Collaborating with activists: How starbucks works with NGOs

Starbucks CEO Orin Smith was in for an unpleasant surprise at his company's annual shareholders meeting in February 2000. The meeting had always been a fun, all-day affair during which shareholders from around the country gathered to celebrate the company's success. That year, however, Smith and other senior Starbucks executives heard complaints from Global Exchange, a non-governmental organization (NGO) focused on human rights. Dedicated to promoting environmental, political, and social justice around the world, Global Exchange criticized Starbucks for profiting at the coffee farmer's expense by paying low prices and not buying "Fair Trade" coffee beans. Not only did the activists disrupt the company's annual meeting, but they also threatened a national boycott of Starbucks if the company refused to sell and promote Fair Trade coffee. Although Smith strongly disagreed with the activists' use of his company's shareholders meeting as a public forum, he knew Starbucks would likely face serious reprisals if it did not address the issues raised by Global Exchange and a growing list of other NGOs around the world. This article, written in cooperation with executives from Starbucks, analyzes the company's ultimate decision to sell Fair Trade coffee and subsequently work with other NGOs to ensure that small farmers receive a living wage, in an effort to live up to the standards Starbucks set for itself in the area of social responsibility(1).