Dive Brief:
- Starbucks plans to increase its annual spend with diverse suppliers to $1.5 billion by 2030, almost double the roughly $800 million the company spent in FY 2021, according to a blog on the company's website.
- The coffee chain will also partner with other organizations to develop and grow supplier diversity throughout its global system.
- Starbucks will track its supplier diversity progress by sharing annual updates. The company will also help reach and onboard smaller, diverse-owned businesses by launching a free, open-source toolkit in partnership with Arizona State University.
Dive Insight:
Starbucks is ramping up its supplier diversity program as the company adds new partners to ensure its cafes are stocked to meet soaring demand.
The company is taking more steps to work with smaller suppliers, and its diversity initiative now includes suppliers of all sizes and categories. COO John Culver said in a Q4 earnings call that the coffee chain is working with suppliers "to invest in wage for their workers."
Large companies have stepped up efforts to work with more minority and women-owned businesses, with 53% of North American executives saying supplier diversity is a "high priority" in a Jaggaer-Tealbook survey from November.
Yum Brands' outlined plans to increase diversity among suppliers, executives and franchisees in July. McDonald's announced similar commitments in the same month, aiming to allocate 25% of its supply chain spend toward diverse businesses by 2025, or about $3.5 billion.
McDonald's recent diversity commitment pledges to deploy annual equity and inclusion training not just within its company, but also at more than 20 of its largest suppliers. Earlier this month, major distribution company Sysco added five new partnerships to enhance its supplier diversity initiative.
These efforts signal that major restaurant companies are encouraging and may expect buy-in from their partners for their diversity efforts. This trend could affect other industries given the scale of the commitments from McDonald's, Yum Brands, Starbucks and others. According to Reuters, in internal memo from July, McDonald's acknowledged its size and scale is an "asset in driving societal change and bringing others along."
