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Starbucks Displays Their Slow Supply Chain
May 21, 2008

I stopped in at my local Starbucks on Sunday morning to get some coffee beans and saw an interesting sign. The signed advertised that the Pike Place Roast beans had been roasted on April 13, in Carson Valley, Nevada.

I'm a bit of a coffee snob and I thought, for a place that has been hyping "fresh roasted" coffee, beans that are almost a month old aren't exactly "fresh." Most coffee experts say that beans are beyond their peak freshness after about 10 or 14 days.

Would Starbucks so openly display their slow supply chain if more customers knew that April 13 isn't exactly "fresh roasted?" The bag was proudly labeled as "Freshly Scooped on May 10, by Chad." Scooping isn't exactly the "value added" step in that value stream. I guess if "freshly scooped" is all you have, then that's what you brag about.

I posted a question about this on the "Starbucks Gossip" blog. I got a couple of responses from (I suppose) Starbucks employees.

We're guaranteed to get the fresh-roasted beans within 14 days of roasting. As my store is 10 miles away from the Kent, WA roasting plant, it takes us 1 or 2. If they have April 13 beans -- about a month old -- then they haven't got their order pars sorted out yet.

By "order pars," the commenter means their inventory re-stocking levels. If the inventory levels were set too high, they'd have inventory sitting in the store longer than the 14 day window. But another employee disagreed:

I too thought that there was a promise of Pike Place being brewed within 14 days of roasting. I sent an email to the coffee department asking about this, because we were receiving coffee that wasn't going to fall within those guidelines and I wondered what to do with the coffee. His answer was simply "we never promised the 14 day freshness, but it is a goal we are striving to reach." I thought his answer was interesting. I am still receiving Pike Place that isn't within the 14 days and I have, in fact, set very accurate pars. It isn't the stores problem, it falls back to the roasting plant.

I wonder what the root cause of the supply chain problem would be? I wonder if the Starbucks associates are frustrated that corporate isn't meeting their guidelines?

Coffee roasting is a fairly simple production process (although I'm sure their volumes are a challenge). If it takes a week between roasting and shipping, that means the store needs to use a certain supply of beans within 7 days. It's not that coffee beans "go bad" or would strictly need to be disposed of after 14 days (it's not like spoiled milk), but I wonder how their supply chain perform if they had a rule of "must throw out beans after 14 days." I'm pretty sure my old local coffee chain in Phoenix had a similar policy (and I remember them displaying that their beans, roasted on site (in something like this), were roasted 3 to 5 days ago pretty consistently). Different supply chain, different performance.

Starbucks has a small number of huge roasting plants (the largest is 700,000 sq ft in York, PA). They're definitely going for "economies of scale," don't you think?

Posted by Mark Graban on May 21, 2008 | Comments (1)