For Americans today, ethical consumption choices abound. Look around you in the supermarket and you will find products certified organic, fair trade, sustainable, made from recycled materials, and cruelty and hormone-free, to name but a few. Beyond the grocery store we are surrounded by hybrid and electric vehicles, sustainable wood products, and a multitude of “green” and carbon-neutral options. While the growth over the last decade of such products is encouraging, many consumers are skeptical that the reality behind the label matches the claims made. News stories about “green washing,” including the recent revelation that Wal-Mart had made it a practice of slapping organic labels on products that were not in fact organic, leave a bad taste in the mouth, and raise questions. What’s the difference between cage-free and free-range eggs? How much money does a fair trade coffee farmer make compared with others? In a society flooded by corporate generated proclamations of morality, who can we trust? In my first article in this series I presented some of the sociological and historical origins of coffee. In this second installment on the coffee industry, I take a look behind the label to examine the differences between popular certifications, and consider how much certification matters when seeking to choose a coffee one can feel good about.
A Peek Behind the Label
By Nicki Lisa Cole
AUGUST/SEPTEMBER 2010 CONDUCIVE
In response to coffee’s long history of exploiting labor and land, production and consumption of ethically produced and sourced coffee has grown tremendously over the last fifteen years. Today a diversity of certifications and claims of ethics decorate coffee packaging. The major players include Fair Trade, Organic, Rain Forest Alliance, Smithsonian Bird Friendly, UTZ certified, and 4C Association. Beyond certification, many roasters employ an uncertified, company specific ethical sourcing model, like Starbucks Coffee Company, the Coffee Bean and Tea Leaf, and many smaller roasters too. Each ethical model addresses some combination of social, environmental, and health concerns related to coffee cultivation, and offer transparency along the commodity chain from farm to cup, though no two models are the same. So what’s the difference between them? Let’s take a look, starting with a review of the policies of the most well known certification systems.
In 2009 nearly 110 million pounds of certified Fair Trade coffee were imported into the U.S. This coffee is certified as fairly traded by TransFair USA, and regulated at the source by Fair Trade Labeling Organizations International. According to TransFair USA, Fair Trade seeks to “enable[s] sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, consumers, industry and the earth,” through the certification and promotion of Fair Trade products. This “more equitable” model features a price floor that globally averaged $1.69 per pound (compared to last year’s average commodities market price of $1.15 per pound), a shorter commodity chain that eliminates middle men who squeeze profits, buyer investments in community development, and up to sixty percent of the total price of harvest paid in advance. This model works exclusively with democratic cooperatives of small farmers that are inspected annually by organization representatives. It encourages environmental stewardship with an overall goal of environmental and economic sustainability of the coffee supply chain. Because the price of coffee as determined by the commodities market in New York City (C market) fluctuates and sometimes tops the Fair Trade minimum price, the model stipulates that cooperatives will be paid the higher price per pound. In addition, buyers pay a social premium of 10 cents per pound, and if the beans are also certified organic (nearly half of Fair Trade coffee imported into the U.S. is), they pay a 20 cents per pound total premium. Producers pay annual fees that cover the cost of audits and inspections.
In 2009 over 93 million pounds of organic coffee were imported into the U.S. and Canada, and much of this was also certified Fair Trade. While Fair Trade focuses on the social and business aspects of a sustainable supply chain, organic certification focuses specifically on the ecological and environmental aspects of sustainability. Its mission is to produce a sustainable system of production that ensures biodiversity and soil health, and stipulates that all aspects of processing and roasting meet organic standards set by the USDA. Unlike Fair Trade, there is no price floor with organic certification, however the average premium paid to farmers is about 25 cents per pound over the average C market price. Again, producers pay annual fees to the organization.
According to Rainforest Alliance (RFA), coffee certified by them now accounts for about 1.5 percent of coffee sold on the international export market. RFA certified coffee blends the social concerns of Fair Trade with the environmental concerns of organic certification to promote holistic sustainable farm management among farms and cooperatives of all sizes. The mission of RFA is to ensure biodiversity, foster community development, protect workers’ rights and productive agricultural practices, and promote sustainable farm management by focusing on shade coffee (coffee grown under a canopy of larger trees which provide shade and allow for a thriving ecosystem). Local NGOs who are trained by RFA provide technical assistance and capacity building to farmers. There is no set price premium paid to farmers as the price is negotiated between the buyer and the seller; the logic is that farmers earn more through gains in efficiency and heightened quality. Farmers pay the cost of auditing and an annual fee based on the size of their farm, however group certification allows smaller farmers to participate in the system. RFA points out that producer fees are often paid by the buyers, though this is not a stipulation.
In 2008, 200,400 pounds of Smithsonian Bird Friendly coffee were roasted and sold in the U.S. This certification focuses specifically on the biodiversity of migratory bird populations in producing regions by requiring coffee to be grown under a canopy of indigenous trees that provide shade. Given the emphasis on ecological outcomes, organic certification is a prerequisite for Bird Friendly certification. Inspection of farms is thus linked with organic inspection, and farmers earn a price premium of 5-10 cents more per pound over the organic price. Beyond what producers pay for organic certification, they face the added cost of days devoted to inspection, and pay a small fee for the certification.
UTZ Certified is very similar to the Fair Trade model, however its origins include the input of producers in Guatemala. In 2008 77,500 metric tons of coffee were certified by this model. The mission of the program is to achieve sustainable agricultural supply chains with responsibility shared by producers, industry, and consumers. The program focuses on economic performance through productivity and farm professionalism, promotes environmental standards to preserve biodiversity, and emphasizes worker health and safety. Growers who are a part of the Coffee Support Network receive technical assistance at a low cost. While there is a price premium paid to farmers, it is not set and is determined by the market. In 2008 the premium averaged 7 cents per pound of beans. Producers pay auditing fees.
The mission of 4C Association is to enhance economic, social, and environmental production, processing and trading conditions for all who work in the industry. According to a press release dated May 2010, in 2009 nearly half a million bags of 4C certified green coffee were purchased by roasters. This model was launched in 2003 as a partnership between the coffee industry and German NGOs to define a mainstream code of conduct for sustainability that would apply globally to farms of all sizes. The goal of the program is to prohibit worst practices while promoting best practices, and ultimately to increase sustainability of production and processing. Farmers are provided with workshops and instruction on technical assistance and capacity building, and are given access to tools and manuals that facilitate farm projects. There is no set price premium paid to farmers, as the price is negotiated between 4C members, and prices ultimately reflect coffee quality and sustainable production practices. While producers pay a fee to join, their fee is the smallest of all members, while roasters’ fees are the highest.
Critiques
While certification schemes such as these offer external assurance that the rules of production and trade are abided, there are some drawbacks to these models. Overhead costs associated with running a cooperative with funding certification programs diminish the amount of premiums that make their way to farmers. Though TransFair USA states that the prices paid are traceable to producers, they are actually only traceable to the cooperative level, and thus what individual producers take home remains unknown. In his book Brewing Justice: Fair Trade Coffee, Sustainability and Survival published in 2007, Daniel Jaffee found by studying coffee farming communities that the amount of Fair Trade premium that trickles down to individual farmers is marginal, and results in little difference in farmer quality of life.
Some critics within the specialty coffee industry point out that organizational fees to producers and the costs associated with converting to organic production can prohibit inclusion. Others note that organic standards for approaching biodiversity and environmental sustainability come from a Western perspective and often dismiss valuable indigenous knowledge and practices that may be equally (or more) effective than imposed standards. Many in the specialty coffee industry feel that while such models were a good start over a decade ago, they fail to do enough to improve the quality of coffee and change the impoverished situation of farmers. (These critiques are pulled from dissertation research interviews the author conducted with buyers and consultants in the specialty coffee industry during 2008 and 2009).
Direct Trade
It is for this reason that roasters in the specialty coffee industry have created a different model — Direct Trade. Stumptown Coffee based in Portland, Oregon, Intelligentsia of Chicago, and Counter Culture Coffee in Durham, North Carolina are the pioneers of this model. These companies send their own buyers to origin to seek out farms, build long term relationships of mutual respect and trust with farmers, work to help farmers improve coffee quality, and invest in farm infrastructure that fosters long term sustainability. Many farmers around the world never roast and consume their coffee, and most have no knowledge of what happens to their beans once they leave the farm. By teaching farmers about roasting, brewing, and cupping their coffee (tasting coffee for flavor and quality), direct traders give farmers the necessary knowledge to take control of coffee quality and price. These models reward improved quality with higher prices, and often pay more than six to seven times the Fair Trade minimum price.
While direct trade models do not provide external certification, they do keep their books open to public review in order to offer a transparent commodity chain. Consumers however must remain critical when considering company specific models. Starbucks Coffee Company’s C.A.F.E. Practices is an internally developed and externally regulated sourcing model about which Starbucks makes bold claims regarding sustainability and ethics, yet offers no transparency as far as price paid per pound of coffee.
Advice
For those who seek an informed recommendation on their purchases, you can find the three direct traders listed above across the country. While Stumptown Coffee is based in Portland, they also have locations in New York and Washington state, and Intelligentsia has coffeehouses not only in Chicago but also in New York and several in the greater Los Angeles area. All three (including Counter Culture) sell whole bean coffee through their websites.
A great nationwide resource for coffee you can trust is Whole Foods. Their coffee brand, Allegro, is sourced by an importer called Sustainable Harvest based in Portland, Oregon. The coffee they purchase is acquired similarly to the direct trade model, emphasizing long-term relationships with farmers. Additionally, the people who work at Sustainable Harvest help farmers and their communities acquire grants to build infrastructure and improve their quality of life.
Those who are motivated and adventurous might try roasting their own coffee. Green (unroasted) beans can be purchased online from Oakland-based Sweet Maria’s (they also sell affordable home roasting equipment). They buy their coffee directly from farmers through their Farm Gate program, which is similar to the direct trade programs described above.
When it comes down to it, the best thing you can do to inform your choice in coffee is to ask how beans are sourced at your local coffeehouse, or follow up on an in-store purchase by visiting the website of the company that roasts your beans. When little information is available or the pricing is not transparent, your safest assumption is that the beans are not ethically sourced. But, even when information is available, it is important to read it with a shrewd eye for lip-service versus traceable evidence. In the fight for justice for farmers and the preservation of our planet, the best weapon is your own critical inquiry.
Author Biography:
Nicki Lisa Cole is a sociologist at the University of California, Santa Barbara. She earned a Master of Arts from UCSB in 2006, and a Bachelor of Arts from Pomona College in 2002. Her dissertation research examines the growing practice of ethical consumption in the United States. Nicki’s research focuses on the coffee industry, its ethical sourcing models, and how such coffee is marketed. She interviews consumers and people who work in the industry in order to understand the identities, values, and practices that surround ethical consumption today. Nicki is committed to fighting for social justice through researching social problems, and by writing and teaching about them. She believes fiercely in the motto of New Hampshire, her home state: Live free or die.
Website: http://www.uweb.ucsb.edu/~nickilcole/
Email: nickilcole@umail.ucsb.edu
Given all the comparative expenditures people make on cars and consumer electronics, I only wish we were as thorough about the implications of these purchasing decisions as we are about obsessing over coffee.
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Great point Dave. One encouraging trend I’ve found in my interviews of ethical coffee consumers is that these folks tend to have a more thoughtful or critical approach to consumption overall, though certainly no one is perfect. It’s frustrating how easy it is for Americans to be thoughtless consumers.
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Very well written article on this topic. We are big proponents of the direct trade model as we believe that this offers great benefit to our growers. There are a growing number of roasters that feel much the same way. Although fair trade organizations like FLO set the baseline in trade practices in support of farmers, there is so much more we can do as roasters to support the industry. Our Fair to Farmer Direct program is our on-going commitment to providing better support through a direct trade model and we will continue to grow it over the years. Appreciate the clarity you offer in this article that outlines the challenges we face as roasters, how we work to improve trade practice and support and how we communicate this to consumers in the least cluttering manner.
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Charles, I’m happy that you liked the article. What roaster do you represent?
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“These companies send their own buyers to origin to seek out farms, build long term relationships of mutual respect and trust with farmers, work to help farmers improve coffee quality, and invest in farm infrastructure that fosters long term sustainability.”
Making this statement in the context of describing the Direct Trade model suggests that companies who use other certification schemes don’t likewise travel to origin and build relationships, which is far from the truth.
“Today a diversity of certifications and claims of ethics decorate coffee packaging.”
Interesting that you choose to critique all of the certification models except the one you are advocating. While being notable and noble in their efforts at helping improve the livelihood of a small group of coffee producers globally, these three roasters have about the same global impact as giving a dollar, or for the sake of argument five, to the homeless panhandler on the corner.
Your closing paragraph does advocate for the consumer to make a stand, ask the tough questions and demand more from their retailer of choice, regardless of scheme. However, the whole doesn’t come off as an objective presentation of choices, but rather fanboyism, when read by those who are aware of the differences in the certification schemes.
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Brian, thanks for your feedback. Certainly we can make critiques of any sourcing model, since all roasters are ultimately looking out for their own bottom line, ethical concerns aside, and are primarily invested in preserving the coffee supply chain. The point of this article was not to offer an objective presentation of choices, but to point out that some choices benefit farmers more than others. This critique and recommendation is based on four years of intensive research of the ethical/socially responsible coffee market. While you are correct that the three direct trade roasters I mention collectively constitute a marginal percentage of coffee imported into the US, I am encouraged by what they are doing because their practices lead to real change and improvements for farming communities without directing money into an external certification system that creates additional overhead costs. There are many roasters out there working with a similar model. While the fixed Fair Trade minimum price is better for farmers than dealing with manipulative coyotes & the fluctuating C market price, it does not do enough to make up for the 500 years of undervalued and exploited labor that marks coffee production.
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“You cannot inspect quality into the product; it is already there.”
-W. Edwards Deming, founder of modern quality control
Thanks for the useful summary of competing certifications and approaches. What is missing here, and in just about all other coverage of this topic, is any discussion of what specialty coffee is all about, namely utterly delicious, distinctive flavor. It’s supposed to be a beverage of pleasure, not penance, and marketing strategies based on the latter, for what is after all a nutritionally-unnecessary stimulant, aren’t broadly sustainable.
Coffees that have unique and delicious inherent flavors command high prices based on their merits: think Yemen Mocha, Ethiopian Harrar and Yergacheffe, Kenya auction lots, earthy-smooth Sumatras, the famous jasmine-scented Panama La Esmeralda.
The rest of these marketing schemes, direct trade excepted, boil down to charity that flies in the face of market realities. If what roasters and consumers are looking for is sound but unremarkable coffee that can be successfully medium-to-dark roasted and buried in frothed milk any number of coffees will do, and Brazil, to take an important example, can produce such coffees in a savannah environment far more profitably than any washed coffee producer hand picking beans from low yielding varieties in the highlands of Central America.
Outside of Ethiopia and Yemen coffee is a very recent import (200 years or less on average) that’s purely a product of imperialism. It has nothing to do with the cultures on which it was imposed – which is why there is no culture of coffee appreciation among farmers outside of Ethiopia. This is not to ignore or make light of the suffering of poor farmers anywhere, but far too many well-meaning people act as though coffee is native to these lands and that there’s some sort of inherent right for farmers to make a living growing it, when in fact a lot of them would be far better off growing food for themselves or other crops for export.
In my opinion there is a tiny market for really great-tasting coffee that will always command a premium far in excess of “fair trade” prices, and a very large market for good-enough coffee whose spoils will go to the most efficient producers. The leading edge roasters like Stumptown, Counter Culture and Intelligentsia are doing all they can to increase the consumer base that will understand and support the truly great coffees, which is what true specialty roasters ought to be doing. As for creating a floor to complement that ceiling, that’s something that can only be done looking at coffee as a part of agriculture generally rather than singling it out for special attention. How about pushing for a ban on the importation of any product made by people making less than U.S. minimum wage? A farfetched idea to be sure, but it makes a lot more sense than marketing strategies based on guilting people into buying crappy coffee.
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I praise the marketers of Fair Trade and Direct Trade coffees. They are helping to educate the end-consumer while promoting the story of specialty coffee and the people who produce it.
But let’s look at the big picture.
Say I purchase a $2 cup of Fair Trade Certified coffee at my local café. How much is the farmer actually paid? Maybe 10 cents. That’s only 5% of the retail price. Direct Trade is slightly better. The farmer is paid about 6% of the retail price.
And, as the article points out, it doesn’t give the consumer a real connection with anyone other than the roaster, and the relationship between consumer and producer isn’t direct or transparent.
What’s my alternative? Support farmer-owned brands. When the farmer grows, roasts and markets her own coffee, she earns much more and she is helping herself by reducing her dependence on importers, certifiers and roasters.
There are many successful farmer-owned brands on the market today, like Organic Valley, Divine Chocolate, Cabot Creamery, Ocean Spray, Florida Growers, Blue Diamond Almonds and Pachamama Coffee. For consumers who want the most direct relationship with farmers, Farmer Owned is the right choice. And a few of the above models prove that it can scale up.
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Farmer-owned brands make sense with many products, but coffee isn’t one of them.
As I mentioned earlier, coffee is the antithesis of a product like wine or fruit where the person who grows the product knows everything important there is to know about it. Coffee is a cash crop grown by farmers who in most cases have never tasted and will never taste their own “export quality” coffee, and who have no idea what impact their growing practices have on its cup quality or commercial value.
High-quality coffee is also extremely perishable once roasted (and even in green form). Bottom line: the selection has to be done by roasters who employ expert tasters and the roasting done as close to the point and time of sale as possible. Farmer empowerment sounds great until you understand that coffee is a colonial crop imposed on the cultures that grow it (Ethiopian and Yemen excepted).
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I would like to have him here full time but I heard it is hard to get someone in the US from India. Anyone know something about this? He does amazing work and I want to hire him..
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Lottie, to whom does your question refer?
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[...] the Fair Trade market there are many different kinds of certification that are likely to confuse customers and jeopardise the consistency of the whole labelling system. [...]
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