Starbucks to expand into Latin America?
On a recent book signing tour stop in Madrid, Starbucks CEO Howard Schultz announced that the company has earmarked US $2 billion to invest in an “aggressive and opportunistic way”. The company had been investing in the Asian market rather than Latin America, and that they would now shift attention.This headline really caught my eye. Like or hate Schultz, he was largely responsible for drawing attention to better-quality coffee. I myself am drinking better coffee now than I was before the rise of Starbucks. I don't want to infer that local roasters are not capitalists - after all, they are entrepreneurs and living off of their business. But, Schultz has that definite air of being a capitalist. This, in stark contrast to Planet Bean's Bill Barrett who certainly strives to succeed, but has no broad expansion plans besides being his community's leading expert in what he does, for the benefit of the community.Read: Profile on Planet Bean
[ad#Google Adsense - use me]The reason I found this news so interesting is because all but a handful of the best coffees we drink come from some of the poorest places in the world. The coffee farmer at the source lives poorer than anybody else in the chain, including the consumer at the very end of it. These farmers can't afford not to sell all of their best coffee to an exporter, so they drink the worst of their own product.While Starbucks' expansion into Latin America is focused on the large economy of Brazil, I wonder what impact it will have on the general quality of coffee enjoyed in that part of the world. It's of little development if the coffee is too expensive for most people to enjoy. Starbucks' rise in the developed countries of the world has done little to address concerns of poverty in growing countries, unless sales of Fair Trade coffee have been motivated by the support of local roasters that has developed in response to Starbucks' growth. Perhaps the only good that can come of this is a better appreciation of their own product in these growing countries as more of their product stays home instead of being exported to richer markets.I'd love to hear what an economist has to say about this.