THE WILLIAM DAVIDSON INSTITUTE

case 1-428-664

February 2008

A Moment of Reflection

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Coffee and Ethiopia

Schultz commented: “We’ve learned that perhaps one of the reasons that the NGO (nongovernmental organization) is involved in this is because they’re in a membership drive, and perhaps Starbucks is being used as a foil.” What would this allegation do to Oxfam’s brand? Oxfam’s members were frequently asked to act upon issues of economic injustice. Would Schultz’s comment cause them to doubt Oxfam’s credibility? And what about the Ethiopian coffee campaign? Should they continue pursuing the campaign? The last thing Oxfam wanted to do was get into a spitting match with Starbucks, an organization that had once partnered with Oxfam to raise awareness about coffee issues. It could take years before both sides came to an agreement, and Petchers wondered whether pressing this issue would damage all of Oxfam’s efforts. Petchers knew that people were watching this campaign very closely. The way in which he proceeded would not only affect their efforts to support Ethiopian coffee farmers, but also Oxfam’s campaigns across the world.

In 2007, it was estimated that US$9,167,691 worth of unroasted, caffeinated coffee entered the global marketplace.1 This coffee is grown in approximately 53 countries, all located along the equator between the tropic of Cancer and the tropic of Capricorn.2 The three most prominent regions for the exportation of coffee beans are Latin America (accounting for 65.75% of global coffee exports), Asia (21.14%) and Africa (9.24%).3 The vast majority of these beans (96%) are exported to Europe, North America and the Caribbean, and Asia.

Xavier Benavides, Tamara Jones, Rishi Moudgil and Rebecca Taylor developed this case under the supervision of Christie L. Nordhielm, Clinical Associate Professor of Marketing at the Stephen M. Ross School of Business. © 2008, Christie L. Nordhielm.

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Life was frantic as always at Oxfam America, one of the world’s largest international development and aid agencies. In the last five years, Oxfam had branched into campaigning realizing that the organization could magnify its impact by amending government policy and engaging corporations on irresponsible practices. The global coffee industry had always been central to that work. Seth Petchers, Coffee Lead at Oxfam America, was worried by comments Howard Schultz made at the Annual Starbucks Stockholder meeting. Oxfam America and others had been campaigning for the last six months to ask Starbucks to stop blocking the Ethiopian government’s request to trademark the names of Ethiopian coffee regions. With farmers receiving only pennies of the profit earned by each cup of Ethiopian coffee, Petchers knew that Oxfam was doing the right thing. However, Schultz had implied that Oxfam and other groups were attacking Starbucks because of its prominent brand.

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Oxfam’s “Make Trade Fair” Campaign Against Starbucks