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Starbucks tests buy-one, give-one strategy with coffee-bean deal
[CHICAGO] Starbucks Corp is trying out the buy-one, give-one model embraced by startups like Toms Shoes and Warby Parker.
Starting Tuesday, the chain will donate a coffee tree to farmers for every bag of coffee beans that customers buy from its 7,400 US company-owned locations. The yearlong program is part of an effort to raise awareness about the rust fungus that's damaging crops in Central America.
"Farmers need good, healthy trees," Craig Russell, executive vice president of global coffee for the Seattle-based company, said in an interview. "They face big challenges of climate and rust." The program will give millions of trees away, Mr Russell said, declining to give a more specific number.
Other retailers have used the buy-one, give-one method to entice shoppers and generate goodwill. Toms, which sells shoes, bags and sunglasses, provides footwear and other items to the needy when customers make purchases. The chain was founded in 2006 after Blake Mycoskie traveled to Argentina and saw children growing up without shoes.
Warby Parker, meanwhile, gives away a pair of glasses for every one it sells. And Mattress Firm Holding Corp is trying out the strategy with its new Dream Bed business.
The approach is seen as a marketing enticement - in addition to a philanthropic tool - but Starbucks says its tree donations aren't about competition or increasing sales.
"This is about using our scale for significant impact," Mr Russell said.
Starbucks already supports small-scale coffee growers by helping finance their operations. Last year, it provided grants to allow farmers to buy cattle and gain access to clean water. In June, Starbucks said it was increasing its farmer loan commitment to US$50 million by 2020.
Leaf rust, known as roya in Spanish, has recently wiped out plantations in Central America, resulting in crop reductions and job losses. Mexico said in 2014 that the rust fungus had reached a state of emergency. Earlier this year, an outbreak of the disease caused El Salvador to cut its coffee harvest forecast by about one-third.
Ecom Agroindustrial Corp., a global commodity company that is growing the tree seedlings, will distribute them starting in Mexico, Guatemala and El Salvador. That's where need is the greatest, Mr Russell said. Starbucks also is adding to its six global farmer-support centers, with a recent new facility in Sumatra, Indonesia, and another one opening in Mexico next year.