Wednesday 27 March 2013

Starbucks Becomes Its Own Supplier

Authored by Sarah Clarke

Starbucks recently bought its first farm, a large plot in Costa Rica.
From a CSR and ethical sourcing point of view, Starbucks plans to use the centre to help coffee farms mitigate climate change and support long-term crop stability, in addition to helping support growers and their families.

Arguably the more important benefits include: Starbucks’ move gives them more control than ever over their supply chain, and allows them to test and create new blends of coffee.  The company can now oversee the production of their coffee, literally from the moment the seed is sown.
What this means for the sourcing process:
  • 100 per cent control over lead times and inventory 
  • Protection of product innovation – including the development of new coffee blends
  • Improved profit margins by eliminating the cost of land in the supplier mark-up

Is the coffee giant learning a lesson from the horsemeat scandal about exercising more control in the supply chain? Seems like it, and we’re betting that more companies will be following in Starbucks’ footsteps…

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