Starbucks Launches Ethos™ Water in North America Stores
In April 2005, Starbucks announced the acquisition of substantially all of the assets of Ethos Brands, LLC, a privately held bottled water company based in Santa Monica, CA, whose mission is to help children around the world get clean drinking water through the support of water projects. The acquisition of Ethos™ Water continues Starbucks long history of integrating social responsibility into all aspects of its business and its commitment to enhancing the lives of the people and communities with which we work. Starbucks believes its brand awareness and relevancy, strong customer base, and broad reach will help Ethos Water realize its vision in a significant and impactful way.

Founded in 2002 by Peter Thum and Jonathan Greenblatt, Ethos Water was born out of Thum’s personal experience of witnessing firsthand the severity of the world water crisis while working in South Africa. This deeply moving experience made him realize that all too often many people take access to clean drinking water for granted. Greenblatt joined Thum to found Ethos Water in part as a way to help raise awareness and support efforts to address the world water crisis. The staggering scale of this crisis cannot be overstated. The magnitude of the problem dwarfs other global health issues; nearly 20 percent of the world’s population lacks access to safe drinking water. (For more facts on the world water crisis, please see the “Water Facts” box at the end of this article.)

Ethos Water comes from protected and sustainable natural springs in the Palomar Mountain range in Southern California and the Pocono Valley in western Pennsylvania. Local sourcing strategies allow Ethos Water to offer bottled water with a diminished impact by reducing the depletion of any single water source and by decreasing the transportation impacts of shipping water long distances. As Ethos Water distribution expands to other markets, it will continue to explore new springs that meet this environmental criteria.

On August 3, 2005, Starbucks officially began selling Ethos Water in its U.S. Company-operated stores. The Company also announced that five cents from the sale of each bottle of Ethos Water will support Starbucks goal of donating $10 million over the next five years to non-profit organizations that are helping to alleviate the world water crisis. Through the Starbucks Foundation, the Company will direct funds from its sale of Ethos Water to support humanitarian water projects around the world via relationships with a variety of nongovernmental organizations (NGOs). The cost of any particular water project varies based on many factors including its scope and local environment. Water projects range from digging wells to creating comprehensive infrastructure and training. In some regions, approximately $25 would enable access to an adequate amount of clean water for one person. Through sales of Ethos Water, Starbucks contributions will help thousands of children and their communities around the world.

To support the launch and increase awareness about Ethos Water, Thum and Greenblatt spent the past 10 weeks traveling the U.S. in a 36-foot, biodiesel-powered motorhome. The tour, dubbed the Ethos Water Road Show, took the two through more than 35 major metropolitan areas across 33 states. Along the route, they met with Starbucks partners (employees) and customers and provided education on the world water crisis. At its core, Starbucks hopes that Ethos Water will educate and empower a growing global community of compassionate people to help alleviate the world water crisis.

Additionally, in several cities, local Starbucks partners and community members joined Thum and Greenblatt for Walk for Water, a symbolic walk designed to call attention to the plight of millions of women and children in developing countries, many of whom must walk several miles every day to retrieve water for their families. The walks ranged from a gathering of 50 to 1,000 participants. Over the course of the walks, Thum and Greenblatt had the opportunity to not only educate and discuss the water crisis, but also to learn from many people who shared with them their own water stories from their native countries.

In the coming months, Starbucks will host several invited NGOs and water experts for a roundtable discussion to gain a deeper understanding of the issues related to the global water crisis and to solicit their feedback as we continue to develop future plans for Ethos Water.

For more information about Ethos Water, please read our press releases at http://www.starbucks.com/aboutus/pressdesc.asp?id=492 and http://www.ethoswater.com/index.cfm?objectid=7A87DCB6-F1F6-6035-BE3F34DF46B17BC6, or visit the Ethos Water website at www.ethoswater.com

Facts about the World Water Crisis
The staggering scale of the world’s water crisis cannot be overstated. The magnitude of the problem dwarfs all other global health issues.

	1.1 billion people (nearly 20 percent of the world’s population) lack access to safe drinking water. [1]
	In 2004, 2.2 million deaths worldwide were attributed to unsafe water; nine out of 10 of these were children under five years of age. [2]
	The lack of clean water kills an estimated 4,500 children a day. [3]

The world water crisis is not confined to any particular region, but impacts people living around the world.

	One-third of the world’s population lives in water-stressed countries now. By 2025, this is expected to rise to two-thirds. [4]
	The crisis spans across all developing countries, but is concentrated in Sub-Saharan Africa and South Asia.

Access to clean water is a basic, daily necessity. Thus, getting water is always a priority and one of the most important and time-consuming responsibilities of millions of women and children.

Many women and young girls must walk an estimated six miles every day to get enough water for their families. [5]

1. WaterAid, 2005.
2. UNICEF/WHO Water for Life, Making it Happen, 2005.
3. Ibid.
4. BBC News, October 19, 2004.
5. UNESCO/International Year of Fresh Water, 2003.

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Starbucks Foundation Launches Regional
Grant Program
The Starbucks Foundation recently announced a new regional grant program designed to empower youth in local communities and provide them with a voice in their community. The new grant program, called Giving Voice, will primarily fund educational initiatives for youth in the U.S. and Canada aged between six and 18 years old. The two focus areas for the grant program are Arts and Literacy—programs that innovatively address literacy and learning for the 21st century, provide high standards of excellence in mastering basic skills and promote youth voices through a variety of venues; and Environmental Education—programs that offer place-based approaches to addressing environmental literacy and that empower youth to be heroes for a sustainable environment in their own communities. The grants will range from $5,000 to $20,000 and will be awarded twice each year. The grant deadlines are September 1 and March 1.

In addition to the Starbucks Foundation’s continued support for two national nonprofits, America SCORES and Jumpstart, the Giving Voice grant program introduces a new relationship with the Earth Day Network, an environmental education organization. This group’s unique approach encourages students to become more responsible, civic-minded citizens.

For more information on the Giving Voice grant program and other Foundation activities, please visit the Starbucks Foundation grants page. The Starbucks Foundation was established in 1997 to create hope, discovery and opportunity in communities where Starbucks partners (employees) live and work. Since its inception, the Starbucks Foundation has granted more than $11 million to more than 700 organizations across the United States and Canada. It is currently in its eighth year of grant making.

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Tazo Tea, Starbucks Coffee Company and Mercy Corps: A Multi-tiered Partnership Approach to Community Development in Darjeeling, India
Since 2002, Tazo Tea —the tea-related operations of Starbucks Coffee Company—has been collaborating with Mercy Corps, an international humanitarian organization, on a project called CHAI (Collaboration for Hope and Advancement in India). This project began a new era of corporate support and social investment in Darjeeling, a region in India where some of the world’s finest teas are grown, by bringing financial, community and human resources to bear on critical social and environmental issues. The CHAI Project was designed to take a proactive approach to community development within the region, aimed at improving the quality of life for more than 11,000 people living in 24 rural areas.

Mercy Corps initiated the project by conducting a needs assessment in the region to identify the areas in which the CHAI Project could make the most impact. The results of the research included recommendations to focus resources on three main areas: advancing rural health programs, youth vocational training and development of self-governing bodies to administer CHAI Project social development projects. Specifically, the assessment found many tea-garden workers developed water-borne health problems due to lack of clean water supplies. Additionally, youth and males in the community were found to have few employment opportunities, resulting in alcoholism and other community issues. Finally, the assessment identified the need to develop community groups to engage in village projects. Projects include the construction of more than 400 latrines, creating water supply systems, forging footpaths to established water supplies and constructing community halls.

Tazo gathered support for the CHAI Project through its tea suppliers, which include tea growers, traders and brokers, all of whom committed to contributing between 2 and 5 percent of their tea sales to support the program. Tazo pledged an additional 5 percent of tea purchases to the program. Based on Tazo’s projected tea purchases from the Darjeeling region, Starbucks, Tazo and Tazo’s suppliers made an initial pledge of $600,000 to fund the project.

Early on, Tazo’s purchases exceeded expectations, which we expect to result in $880,000 in cash contributions to the CHAI Project through 2005. In fiscal 2004, Starbucks provided $100,000, while Tazo and its suppliers contributed $229,000, for a total of $329,000. These additional funds have enabled the CHAI Project to expand even further and sponsor community events to cultivate youth leadership and provide health care to villagers.

Recently, the CHAI Relief Component was introduced to provide emergency health care for villagers and to fund transportation for medical services. In addition, one person in each village of Darjeeling is being trained to provide basic health care services to villagers and, if necessary, provide referrals to other health services. In another new CHAI initiative, Mercy Corps recently provided training to families in the village of Parmen to help increase their cows’ milk production and, as a result, household income.

The CHAI Project continues to yield positive results as Mercy Corps, Tazo and local tea workers work toward accomplishing the project’s critical goals: healthier people, better-informed citizens and empowered local communities.
About Starbucks Coffee Company
For more information about Starbucks social responsibility, please visit www.starbucks.com/csr. For additional information on Tazo Tea, its tea-purchasing practices and socially responsible initiatives, please visit www.tazo.com.

About Mercy Corps
Mercy Corps exists to alleviate suffering, poverty and oppression by helping people build secure, productive and just communities. The agency’s programs currently reach 7 million people in more than 35 countries. Since 1979, Mercy Corps has provided over $1 billion in assistance to people in 81 nations. Mercy Corps is a nonprofit organization with headquarters in Portland, Seattle, Cambridge, Washington, D.C., and Edinburgh, Scotland. Please visit www.mercycorps.org for more information.

About the Accompanying Photo
In March 2005, several Tazo and Starbucks representatives traveled to the Darjeeling region to see firsthand the positive impacts the CHAI Project has shown. In this photo, a local teacher educates young children about the importance of sanitation.

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Starbucks Participates in Clinton Global Initiative
Starbucks chief executive officer Jim Donald participated in the first-ever Clinton Global Initiative (CGI) last month. The nonpartisan conference in New York September 15-17, led by former United States President Bill Clinton, brought together political, business and thought leaders from around the world to tackle some of the world’s toughest issues. Among the attendees were current and former heads of state and business leaders including King Abdullah II of Jordan, Prime Minister Tony Blair of the U.K., U.N. Secretary General Kofi Annan, U.S. Secretary of State Dr. Condoleezza Rice and Jeffrey Immelt, CEO of General Electric. Participants took part in a series of dynamic workshops and discussions on a broad range of topics, including reducing poverty, resolving conflict and combating climate change. To learn more about the Clinton Global Initiative, please visit the CGI website.

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