Can Starbucks benefit from ownership of coffee plantations?

Hi Asharita, this is an interesting question. The short answer is yes; they can benefit from coffee plantation ownership. They are getting positive outcomes from their plantations. However, the benefits aren't as straightforward as one might think at first. Starbucks owns a few farms worldwide, which is very little compared to their coffee beans demand. According to the company's records, Starbucks buys nearly 3% of green coffee production globally. Considering this fact, having nine coffee plantations is negligible in coffee sourcing alone. Coffee production is the riskiest element in the industry. Many factors put farmers at risk, like climate change, extreme weather events, and political unrest, among others. Starbucks may have better control over production processes when owning coffee plantations, but the company would also absorb many of the risks involved in coffee production. Risk management might be one of the main reasons against owning coffee plantations at scale, particularly in more vulnerable producing countries. Instead of getting strict quality controls and promoting standardization, Starbucks uses its coffee farms as research, development, and knowledge sharing centers. The main goal of these coffee plantations is to influence their providers, which can be companies, cooperatives, family estates, and individual farms across producing countries. So, the significant benefit of Starbucks coffee plantations is promoting their quality standards among coffee producers, which aren't solely focused on yield and quality scores but sustainability. In this regard, Starbucks developed a joint initiative with Conservation International to create and promote an ethical sourcing approach called Coffee and Farmer Equity (C.A.F.E.) practices. Apparently, Starbucks' interest in coffee farms ownership comes from an interest in developing science and technology applied to coffee production. Many urgent problems require advanced science and technology to deal with them, so it's good news to have big companies investing in them. Cynics would say that spending money on sustainability isn't praiseworthy. Especially in such big and controversial companies like Starbucks, critics tend to point out their behavior regarding unionization, baristas living wage, and coffee quality. On balance, I believe that it's positive to have big companies investing in research and development, as long as they share their insights with coffee producers.