Coffee folks call for more clarity around the EU’s deforestation legislation. Plus, new research into coffee agroforestry and Starbucks CEO Laxman Narasimhan is out, and his successor is getting a package worth around $110 million to fill his shoes.
‘Prominent Coffee Groups Call for Immediate Interventions as EUDR Looms’ – via Daily Coffee News
A set of anti-deforestation laws known as the EUDR will go into effect on December 30, 2024. To comply with the regulations, companies importing coffee and other commodities into the EU have to prove that those items have not contributed to forest destruction.
As this deadline for large companies nears (smaller companies have an extra six months to comply), several coffee organizations claim there is still a lack of clarity on how regulations will be implemented and enforced.
Fairtrade International, a non-profit coffee certification group, released a public statement asserting that, while it believes in the objectives of the EUDR, it wants clarification on the law’s impact on smallholder producers. Critics of the legislation believe that small-scale farmers will be unable to provide the level of traceability and reporting required to comply and that large importers will simply stop working with them.
“Fairtrade is very concerned that producer organizations will be cut off from trade with the EU market or pushed out of supply chains by larger producers not because they farm on deforested land, but because they face challenges in collecting, managing, and submitting the necessary data,” the organization wrote.
It urged the European Commission (EC) to release guidance to help clarify the rules it seeks to enforce and provide funding to assist smallholders to comply: “The farmers should not have to bear the compliance costs linked to laws imposed by the EU.”
Dozens of stakeholders from coffee organizations across the globe published an open letter to EC president Ursula von der Leyen “calling for urgent action for effective EUDR implementation in the coffee sector.” The group said they were committed to the EUDR, but asked the EC to address seven concerns, such as enhancing compliance clarity and simplifying the reporting system for companies operating in “low risk” countries.
Signatories of the letter, which claims to represent “the entire coffee supply chain, accounting for over 90% of the coffee imported, manufactured, sold, and exported in/from the EU annually,” include coffee associations from several countries, including the World Coffee Producers Forum, Global Coffee Platform, and the European Coffee Federation.
‘Starbucks CEO Out After Just Over a Year Amid Sales Struggles’ – via NBC News
Just seventeen months after he took the top job, Starbucks fired CEO Laxman Narasimhan. NBC News reports that the company removed Narasimhan to “revive flagging sales and appease outside investors.”
Narasimhan’s replacement is former Chipotle CEO Brian Niccol, who will take over next month. The news led Starbucks stock, which had fallen 20% since the beginning of 2024, to jump 24%, while Chipotle’s stock declined. The coffee giant has struggled in recent years as it transitions from being a cafe-focused “third place” for customers to enjoy a drink on plush sofas to a drive-thru and mobile-app-focused quick-service brand.
But this quick-service transformation came at a cost: increased focus on promotions has put enormous pressure on baristas as orders flood in. An increasingly expanding menu and the literal billions of customizable drink options make wait times longer and have resulted in annoyed and sometimes aggressive customers.
Former Starbucks chair Mellody Hobson seems to acknowledge the company’s new quick service focus. She called Niccol “one of the biggest names in the industry,” noting his previous track record at Chipotle, Pizza Hut, and Taco Bell. “He knows this industry, and we thought he would be the right leader for this moment,” Hobson told CNBC.
Starbucks chairman emeritus and former CEO Howard Schultz praised Niccol, calling him “the leader Starbucks needs at a pivotal moment in its history. He has my respect and full support.” Niccol will walk away from Chipotle with around $85 million in assets and will receive a pay package worth over $110 million in his first year at Starbucks.
Narasimhan was also celebrated when he was appointed CEO in 2022. Schultz called Narasimhan the equivalent of a “No. 1 draft choice” as well as a “world-class operator” and an “entrepreneur” who “is going to be a great, great leader for the future of this company.”
‘Study Highlights Environmental and Economic Benefits of Agroforestry for DRC Coffee Crops’ – via Mongabay
Although the concept has been around in coffee forever, agroforestry—or growing coffee in a forest among shade trees and other plants—is becoming ever more popular as the industry seeks ways to cope with the impacts of climate change.
New research in the Democratic Republic of Congo (DRC) sought to compare agroforestry growing practices to more standard techniques such as monoculture, or growing just one crop. The goal was “to see whether agroforestry could be a pragmatic solution for farmers instead of merely a solution proposed by scientists, conservationists and development cooperation actors,” according to study co-author Ieben Broeckhoven from KU Leuven, a university in Belgium.
The study found that coffee agroforestry systems return comparable yields to monoculture plantations, but support 19 times more biodiversity and store twice as much carbon, which both helps soil health and mitigates the impacts of climate change by trapping carbon in the ground.
The researchers hope their findings show that coffee agroforestry can be a practical alternative in a country where more than 90% of deforestation is caused by smallholder farmers needing to grow monoculture crops such as coffee. “It’s a question of considering the farmers’ needs and trying to work with them,” Broeckhoven said. “A ‘solution’ or regenerative practice will never work if it negatively impacts immediate to short-term agricultural production and farmers’ income.”
More News
‘Artisan V3 Software Launches, Supporting Roastery Scheduling‘ – via Daily Coffee News
‘I Tried The Pumpkin Spice Slurpee So You Don’t Have To‘ – via Sprudge
‘Starbucks Korea Raises Prices Amid ‘Consistently Soaring’ Costs‘ – via World Coffee Portal
‘Best of Panama Shatters Price Records with $627 Per Pound Average’ – via Daily Coffee News
‘JDE Peet’s Announces Interim Leadership as CEO Steps Down‘ – via Global Coffee Report
‘Arabica Coffee Prices Dip With Brazil Crop Avoiding Frost So Far‘ – via Bloomberg
‘Support a Pioneering DRC Cooperative Affected by Rebel Conflict‘ – via Daily Coffee News
The Week in Coffee Unionizing
Starbucks’ decision to replace its CEO might seem irrelevant to the chain’s much-publicized union drive, but it’s worth keeping an eye on as the incoming and outgoing executives have very different histories with unions.
Laxman Narasimhan’s short tenure as Starbucks CEO saw changes in how the brand dealt with the hundreds of unionized stores. After months of delayed talks, the company and union representative from Starbucks Workers United finally began negotiating in 2024. Both parties agreed to work on a “foundational framework” that both sides anticipated would lead to a collective bargaining agreement before the end of the year.
“While there is plenty of work ahead, coming together to develop this framework is a significant step forward and a clear demonstration of a shared commitment to working collaboratively and with mutual respect,” Starbucks Workers United said in a statement at the time.
Initial negotiations marked a significant change in approach from Starbucks, which has made headlines with its combative response to the union push.
However, Narasimhan’s replacement, Brian Niccol, used to run Chipotle, which has an aggressively anti-union reputation. The company has settled multiple unfair labor practice lawsuits from its workers for allegedly closing stores and retaliating against those who tried to unionize. In 2023, during collective bargaining negotiations with one location that managed to unionize successfully, Chipotle refused to accept any of the union’s requests. Instead, it offered a modest five-cent-per-hour pay rise—for some workers. By comparison, CEO Brian Niccol earned $17.2 million in 2022.
Whether Niccol changes Starbucks’ approach remains to be seen. In the meantime, collective bargaining negotiations continue.
Beyond the Headlines
‘Where Are All the British Coffee Unions?’ by Fionn Pooler
‘It’s Too Soon for Pumpkin Spice. Or Is It?’ by Ashley Rodriguez
