Coffee and Starbucks Essay

2881 Words Jun 4th, 2013 12 Pages
Starbucks Coffee Distribution Preethi Kasireddy
[Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]

Network

Preethi Kasireddy

Esmeralda Ayala Ari Eryorulmaz

Billy Jung

[Company Address]

Table of Contents Abstract…………………………………………………………………………………………....2 Background and Problem Definition……………………………………………………...2 Current Situation………………………………………………………………………………..2-5 Demand………………………………………………………………………………....2-3 Supply Side Concerns…………………………………………………………………..3-4 Prices……………………………………………………………………………………4-5 Distribution Network………………………………………………………………………...…5-7 Phase 1: From Suppliers to Distribution Centers…………………………………….....5-6 Phase 2: From Distribution Centers to
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Therefore, it follows the Starbucks will plan to meet 100% of the demand projected from 2011-2016. Supply Side Concerns Starbucks uses C.A.F.E Practices to ensure sustainable supply of high quality coffee beans. C.A.F.E Practices are a set of guidelines set to ensure high quality coffee beans, promote equitable relationships with farmers, workers, and communities, and protect the environment. All suppliers for Starbucks coffee beans must meet the minimum prerequisites of high quality Arabica coffee bean, economic transparency, performance, supply network of farms, and coffee growing and processing practices. Suppliers were chosen meticulously to smooth the forecasted supply fluctuations and long supply response times. Brazil, Vietnam, and Columbia make up the majority of the global supply for Arabica coffee beans for Starbucks, with market shares of 38%, 14.5%, 12.3%, and respectively.

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Brazil, the largest supplier for 2010, is expected to have a decrease in harvest of 25% percent from 2010, while Brazil’s domestic consumption is expected to increase 5%, Mexico showed a decrease in exports of 17% in 2010. Columbia also poses a small risk due a major outbreak of fungus that affected supply in 2010, as well as Costa Rico due to adverse weather. Contingent upon these risks and the 2010 export growth/decline percentage, below is the proposed breakdown of import suppliers for 2011-2016. We

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