced an intent to increase their purchases in 2009 to reach 40 million pounds (18 million kilograms) making them the largest purchaser of Fair Trade Certified coffee in the world.

“Starbucks increased commitment to small-scale coffee farmers shows tremendous leadership. Our evolving partnership will have a far-reaching positive impact in coffee growing communities throughout the developing world. The results of this program will help send kids to school, bring clean water to farming communities and enable struggling farmers to put food on the table," said Paul Rice, president and CEO of TransFair USA. "Working together, Starbucks and Fair Trade Certified empower consumers to make ethical decisions about the coffee they drink, and support the farmers that produce it."

In an industry first, FLO-CERT, the certification body for Fairtrade, and Starbucks plan to develop a single audit system for farms applying for both Fairtrade certification and Starbucks Coffee and Famer Equity (C.A.F.E.) Practices verification. This will result in cost savings and efficiency benefits for coffee producers and simplify the complexity of multiple audits into one unified auditor visit, expected to save coffee farmers 15-30 percent in auditing expenses alone.

As a component of the SFSI, Starbucks will also provide expedited support and feedback through detailed analysis of green coffee samples from Fair Trade Certified cooperatives to assist in improving quality. This enables small-scale farms to focus on improving quality and expanding the supply of coffee to Starbucks and other specialty coffee purchasers at the higher prices it commands.

Starbucks growing partnership with Fair Trade and Transfair USA is part of the Starbucks™ Shared Planet™ Initiative’s goal to buy responsibly grown, ethically traded coffee. More information about Starbucks™ Shared Planet™, the company’s relationship with Fair Trade, and other coffee buying practices will be available in Starbucks 2009 Global Responsibility Report. The report can be accessed beginning April 22, 2009 at www.Starbucks.com/sharedplanet.

About Starbucks
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.

About TransFair USA
TransFair USA, a FLO member organization, is the only independent, third-party certifier of Fair Trade Certified™ products in the United States. TransFair USA audits and certifies in accordance with FLO's internationally agreed standards, monitoring transactions between U.S. companies and their international suppliers to guarantee that the farmers and workers producing Fair Trade Certified goods were paid fair prices and wages. TransFair USA certifies coffee and more than 20 other product categories. For more information about TransFair USA, visit www.FairTradeCertified.org

About Fairtrade Labelling Organizations International (FLO)
FLO is a non-profit, multi-stakeholder association that encompasses a global network of Fairtrade organizations that are actively involved in supporting and empowering producers, raising consumer awareness and campaigning for changes in the rules of conventional trade. FLO’s role is to develop and review the standards that Fairtrade producers must meet, and the terms of trade for importers, exporters and retailers. FLO also directly helps producers to gain Fairtrade certification and to develop market opportunities.

FLO’s members include:

    • three producer networks in Asia, Africa and Latin America and the Caribbean that Fairtrade certified producer groups may join
    • 19 national organizations, including TransFair USA, that promote Fairtrade in their country and licence companies to use the FAIRTRADE Certification Mark on products. There are currently Fairtrade Labelling Initiatives in Europe, North America, Japan, Australia and New Zealand.