California Governor Jerry Brown should be pleased with Starbucks Corp. (NASDAQ: SBUX). The coffee chain will stop using the state as a source for its Ethos Water. Fortunately, Starbucks has other sources.
Management at Starbucks announced:
Due to the serious drought conditions and necessary water conservation efforts in California, Starbucks is moving the sourcing and manufacturing of Ethos Water out of state.
Beginning the first week of May and over the next six months, Starbucks plans to move production to its Pennsylvania supplier, while simultaneously exploring alternatives to transition to a new source and supplier to serve the company’s West Coast distribution.
While the U.S. Drought Monitor shows that almost all of California has water problems, only a portion of Pennsylvania does. About half of California suffers from “exceptional drought,” which is the worst designation the Monitor gives, and another quarter has “extreme drought,” the second worst measure. However, only about quarter of Pennsylvania carries the designation of “abnormally dry,” which is the Drought Monitor’s best measure, except where there is no drought trouble at all. Starbucks can serve Pennsylvania by taking only water from the state’s drought-free sections.
Brown would be helped if other companies would source their water needs outside of California. It is possible, though, that few companies have the level of water need that Starbucks does. Brown may be stuck with his water conservation plan, which he hopes will reduce water consumption by 25%.
Perhaps Starbucks could really help Brown and truck some of its water supply from Pennsylvania to the West Coast. Starbucks founder Howard Schultz likes to show how community minded he is and he recently has been the champion of some of the socially downtrodden. The list of downtrodden people might be expanded to include the residents of the drought-plagued state.