Starbucks: big in Australia. Plus, large companies are buying more sustainably certified coffee than ever, and Italy’s love affair with €1 espresso might be ending.
‘Global Coffee Platform: New Report Shows Growth and Transparency in Sustainable Coffee Purchases’ – via Communicaffe
In 2023, nine of the world’s largest companies purchased more than three-quarters of their green coffee through recognized sustainability metrics, according to the Global Coffee Platform (GCP).
The Sustainable Coffee Purchases Report 2023 is the GCP’s latest annual report and breaks down the green coffee purchasing patterns of the industry’s largest coffee buyers, including JDE Peet’s, Julius Meinl, Keurig Dr Pepper, Melitta Group, Nestlé, SUPRACAFÉ, Taylors of Harrogate, Tesco, and Westrock Coffee.
To meet the platform’s sustainability benchmark, coffee must be certified through a third party like Rainforest Alliance or Fairtrade or a company’s in-house standards such as NKG Bloom or Nespresso AAA.
Over the past few years, the report has shown an increase in what it calls sustainable green coffee purchasing. In 2023, these nine companies purchased 73% of their coffee through sustainable schemes, compared to 70% in 2022 and 55% the year before.
As Daily Coffee News notes, however, comparing data from past years is difficult. Companies elect to participate and hand over data—the number of participating companies rose this year. At the same time, new sustainability initiatives can make it challenging to determine if companies are actually buying more sustainably sourced coffee (as opposed to more coffee qualifying under new schemes).
GCP said in a press release that the report shows the companies’ “commitment to increasing transparency around the demand for sustainable coffee and progress in annual sustainable coffee purchases.”
“The alignment made evident in this report, the growth in numbers and the overall uptake of GCP’s tools is a positive move for the coffee sector,” said GCP executive director Annette Pensel. “Significant additional individual and collaborative efforts are still needed to achieve transformational change.”
‘Why Starbucks is Crashing in the US, but Booming in Australia’ – via The Sydney Morning Herald
Around the world, Starbucks is struggling. Following poor sales and criticism from workers and customers, the company changed leadership and attempted to return to its coffeehouse roots. In China, rival startup Luckin Coffee has overtaken Starbucks in both revenue and store count.
However, one place that still seems to love the coffee giant is Australia. In fact, the country only just seems to be waking up to the joys of the frappuccino, according to Shona Hendley in The Sydney Morning Herald.
Starbucks has had stores in Australia for two decades, but only last year reported its first profit—and a monstrous uptick at that. In 2023, Starbucks stores in Australia reported a 35% increase in sales over the industry average of 4%.
Before this upswing, Starbucks struggled to win over Australian coffee drinkers. Australia is known for having many independent cafes and small chains. Australians are proud of their coffee culture, and most coffee companies are independently owned.
“Starbucks was trying to compete against the premium operators and state chains,” consultant Suzee Brain told Hendley. “Premium and state chain customers would never swap to an American coffee beverage. This is what really slowed them down.”
However, a new generation is getting into coffee, and Starbucks’ focus on iced, flavored, and customizable coffees—popular on social media—has helped it win market share. Videos of its limited edition drinks and various flavor combinations have gone viral on TikTok. The brand recently opened a store in Perth, and customers were lining up to nab drinks at the new locale as early as 3 a.m.
“Starbucks hasn’t really done anything differently,” Brain said, “they’ve just got lucky that we’ve had a generational change in … customers.”
‘The Battle Over Italy’s €1 Espresso’ – via The Telegraph
Italians are very protective of their €1 espresso, an enduring tradition that means they often pay less for coffee than drinkers in other countries. However, the steadfast hold of the €1 espresso hides the controversial conditions under which cafes can offer these prices, many of which operate at a loss.
The average price of a cup of coffee in the US is about $5.60, compared to just $1.65 in Italy. Espresso is even cheaper. There’s been some pushback on this tradition, a topic Valorie Clark wrote about for Fresh Cup in 2022, but rising costs mean the €1 espresso is once again under threat.
In a piece for The Telegraph, Josh Kirby interviewed cafe owners about the dynamics of coffee pricing in Italy. Many cafes in Italy can only sell coffee so cheaply because they are subsidized—and in many cases controlled—by large coffee roasting companies, says Andrea Pettinari, owner of Caffe dell’Arte in Cagliari.
“I’d say around [99%] of espresso bars in Italy are essentially owned by roasting companies – independent cafes are so rare here,” Pettinari said. “People think we have lots of independent cafes and no coffee chains, but the reality is that the coffee companies control the vast majority of them.”
Another reason for Italy’s low prices is simply volume: Italian cafes are set up to cater to a steady stream of “walk-in-walk-out” customers, says Marco Cappellari, owner of Melaleuca in Florence: “Bars often don’t even have any seats, and most people don’t have milk in their drink, so it’s a 45-second transaction.”
Even with high volume and subsidized costs, many cafes struggle to sustain the €1 espresso. However, raising the price is fraught with danger. The cultural view of coffee as “a human right,” as Pettinari puts it, means raising prices can put a cafe out of business. “If you go up to €1.80 or €2, you would immediately have no customers, unless you are in a train station or a busy tourist area,” Cappellari says. “Your business would die a very quick death. The people dictate what the price is going to be.”
The rising price of green coffee and other factors like inflation threaten that view. “Super-cheap espresso prices should not be sustained,” Pettinari said. “You’re lowering the quality of coffee over time by keeping it at a certain price point. It hasn’t really changed in 25 years, while everything else has gone up four or five times.”
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‘NWSL Players Find Common Ground Over Coffee, the Most Popular Commodity in the League’ – via Indivisa
‘EU Lawmakers Seek Change to Deforestation Law and Approve Delay’ – via Reuters
‘Coffee Holding Co. Acquires Longtime NY Private-Label Roaster Empire’ – via Daily Coffee News
‘Cup of Excellence 2024 Announces Winners from Brazil’ – via Global Coffee Report
The Week in Coffee Unionizing
The animosity between Starbucks and its unionizing workers has cooled recently, and the two sides are negotiating a collective bargaining agreement. However, many cases filed by the union with the National Labor Relations Board (NLRB) during less harmonious times between the chain and the union are still working their way through the courts.
The NLRB recently ruled on two cases related to Starbucks Workers United:
- The board declared that Starbucks broke the law when it told workers at its flagship store in Seattle that joining the union would cause them to lose their benefits. NLRB Chair Lauren McFerran said the ruling “protects workers’ right to make a free and fair choice about union representation while respecting an employer’s prerogative to share their views in a non-coercive manner.”
- The board also ruled that employers can no longer tell workers that joining a union will negatively impact their relationship with management. However, the ruling noted that comments made by Starbucks were legal at the time. Company spokesperson Jay Go-Guasch told Bloomberg Law that Starbucks was reviewing the decision but would continue training managers to “ensure respect of our partners’ rights to organize.”
Beyond the Headlines
‘Ikawa Nziza Cyane: Inside Rwanda’s Groundbreaking Coffee Quality Project’ by Daniel Muraga
‘What Makes Packaging Sustainable?’ by Chloé Skye Weiser
‘Did Coffee Borrow More From Feminism Than Just the “Wave” Analogy?’ by Ashley Rodriguez
