Thinking About Fair Trade, Certifications and Green Coffee Buying August 27 2013
Not too long ago, a young couple came into Spro and asked me if we had "Fair Trade" coffee for sale. Like always, I informed them that we don't subscribe to these certification coffees and that we buy our coffees based on their individual qualities. They then told me that they would prefer to buy "Fair Trade" coffee and declined to try any of our coffees. Usually when I speak to someone about our buying practices based on quality instead of certification that's enough for them to at least give our coffees a try, but not this time. I was perplexed and decided to engage them further.
In the coffee industry, there are many ways of purchasing coffee. Most coffee roasters simply go to any one of many coffee importers, look at their offering list and buy coffee based on a variety of needs, including price, availability, country of origin, certification and maybe even quality. At Spro, we base our purchasing on quality and sometimes on the uniqueness of a particular coffee. We buy the coffees that we really love and hope that all of you enjoy the coffee as much as we do. We don't pay attention to certifications but we also don't discount them. If a certified coffee gets us excited then we would like to buy that coffee as well.
One thing that I've learned over the years is that certification is not necessarily an indication of quality. Mainly it means that the producer (and subsequently the roaster and retailer) has met the certifiers criteria and paid their licensing fees, resulting in a "certified" coffee.
Most of the time, people who buy a certified coffee are doing so because they feel there is some level of social benefit that is derived from that purchase. Usually this means that there is a feeling of "helping" the farmer with beneficial prices that will go towards (presumably) helping the campesino farmer and his family out of perceived poverty. To my mind, there's nothing wrong with this and we should be doing what we can to help the impoverished farmer improve their living conditions and, possibly, help that farmer improve the outlook for his children. It's part of how we purchase coffee.
As I am writing this, the current C-Market (commodities market) price for coffee is $1.13 per pound. This is down from a high of $1.31/lb. in June and a 13 year high of $1.90/lb in September 2010. This then prompted Fairtrade International to raise the Fair Trade minimum price for coffee to $1.40/lb in April 2011.
To compare, our cost for the most accessible coffee on our menu, the YirgZ G1 Ethiopia is $3.65/lb. which is a $2.25/lb. and $2.52/lb. premium over the current Fair Trade and C-Market prices (respectively). In other words, we're paying more than twice the Fair Trade price for our most affordable coffee. As I said, we don't discount certifications and will buy them when the quality meets our standards, meaning that the only FTO (Fair Trade Organic) Certified coffee in our offerings cost us $4.47/lb. (Finca Cual Bicicleta BioLatina Marcala Honduras) - a premium three times over the Fair Trade price.
But what does all of this mean? Hopefully it means that we're doing a little bit to help improve the lives of the farmers from whom we purchase coffee.
I'm not one terribly interested in bashing on certifications, there are plenty of others who do a perfectly good job of that. My first question regarding certifications came about during my very first trip to the annual Specialty Coffee Association of America (SCAA) trade show and exhibition in Boston 2003. The Event is the annual gathering of the specialty coffee industry from around the world. It is the event to attend and at my very first one I was struck in awe at the sheer size of the Fair Trade booth - a 100' x 50' monstrosity that must have easily cost over $100,000 to stage. Not only was the sheer size staggering, as well as the number of FT representatives but also the number of farmers they had flown in from all over the world as a demonstration of their good deeds. It made me wonder how much of the coffee price really reaches the lowly campesino as opposed to the international marketing behemoth. It was my first disconnect from the world of certified coffees.
Partially because of this, as well as the influence of industry friends such as Duane Sorensen (founder of Stumptown Coffee), Doug Zell and Geoff Watts (founder and green coffee buyer, respectively, of Intelligentsia Coffee & Tea), our inadvertent "direct trade" purchasing of coffee from Gus Brocksen (Kona's Pele Plantations) and my own mentor, John Sanders (Hines Public Market Coffee) that helped shaped how we would eventually buy green coffee based on quality with an outlook towards nurturing relationships with our producers. To be honest, partially because we are still a very small coffee company, we're not quite where I would like us to be, but we're taking steps every day towards that goal.
But back to that young couple visiting Spro not too long ago. I ended up challenging their assertions about certified coffee. Did they know that the price of Fair Trade hadn't changed in nearly twenty years? That it's a marketing machine that requires any grower, cooperative or coffee company desiring to label their coffee "Fair Trade Certified" to pay a licensing fee? Truth be told, I might have been a little overzealous in our discussion about certifications (catch me at the right moment and I can be like that), but it quickly became apparent that their position rested on uninformed assumptions - that our coffee wasn't worth investigating because it wasn't "certified" and that our coffee must not be doing anything to help the farmer. All of which couldn't be farther from the truth.
As anyone who chooses to involve themselves with local produce, farmers markets, the farm-to-table movement or CSAs knows: quality costs money. Our prices are reflective of our costs and the prices we pay for our coffee are reflective of the costs borne by the farmer. We're not simply buying average grade "spot" coffee (spot meaning those coffees in inventory at the local coffee warehouse) and artificially inflating the price. As a close friend and coffee producer in Nicaragua once told me: if the price of coffee goes up to $2.00/lb. - that's a "game changer" for the average coffee farmer. We pay the premium for high-grade specialty coffee partially because we think the coffee is fantastic and because we hope that it will help the farmer improve whatever situation they might be facing.
Last weekend, I had a very interesting conversation with another industry friend, Mark Inman with Olam Specialty Coffee in Healdsburg, California. Mark is a long-time advocate of local farming and helping coffee producers worldwide and over the next year or so, we're going to start exploring the possibilities of working with small-plot farmers for our green coffee buying.
Currently, a portion of our coffee catalog comes from larger producers - farmers producing multiple containers of coffee per year. A container holds about 40,000 pounds of coffee - which is dramatically more coffee than we roast in one year (we haven't roasted even half that amount in the seven years Spro has existed). And while producers such as the brother and sister wonderkids Maria and Alfredo Pacas (La Esperanza Carmen #52) are extremely supportive and excited that we represent their coffee, we understand that larger operations such as theirs want to sell larger quantities than the five bags per year (one bag is about 120 pounds) we currently purchase from them.
With this in mind, and with the help of Mark, we're going to be looking for those farms whose yearly production is in the five bags (and under) category. The hope is that we can find these small-plot farmers who are able to produce a high-grade specialty coffee, purchase their entire production and begin to work with them year after year to collectively develop increased quality coffees that is mutually beneficial. It doesn't mean that we will end relationships with our current producers but rather change our focus to farms whose production matches more closely with our own consumption.
I'll update more on this as things progress over the next coming year.