Starbucks cut ties with Freshways with immediate effect

When Starbucks coffee shops re open it will no longer be using Freshways milk having this week decided it will source from Arla in future. The fact this change of milk supplier has taken place so suddenly is unheard of. Note some Starbucks franchisees will continue to use locally sourced milk. 

On the 22nd April this bulletin highlighted the eyebrow raising treatment of and questionable communication by Freshways to its loyal supplying farmers, and how for three consecutive weeks this had attracted the attention of numerous press, most notably The Daily Mail which savaged and discredited its owner Bali Nijjar in a way that no dairy company senior executive has been savaged before.

The bulletin commented “The adverse press publicity has not gone unnoticed with several Freshways customers in food service, allegedly exploring how they can distance themselves from the processor’s constant negative press coverage. For sure, most retailers, food service and others are keen that throughout the Covid 19 period, processors treat all their loyal supplying farmers fairly and responsibly”. 

Freshways currently have the worst record of any UK dairy processor of how their numerous  changes  have seriously impacted on their  farmers finances  during Covid 19, whilst at the complete opposite end of the spectrum is Starbucks’ new partners Arla. It is no coincidence why the chain moved.

Freshways unprecedented treatment of farmers includes short notice to dump milk without payment, farmers pushed (some have said bullied) to sign new T & C’s or face a June price cut, a retrospective price cut, buying cheap spot milk, and extending payment terms to farmer suppliers , not to mention Freshways increasing the price elderly care homes pay for milk during the Covid pandemic . In addition Freshways directors have come in for criticism from their own farmers who are annoyed Freshways   continue to rack  up serious losses whilst dividends and payments appear to have filled its Directors pockets

This toxic cocktail was always going to come with repercussions. The instant loss of an estimated  10% of its volume to Starbucks is the first blow.

Freshways will probably claim that Starbucks moved because Arla offered cheaper milk, but that would be a laughable, pathetic and even rather desperate claim to make. Indeed, one contributory factor is believed to be that Freshways just delivered the milk to a minimum standard with no added standards or policy on animal welfare or sustainability. It’s no secret that some Freshways suppliers have previously trumpeted the simplicity of the contract, the milk testing frequency and the simple basic standards they have to achieve believing it is a positive. Starbucks is a global brand, as is Arla, and there is little doubt Starbucks would have been attracted to Arla’s calf policy, Arlagarden and 360 programs, plus more. The notion that only retailers are focused on brand protection is false because many food services match them for focus.

Freshways have significantly more problems than other processors and could do with a white knight or Harry Potter to quickly help the firm get out of these very choppy and troubled waters and to help improve its dreadful communications.

Sadly, Freshways farmers are not between a rock and a hard place they are between a rock and no place as Arla have been very public in keeping its recruitment door firmly bolted. If it was open then Arla would have every Freshways farmer in the land queuing up join it and it wouldn’t have a business left. At this moment in time few people would lament its passing.