Starbucks Commits to a More Diverse Supply Chain

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Diving brief:

  • Starbucks plans to increase its annual spend with various vendors to $1.5 billion by 2030, nearly double the roughly $800 million the company spent with various vendors in fiscal 2021. according to a blog post on the company’s website.
  • Starbucks will also partner with other organizations to develop and increase supplier diversity across its global system as part of its Supplier Diversity and Inclusion program.
  • Yum Brands outlined its plans to increase diversity among suppliers, executives and franchisees in July. McDonald’s announced similar commitments the same month, aimed at allocate 25% of its supply chain spend to diversified businesses by 2025, or approximately $3.5 billion.

Overview of the dive:

The evolution of Starbucks’ DEI Commitments to now include Supply Chain Commitments may reflect current supply chain shortages hampering the global restaurant industry. Starbucks specifically faced shortages of cups, coffee syrups, cake pops and more.

Starbucks says increased spending on the supplier diversity and inclusion program will help ease some pressures on the supply chain. The program can also give a boost to small businesses. Starbucks says its supplier diversity and inclusion program now includes suppliers of all sizes and categories and supports more than 6,400 jobs, contributing to an economic impact of $1.2 billion.

Starbucks will track the diversity and inclusion progress of its suppliers by sharing annual updates. The company will also help reach and integrate smaller, diverse businesses by launching a free, open-source toolkit in partnership with Arizona State University.

McDonald’s recent commitment to diversity appears to go further, pledging to roll out annual equity and inclusion training not only within its company, but also at more than 20 of its largest suppliers.

Such initiatives seem to be proliferating throughout the industry. Earlier this month, major distribution company Sysco added five new partnerships to enhance its supplier diversity initiatives, for example.

These efforts indicate that large restaurant companies are supportive and can expect buy-in from their partners for their diversity efforts. This trend could affect other industries given the scale of commitments from McDonald’s, Yum Brands, Starbucks and others. According to Reuters, in In a July internal memo, McDonald’s acknowledged that its size and scale are an “asset in driving societal change and engaging others.”

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