Dive Brief:
- Starbucks plans to increase its annual spend with diverse suppliers to $1.5 billion by 2030, almost double the roughly $800 million the company spent with diverse suppliers in FY 2021, according to a blog on the company's website.
- As part of the effort, Starbucks will work to improve representation in its paid media portfolio, committing to allocate 15% of its ad budget to minority-owned and targeted media companies in the next year. The chain will also partner with other organizations to develop and grow supplier diversity throughout its global system as part of its Supplier Diversity and Inclusion program.
- Yum Brands' outlined plans to increase diversity among suppliers, executives and francisees in July. McDonald's announced similar commitments in the same month, aiming to allocate 25% of its supply chain spend toward diverse businesses by 2025, or about $3.5 billion.
Dive Insight:
The evolution of Starbucks' DEI commitments to now include supply chain commitments may refelect the current supply chain shortages hindering the global restaurant industry. Starbucks specifically has faced shortages of cups, coffee syrups, cake pops and more.
Starbucks claims increased spending on the Supplier Diversity and Inclusion program will help alleviate some supply chain pressures. The program may also provide a boost for smaller companies. Starbucks says its Supplier Diversity and Inclusion program now includes suppliers of all sizes and categories and supports more than 6,400 jobs, contributing to $1.2 billion in economic impact.
Starbucks will track its Supplier Diversity and Inclusion progress by sharing annual updates. The company will also help reach and onboard smaller, diverse-owned businesses by launching a free, open-source toolkit in partnership with Arizona State University.
McDonald's recent diversity commitment seems to go a step further, pledging to deploy annual equity and inclusion training not just within its company, but also at more than 20 of its largest suppliers.
Such initiatives seem to be proliferating throughout the industry. Earlier this month, major distribution company Sysco added five new partnerships to enhance its supplier diversity initiatives, for instance.
These efforts signal that major restaurant companies are encouraging and may expect buy-in from their partners for their diversity efforts. This trend could affect other industries given the scale of the commitments from McDonald's, Yum Brands, Starbucks and others. According to Reuters, in internal memo from July, McDonald's acknowledged its size and scale is an "asset in driving societal change and bringing others along."
