• Starbucks to Bring Lattes to Mexico
• ETHICAL COFFEE ON THE MENU AFTER STARBUCKS SIGNS FAIR-TRADE DEAL

Starbucks Hopes to Expand in 2002
ALLISON LINN
Associated Press
February 27, 2002

Like any fast-growing global corporation, Starbucks Coffee Co. hopes to
spend 2002 expanding aggressively into the international markets while
building record revenues.

But unlike most major corporations, it is also is working feverishly to
maintain its image of a homegrown company devoted to doing good works.

The question, Chairman Howard Schultz said at the company's annual
shareholders meeting Tuesday, is "Can we get big and stay small?" The
two-hour gathering, in a packed house at Seattle's Benaroya Hall, opened
and closed with the traditional trappings of a shareholders meeting -
financial outlooks and a shareholder votes on whom to elect to the board
and hire as an independent auditor.

But the Seattle coffee retailer spent most of the presentation listing
its good works. One video montage showed the company's employees
cleaning up parks and serving coffee at AIDS fund-raisers. Another
touted its efforts to offer medical care in the areas where it grows
coffee, and another was simply devoted to employees talking about how
much they like working at Starbucks.

That wasn't all. Ethnic music played and a gospel choir sang "I Believe
I Can Fly." Employees waved flags from around the world - including the
American flag, which got a standing ovation.

A Sept. 11 survivor who found refuge in a Starbucks store was
spotlighted in the audience, after his reunion with the man who pulled
him inside to safety. A New York City-based Starbucks manager shared a
tearful embrace with Starbucks President Orin Smith, after receiving a
corporate award for his efforts to serve coffee to rescue workers and
victims after the attacks on the World Trade Center.

It would be easy to forget that this is a company that makes and serves
coffee. That's no mistake.

"There's probably only so much we can say about the coffee," Smith said
in an interview after the meeting.

Although the company believes it serves and sells good coffee, Smith
said it also thinks it needs more than that to distinguish itself from
the competition.

"In some respects this is more a people business than a coffee
business," he said.

As the company continues to expand rapidly - another 1,200 stores will
open this year, including many internationally - Smith said it's worked
harder to maintain its image than ever before.

"I think we have been paranoid about that issue," he said.

But for all Starbucks' efforts to brag about its good works, some people
aren't satisfied.

For the second year, about 50 organic foods proponents gathered outside
the meeting to protest the company's use of genetically modified foods
and milk containing artificially produced growth hormones.

Smith said last year Starbucks would aim to get rid of milk containing
artificial growth hormones. This year, Smith said that proved to be too
complicated and costly, and the company has decided only to offer the
option of organic milk - for an added price.

"We did our best with it," he said.

"Starbucks has actually been making a few good steps," said Lisa
Ramirez, a protester with Friends of the Earth.

But she said the groups would continue protesting. "They can do a lot
better," she said.

Some shareholders, fed up with the protesters, called on the company to
begin labeling food containing genetically engineered ingredients in an
effort to appease the protesters. A shareholder resolution on the issue
garnered just 7 percent of the vote.

Starbucks said its coffee products are not genetically modified, and
that the company would support federal legislation on labeling but not
do it on its own.

ETHICAL COFFEE ON THE MENU AFTER STARBUCKS SIGNS FAIR-TRADE DEAL
The Independent (London)
February 27, 2002, Wednesday

STARBUCKS, THE scourge of anti-globalisation protesters, yesterday
agreed to sell "politically correct" coffee at its shops in Britain.

The American-owned chain, which has 4,000 outlets worldwide, has struck
a symbolic deal in which Third World farmers will receive a higher price
for their crops. An agreement has been reached with the Fairtrade
Foundation, which represents Third World producers and monitors farmers'
environmental and ethical standards.

Ian Bretnam, Fairtrade's deputy director, said: "The main significance
is the profile; the awareness it gives to fair trade. From what we
understand, the volume is not likely to be too significant."

After introducing "ethical" coffee to its shops in North America two
years ago, Starbucks will now extend the range to the UK this summer.
The Costa Coffee chain already offers fair-trade coffee here.

The move follows dire warnings about the plunging prices in some coffee-
producing countries at the World Coffee Conference in London.

Due to overproduction, the price of coffee beans dropped around 70 per
cent last year, causing hardship for farmers in South America, south and
east Asia and parts of Africa.

A report by Oxfam said that the price of raw coffee exported from
producer countries accounts for less than 7 per cent of the cost of
coffee to Western consumers - the rest goes to processors and retailers
in rich countries. It named Starbucks and Nestle as among the chief
culprits.

Starbucks, which reported record profits of $ 805m (pounds 570m) in the
three months to the end of December, buys about 1 per cent of the global
coffee crop.

A company spokeswoman said: "We are delighted to have been able to sign
this agreement, it's not just advertising."

Starbucks to Bring Lattes to Mexico
Associated Press
February 26, 2002 Tuesday

Starbucks Coffee International will partner with a unit of the fast-food
and food distribution company Alsea SA de CV to open coffee shops in
Mexico, the company announced Tuesday.

The gourmet coffee retailer's international arm said it expected to open
the first shop in Mexico City by the end of the year. The partnership is
with SC de Mexico SA, a unit of Alsea.

The announcement marks the company's first venture into the Latin
American market, and Starbucks has said it has a strong interest in
expanding rapidly into the region. It said Tuesday it is looking at
opening Starbucks stores in Argentina, Brazil, Chile, Colombia, Peru,
Puerto Rico and Venezuela.

Starbucks also announced that it will open stores in Indonesia in a deal
with Indonesian conglomerate PT Mitra Adiperkasa.

The Seattle-based coffee maker also said it had signed an agreement
allowing the company to sell Fair Trade coffee, which its supporters say
provides coffee farmers with a better wage, in its international stores.