The which highlights its vast global performance.

The current restructuring of the world-economy under globalcapitalism has further integrated international trade and production (Gereffi et el 1994:159). Globalisation has broken down geographicalboundaries and with improvements in transport and telecommunications, it hasallowed transnational corporations (TNCs) to disperse sections of their operationacross the globe. This has led to the growing importance and complexity ofglobal commodity chains, which have been defined by Hopkins and Wallerstein as’a network of labour and production processes whose end result is a finishedcommodity’ (1986:159). Each input is represented as a ‘node’ (Gereffi et al1994:159) and are linked together in networks, with each stage adding value tothe commodity. Thisessay will explore the global nature of the coffee commodity chain, withreference to Starbucks, to highlight the global power TNCs exert over commoditychains and assess the subsequent implications on other key ‘nodes’. Theimportance of consumption as a driving force of the global commodity chains willalso be discussed, reinforcing the interconnection between the producer andconsumer which is often overlooked.Starbucks,founded in Seattle in 1971 (Ponte 2002:1111), has become the largest chain ofcoffeehouses worldwide (Coe et al 2007:90), stretching across four continents.

In August 2005, it had 2,783 operations dispersed across 34 countries, servingan estimated 33 million customers each week (Coe et al 2007:90) whichhighlights its vast global performance. The company sources its coffee beansfrom plantations in Latin America and Africa where they are harvested andbought from wholesalers before being transported to one of five distribution centresin the US (Starbucks 2017a). Starbucks thrives off the growing global market,opening its 1,000th stores in both China and Japan and continues to expand withfuture plans to open ‘1,500 net new stores across every region’ (Starbucks2013:2) which will add to its sales success market. This reinforces how foodproduction chains have changed in the last four decades, becoming increasingly’industrialized’ and ‘global’ (Dicken 2015:424) through the capitalistinterests of TNCs. Their ability to coordinateand control production in more than one country, manipulating geographical differences,gives them immense control over global commodity chains (Dickens 2011:16). Oneof the main advantages for Starbucks to outsource and establish operations withinthese export-orientated, developing countries such as Costa Rica is the cheaplabour and less strict regulations which are exploited to maximise profits. Thecompany controls several commodity chains that involve transforming the regular’Arabica bean’, grown at high altitudes, into regular coffee or for the growingmarket of ‘speciality blends’ (Starbucks 2017a). However, Starbucks will alwayssearch for the cheapest locations, stimulated through competition.

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The foreigndirect investment that Starbuck injects into the host country’s economy isoften pivotal to its economic development; reinforced by the fact that 20% of Starbuck’s producer countries fall in the lowincome category (Wachalec 2015). Therefore, Starbucks and many other TNCs havethe power to play regions off from each other in a ‘race to the bottom’ to findthe most economically profitable location and drive down costs of production.The impactTNCs have on different global nodes of the commodity chainOn the otherhand, TNCs global dominance can cause negative effects on other ‘nodes’ in thecommodity chain, for example ‘production’ in the developing countries. Many developingcountries rely on coffee for a high proportion of their export earnings.

Ponte(2002:1101) argues it is TNCs priority of maximising profits that are causingfarmers to lose their source of livelihoods. TNCs influence global markets,fluctuating the prices of commodities such as coffee and invest and upgrade intheir functional roles and technologies in a way ‘local’ exporters cannot competewith. Consequently, many small holders are disappearing or are forced to alignthemselves with such international corporations (Ponte 2002). However, thisalso raises issues of dependency, as TNCs still have the ability to lock in orcut out chosen suppliers from the commodity chain; jeopardising the economicdevelopment of the dependent developing country. This highlights the shift ofpower from producing countries to consuming countries, where the headquartersof TNCs are located (Ponte 2002:1107).

Ponte (2002) argues this is due to achange in the coffee commodity chain which has moved from a formal andrelatively stable system where producers ‘had a voice’ (1107) to an economicchain that disadvantages producer countries. In order to resolve these imbalances of productionwithin the global coffee chain, perhaps producer country governments shouldpromote ”conscious consumption”, (Ponte 2002:1107) for example FairTrade. This would ensure a minimum floor price which would help local producersregain some of the total income generated in the coffee chain (Ponte 2002). Inthe case of Starbucks, it has recently achieved the milestone of 99% of its coffee being ethically sourced(Starbucks 2017b).

The increase of Fair Trade within food commodity chains is reflectedin the growth of ‘ethical consumption’. People are becoming increasinglyconscious of where their food has been sourced and willing to pay more for acommodity to ensure local producers receive a just payment; thus supportingtheir livelihoods (Ponte 2002:1116). It also highlights a growth oftransparency within commodity chains which can be seen as a positive move inrevealing how the commodity has in fact been globally configured. Furthermore, Starbucksrecognises the importance of labour as a ‘production factor’ (Dicken 2015:121) within the commodity chain and howits productivity is essential to the economic success of the company; arguablymore so than the cheap labour. Productivity refers to the scale of output perworker for a given wage and is areflection of education and training as well as capital equipment (Dicken 2015).

For example, Starbucks has a number of farmer support centres in Costa Rica andGuatemala and launched C.A.F.

E (Coffee and Farmer Equity) practices in 2004 to ensurefair wages and safe working conditions for its workers (Wachalec 2015). This demonstratesan active interest and investment into the wellbeing of its labour force, withthe capitalist knowledge that it increases motivation and productivity in thelong term which will result in larger outputs andthus profits.Coffeeis clearly a global commodity but its production can also be seen as a ‘localprocess’ as its bound to specific climate, soils and often socio-culturalconditions (Dicken 2015:424). For example, four countries generate 60% of totalcoffee exports: Brazil, Vietnam, Columbia and Indonesia (Dicken 2015:429),showing how the food industry is literally grounded by ‘biophysical processes'(424) and making it fundamentally different from other manufacturingindustries.

Despite this, Starbucks, is globally strategic and only operateswithin affluent consumer markets where the demand for coffee is high to ensure largerprofits. TNCs follow capitalism in this respect. For example, Starbuck’sdistribution is largely concentrated in Global North countries such as the UK,where disposable incomes are high and coffee has strong cultural values.

As aresult, there is a growing divide within the nodes of the commodity chain, asthe Global South is associated with production and Global North with consumption.This is reinforced by the fact that statistically, over 90% of coffeeproduction takes place in developing countries (Ponte 2002:1101).Consumption as a drivingforce of global commodity chainsConsumption can be seenas the driving force of global commodity chains as ultimately the processes arebased on the willingness and ability of a population to buy and consume theproduct themselves (Dicken 2011:20).  Inrecent years consumer demands have become more complex as globalisation hasincreased choice on the market and resulted in people having widely varying’food agendas’ (Dicken 2015:431). Furthermore, this has been enhanced by therise of ‘commodification’, where products are induced with ‘symbolic qualitiesand culturally embedded meanings’, (Dicken 2010:20) increasing the importanceof consumerism. In turn, multinational firms such as Starbucks have manipulatedthese changing patterns through marketing strategies and highlights a directreflection of producer’s perceived need to meet the increasing fragmenteddemand of a consumer (Dicken 2011:20).

For example, Starbuck’s corporatewebsite promotes ‘speciality coffee’ and sells thirty different types of coffeeand tea, describing individual coffees as ‘exotic’ and ‘earthy’ (Coe et al2007:90) which fuels ideas that coffee produced in foreign land is moredesirable. Ponte (2002:1111) argues the global coffee chain has gone through a”Latte revolution,” through the increase in variety of beans, to theextent that Starbucks has developed a specialist ‘lifestyle’ drinks market. Herefers to this as the ‘Starbucks factor’ where Starbucks has become a ‘consumptionexperience’ and ‘de-commodifiedcoffee’ (1111). This capitalist technique is particularly evident inbuyer-driven commodity chains such as coffee, (rather than producer-driven) as productdesign, advertising and brand- named merchandisers are key actors to this chain(Ponte 2002:1100). It suggests that through this investment in advertisingtheir brands, corporations such as Starbucks have managed to keep control ofthe coffee chain (Dijk et al 1998).On the other hand, theglobal nature of commodity chains can be concealed through capitalism. Althoughoften ignorant of the fact, UK consumers for example, are intricately connectedto labourers working on coffee plantations in Costa Rica as they both representkey ‘nodes’ in the commodity’s journey.

However, Coe et al (2007) argues thatprice tags and brand names reveals nothing of this production process or forexample, the working conditions of the labourers and therefore disconnects theconsumer and producer. As a result, ‘even a person drinking coffee in Starbuckmakes the customer complicit’ (Coe et al 2007:90).  It is therefore important to recognise theentire circuit of production, distribution and consumption as a ‘bundle ofsocial relations’ (Watts 1999:307) to highlight the importance of theinteractions between people, despite being geographically apart.Globalcommodity chains may be a way of charting the geographical journeys taken bycommodities but they are not deterministic. TNCs are constantly manipulatingand adjusting supply chains to maximise efficiency and thus profit.

This isoften achieved by shortening the time between production and consumption whichhas been enabled through improvements in ‘circulation technologies’ –transportation and communications technologies, which overcome the frictions ofspace and time (Dicken 2015:83). Harvey (1991) refers to this as ‘time-spacecompression’ and represents a capitalist approach to commodity chains through thecontinual attempt of driving down costs and prioritising revenue. Starbucksechoed this approach in 2008 when it recognised ‘outsourcing had led tosignificant cost inflation’ (Cooke 2010) and the supply chain was struggling tokeep up with demand. It regionalized its coffee production and established anextra five distribution centres across different countries to reducetransportation costs and get supplies to their stores faster (Cooke 2010). Starbucks ensures thecommodity chain is consistently simplified to avoid future errors and as aresult of the corporate strategy has been able to ‘save $500 million in the lasttwo years’ (Cooke 2010). On the other hand, this could also represent apotential risk to globalised commodity chains because as the web of connectionsexpand, it becomes more difficult for the company to control what is happeningin each ‘node’ and overall control of the chain could be compromised. Forexample, Cooke (2010) states Starbucks was arguably a ‘victim of its ownsuccess’.

 In conclusion, recenttransformations within the global economy have caused for a massive change inthe nature of production, distribution and consumption and have globalisedcommodity chains. Through the analysis of Starbuck coffee as a case study, thisessay has demonstrated how TNCs are able to maximise their locationalflexibility and exploit geographical differences, in terms of labour and stateregulations, to ensure large profits and global power (Dicken 2015:242). Inturn, the global coffee commodity chain has undergone dramatic changes,arguably becoming more globally complex, despite the growing of the commoditybeing limited by climate.  1,943BibliographyCooke, J.

(2010) “FromBean to Cup: How Starbucks Transformed its Supply Chain.” CSCMP’s SupplyChain Quarterly. online Available at:http://www.supplychainquarterly.

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(2007) EconomicGeography: A contemporary introduction, Blackwell: Oxford. Dicken, P(2011) The Global Shift: Mapping the changing contours of the worldeconomy. (6th eds) New York, Guilford Press.

Dicken, P (2015) TheGlobal Shift: Mapping the changingcontours of the world economy (7th eds) NewYork, Guilford PressGereffi, G, Korzeniewicz, M (1994)Commodity Chains and Global Capitalism.Westport, Connecticut : Praeger. Harvey, D (1991) The Condition of Postmodernity: An Enquiryinto the Origins of Cultural Change Wiley-Blackwell.Hopkins, Terence K.

, andWallerstein, Immanuel (1986) ‘CommodityChains in the World-Economy Prior to 1800′ Review 10, 1: 157-70.Ponte, S (2002) The’Latte Revolution’? Regulation, Markets and Consumption in the Global CoffeeChain. World Development Vol. 30, No.7, Elsevier Science Ltd.

Starbucks (2013) StarbucksCorporation Annual Report. Seattle: onlineAvailable at: 14 Nov.

2017.Starbucks(2017a) Starbucks Commodity Chain onlineAvailable at: 14 Nov. 2017.Starbucks (2017b) Our Available at:https://www.starbucks. Accessed 14 Nov.2017.Starbucks (2017c) Manufacturing/Roasting Plants andDistribution. online Available at: https://www. 17 Nov. 2017.

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M., Heijbroek, A.M.A Wazir, M.R.I.

A., & de Wolff, G.S.M.

(1998)The world coffee market. Utrecht:Rabobank International.Wachalec, A (2015) Manufacturing| Starbucks Coffee. The Ohio State University online Available at: Accessed 14 Nov.

2017.Watts, M (1999) Commodities, in: P, Cloke, P Crang andM, Goodwin (eds) Introducing HumanGeographies, London: Arnold.  


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