Starbucks Buys First Coffee Farm to Expand Grower Support

Starbucks Corp. (SBUX) bought a farm in Costa Rica, the first such purchase by the world’s largest coffee-shop operator as it expands a grower-support program and sources beans farmed in an ethical fashion.

The 240-hectare (593-acre) holding will help support growers and their families, while allowing Starbucks to create new blends of coffee to sell, Chief Executive Officer Howard Schultz said in a statement. Seattle-based Starbucks has committed to buying only ethically sourced coffee by 2015.

Starbucks, which sells fair-trade blends and reserve coffees from countries such as Nicaragua and Cameroon, has spent about $70 million during the past 40 years on farmer-support programs and loans. It opened its first farmer-support center in San Jose, Costa Rica, in 2004 and has since opened ones in Rwanda, Tanzania, Colombia and China.

The farm, which employs about 70 people, “has plenty of land for us to be able to experiment with varieties,” Craig Russell, senior vice president of global coffee, said in an interview today.

“We wouldn’t rule out whether we’d need other property,” Russell said.

The company didn’t disclose how much it paid.

Starbucks fell 0.2 percent to $56.83 at the close in New York. The shares have gained 6 percent this year, while the Standard & Poor’s 500 Index has advanced 8.6 percent.

Earlier this month, McDonald’s Corp. (MCD), the largest restaurant chain by sales, said it will invest $6.5 million during the next five years to help coffee growers in Guatemala produce more high-grade beans from sustainable farms. The Oak Brook, Illinois-based company sells McCafe-brand caramel mochas, as well as flavored frappe coffees.

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net