Navigating Coffee's Future: Challenges for Starbucks and Nestlé
Written on
Chapter 1: The Scarcity of Coffee and Water Resources
Recent findings have raised alarms about the looming scarcity of coffee cultivation and water supplies. Studies indicate that rising temperatures due to climate change may render coffee cultivation one of the most susceptible agricultural sectors.
Water management is a particularly contentious issue for Nestlé. The company has faced numerous legal challenges regarding water access and rights across various regions in the U.S. Notably, in 2020, Nestlé successfully defended against a lawsuit from activists in Michigan, who argued that the company should not be permitted to withdraw groundwater to support its operations.
In April 2021, Nestlé sold its North American water division to a private equity firm for $4.3 billion. This sale transferred the Nestlé Waters North America (NWNA) unit to One Rock Capital Partners, which has since rebranded it as BlueTriton Brands. Despite this transition, Nestlé continues to receive criticism for its water extraction practices in ecologically vulnerable regions of California and Florida. As drought conditions have intensified, leading to wildfires, Nestlé's water operations have drawn considerable scrutiny, resulting in a series of lawsuits, including a cease-and-desist order in California.
Section 1.1: Starbucks' Labor Issues
In a surprising development on May 11, 2023, labor unions representing Starbucks employees filed a complaint with the International Labor Organization (ILO), alleging that the company had violated labor rights as outlined in the 2020 Global Human Rights Statement.
Reports have surfaced of increasing union activity within Starbucks, the world's largest coffee retailer. The National Labor Relations Board (NLRB) has taken a leading role in addressing these issues, with prominent U.S. Senators like Bernie Sanders voicing their concerns.
Senator Sanders criticized Howard Schultz for declining to testify at a Senate hearing regarding Starbucks' adherence to federal regulations on unionization rights. Following Schultz’s refusal to appear, Sanders, who chairs the Health, Education, Labor and Pensions (HELP) Committee, insisted that the public should demand accountability from both Schultz and Starbucks for their alleged misconduct.
The first video titled "Starbucks Is Struggling, the Decline Of the Coffee Giant" offers insights into the challenges facing Starbucks as it navigates these issues.
Chapter 2: A Deeper Look at Starbucks' Challenges
In addition to the aforementioned controversies, the question of whether Starbucks is experiencing a decline has been thoroughly examined.
The second video, "Is Starbucks on the Decline? A Deep Dive into Its Success and Challenges," investigates the successes and hurdles Starbucks faces in the current market landscape.
Read the full story: Back To Life — Nestlé's Water Crisis & Starbucks' Labor Relations Case Won't Stop Their Push Into International Markets.