Starbucks Supply-Chain Program Holds Lessons for Small Businesses

Neil Cotiaux Profile Shot2 by Neil Cotiaux on March 14, 2014
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Shortly after New Year’s, as customers craving warmth and comfort descended on a Starbucks in frigid North Canton, Ohio, store manager Beth Shelton was nowhere in sight. She was flying south on company business to the sunny hills of Costa Rica.

Her trip wasn’t just another employee perk, but rather a chance to take part in Starbucks’ Origin Experience. Launched in 2010, the “immersive coffee education program” allows associates to interact with the Seattle-based company’s overseas vendors and understand its approach to working with foreign partners. Starbucks then encourages them to share what they’ve learned with colleagues and clientele.

The ambitious, all-expenses-paid program offers some ideas for small-business owners who aim to enhance their relationships with suppliers, employees, and customers.

Ground-Level Learning

Shelton (pictured), one of 110 employees and partners invited to participate in the 2014 program, experienced Starbucks’ “farm to cup” philosophy firsthand for nearly a week. She sampled locally grown coffee, visited growers, toured a mill, explored a company-supported agronomy center, and picked cherry beans.

The highlight of her trip was an emotional presentation by a grower. “[Because] we started buying from them, his daughter was able to go to college, he was able to provide a computer for the first time for his family, and he was up speaking to us, just sobbing — and so were we,” she says.

Shelton swapped email addresses with the farmer’s children, who speak English, so they could keep her apprised of “the care of the plant” and so she could explain how their coffee is being brewed and merchandised in Ohio.

Back at home, Shelton is sharing her experiences with co-workers across Northeast Ohio, developing a book and DVD for customers, and holding coffee tastings at multiple stores. Sharing “keeps the story alive,” she explains.

She also learned a thing or two about sustainability. “I need to think more like a farmer. A farmer doesn’t waste anything,” says Shelton, who has started to clamp down on waste at her store. For example, her crew is now saving an average of nearly 15 gallons of milk per week and is measuring coffee more uniformly.

Small-Business Applications

Joseph Michelli, author of Leading the Starbucks Way, believes small businesses have the ability to replicate parts of the Origin Experience. For example, annual visits to suppliers can help educate employees, strengthen vendor relationships, and weave a narrative that bolsters customer loyalty.

“Many people don’t do this because it’s difficult to understand the payoff,” Michelli tells the Intuit Small Business Blog. “You don’t want to blow the bank on something like this, [but] these things are really good.”

Michelli advises avoiding merely cursory visits. “We can get very siloed organizationally. This allows you to cross-pollinate the organization,” he says. He lauds the decision by apparel seller Zappos to have its call center employees work several days at a warehouse, which creates “empathy for what happens when somebody places an order.”

Vendor visits also can help customers become emotionally invested in a brand.

“There are plenty of dry cleaners who don’t dry clean on premises, right? What would be the problem for you to be able to take your people over to wherever the dry-cleaning process is done, to have them understand the environmentally friendly chemicals that are being used?” he asks. After that, they could share the company’s socially responsible practices with its customers.

Likewise, a restaurant could take servers to a local farm where some of its menu ingredients are raised or cultivated. “It just adds a story to the service delivery that I think most of us are looking for,” Michelli says.

The bottom line: Supply-chain immersions pay off, if only to strengthen ties with vendors, he says. Sharing with customers the information gleaned during these visits can generate repeat business, too. After all, he says, hearing how Starbucks helps farmers develop sustainable practices and earn a living through fair trade made Michelli “super-comfortable buying the Starbucks product at the price mark.”

Any small business could benefit from having more customers feel similarly about its products or services.

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