Team 2

Raozhong Chen, Michael Koelbl,

Saurav Shekhar, Jingyi Wu, Yingying Yu

Starbucks and
Conservation
International

02/27/2017
2. Executive Summary

3. Problem Statement

1. What do you think of Starbucks collaboration with

Conservation International (CI) in Chiapas?
Very good idea
o Aligns with corporate mission: establish Starbucks as premier purveyor
of the finest coffee in the world while maintaining our uncompromising
principles as we grow.
o Strong, mutual cooperation with CI to work in Mexico
o Intense help and development programs for farmers (financing, training,
) Take it serious
o Small scale that allows being so careful
o Good deal:
Low risk ($150,000 investment)
Good publicity (Although criticized by some for being
hypocritical, just 76,000 pounds)
o However, Mexico not among biggest exporters (leverage in Vietnam
might be higher, because of the extreme low payments)
 2. Wouldnt it be simplier to just write a check and make a
donation to CI instead of getting engaged with loans and people in the field and lots of
complications?
Yes, it maybe would
But does not reflect corporate culture (would reveal them as a phony company)
Low investment should not be a problem
CI does most of the field, hands on work
Starbucks can just win: Any successful implementation would lead to new,
sustainable coffee supply, which can be offered/sold as sustainable, fair trade

3. Why would coffee farmers agree to change their farming

practices to these more environmentally friendly methods? Is Conservation International
being exploited by Starbucks?
At first needs lot of persuasion (farmers are great economists)
o Offer clear benefits (technical assistance, organizational assistance,
prospect to sell increasing percentage to Starbucks for premium prices
Prospect of having an individual tailored work-plan for each farmer
Use one farm as best practice, demonstrate feasibility and benefits and hope for
spillover effects
Is CI being exploited by Starbucks
CI has three full-time and several part-time extensionists who visit every farm
CI provides training courses
CI operates a training center
CI sells subsidized organic fertilizer
CI is doing quality controls
CI set up a low-interest Conservation Enterprise Fund ($250,000) to support
farmers investments
CI was used as a facilitator for other companies to get on track (Hyatt, United
Airlines)

4. What do you think were the key factors that enabled

alliance between CI and Starbucks?
Initial common ground between CEOs Peter Seligmann (CI) and Schultz
(Starbucks)
CI reliant on financial support
Identical mission statement (at least Starbucks pretends to)
Starbucks management (Sue Mecklenburg) overcomes concerns that CI
might expose Starbucks practices
5. How does Starbucks relationship with CI compare to that of its relationship with the fair
trade Movement organizations Global Exchange/TransFair?
Good, mutual understanding (Starbucks even extended cooperation)
Global Exchange started protesting Starbucks, because Starbucks does not sell any fair
trade coffee
Starbucks tried same approach as it did with CI
o Support their business
 o Provide financial assistance
o Work together on projects
TransFair was just interested in selling certification seals
Global Exchange/TransFair pressured Starbucks to buy larger quantities
TransFair does not show interest in improving quality among farmers (that is not their
mission)
Smith: NGOs produce change that is sometimes very useful
It is not wrong to sometimes ignore them

6. What would you recommend to Starbucks regarding the future of its relationship with CI? What
might you change?
Continue cooperation
Invest more money ($600,000 over three years are peanuts for Starbucks, given its benefits)
Actively seek to further expand the program with other industry leaders
Different: Focus not only on Mexico, but on countries that urgently need help (Vietnam, )

7. What lessons can we draw from todays case in terms of how to most effectively manage the
interface with nonprofit organizations?
Further research

4. Background

5. Methodology

6. Results

7. Conclusion and Recommendation

8. References