Please write a passage about Starbucks Corp NASDAQ SBUXs main raw materialsmain components of COGS their price volatility and how their price influences SBUXs profitability Within1000 words

Starbucks Corp (NASDAQ: SBUX) is a multinational coffeehouse chain that operates in over 80 countries worldwide. The company is renowned for its premium coffee, tea, and other beverages, as well as a variety of snacks and pastries. However, behind the scenes, Starbucks is heavily dependent on a range of raw materials to produce its products. These raw materials, which include coffee beans, milk, sugar, and cocoa, are the main components of the company's cost of goods sold (COGS).

Coffee beans are the most critical raw material for Starbucks as they are the primary ingredient in most of the company's beverages. As such, the price of coffee beans is one of the most significant factors that influence Starbucks' profitability. The price of coffee beans is a volatile commodity that is subject to fluctuations based on factors such as weather patterns, crop yields, and global supply and demand trends. These fluctuations can have a significant impact on Starbucks' bottom line, as the company has to adjust its prices to reflect changes in the cost of coffee beans.

Milk is another crucial raw material for Starbucks as it is used in many of the company's beverages, such as lattes and cappuccinos. The price of milk is also subject to volatility, although it is generally less volatile than coffee beans. However, dairy prices can be influenced by factors such as weather patterns, feed costs, and the supply and demand dynamics of the dairy industry.

Sugar and cocoa are other essential raw materials that Starbucks uses in many of its beverages and snacks. The prices of these commodities are also subject to volatility, with fluctuations driven by factors such as weather patterns, supply and demand dynamics, and geopolitical events.

The price volatility of these raw materials can have a significant impact on Starbucks' profitability. When the cost of raw materials increases, Starbucks has to decide whether to pass the increased costs on to customers or absorb the costs itself. If Starbucks decides to raise prices, it risks losing customers who are unwilling to pay higher prices for their coffee. On the other hand, if the company absorbs the increased costs, it risks squeezing its profit margins.

To mitigate the risks associated with raw material price volatility, Starbucks employs various tactics. The company engages in hedging activities, such as forward contracts and options, to lock in prices and reduce exposure to price fluctuations. Starbucks also works closely with suppliers to ensure a stable supply of high-quality raw materials at competitive prices.

In conclusion, Starbucks Corp is heavily dependent on a range of raw materials to produce its products. The prices of these raw materials are subject to volatility, which can significantly impact the company's profitability. To mitigate these risks, Starbucks employs various tactics such as hedging activities and supplier management. By carefully managing its raw material costs, Starbucks can maintain its profitability and continue to provide high-quality coffee and other beverages to its customers worldwide.