Ethiopia and Starbucks
Ethiopia: Improved Relationship with Corporate Giant Promises Benefits of World-Wide Brand Development and Marketing to Boost Coffee Sector
George Washington University (Washington, D.C.)
25 September 2007
Posted to the web 25 September 2007
Members of Geneva’s diplomatic community gathered today at an event hosted by The George Washington University Law School’s Creative and Innovative Economy Center to acknowledge the successful resolution of the standoff between Ethiopian coffee growers and corporate coffee giant Starbucks. Substantial controversy surrounded a decision last year by Starbucks Corporation to oppose Ethiopia’s efforts to trademark the names of its most famous coffee regions Sidamo, Yirgacheffe, and Harar. Representatives of the government of the Federal Democratic Republic of Ethiopia and senior executives from Starbucks agreed to sign a licensing, distribution, and marketing agreement in May that recognizes the importance and integrity of Ethiopia’s specialty coffee names.
“Opposers have become supporters,” remarked Ron Layton, chief executive of Light Years IP, a non-profit intellectual property consultancy that has been advising Ethiopia. “This resolution will help alleviate endemic poverty among the producers and small cartels or traders in the Ethiopian coffee sector. This initiative is not contrary to the interests of the coffee industry, but rather represents a model that allows for all those in the distribution chain from producer to retail distributor to benefit.”
Layton told diplomats at the roundtable that because of this change in negotiating position, Ethiopian coffee growers have seen their export price rise from $1.30 a pound to $2 a pound. In a couple of years, fine Ethiopian coffee should be able to demand as much as $3 a pound. Starbucks has sold Harar and Sidamo in coffee shops for as much as $26 a pound.
“This recent win-win resolution is great news for people in developing countries trying to build brand strategies that will allow them to earn premium price for their goods,” observed Michael P. Ryan, director of GW’s Creative and Innovative Economy Center. “Colombia has pursued a strong marketing and brand strategy with its coffee sector since the 1930s, and today their reputation as quality coffee producers continues to pay off. We see the importance of developing and protecting brands in emerging growth countries as integral to helping them get higher prices. ”
The George Washington University Law School’s Creative and Innovative Economy Center believes creativity and innovation are critical tools in fighting the war on poverty, eradicating disease, and improving the quality of human life through the arts and technology. The center conducts research and organizes educational programs that demonstrate how creativity and innovation drive global economic development and contribute to healthcare.