There can’t be many coffee shop owners in the UK who aren’t aware that the farmers who grow the coffee beans you buy don’t receive much for their work and their crop. Right now, the price of a pound of coffee is around 80p. It’s a slight increase on May’s price of 70p, which was the lowest price in more than a decade. At that price, farmers are breaking even. Not making anything to replace or update equipment, give and receive training, invest in new plants, raise their living standards…just covering their costs. Of the global annual coffee revenue of more than $200bn, the farmers – around 21 million of them – receive less than $2bn. Would switching to a direct trade coffee supplier put more of the money in growers’ pockets?
A lot of the problem is down to oversupply from Brazil, the world’s leading supplier of coffee. Yet, as African suppliers in particular have smaller yields and growers in other South American countries report food insecurity, there’s an imbalance which threatens consumer choice as well as livelihoods. Back in Brazil, coffee farmers have seen their incomes halve since 2016.
The ethical standard for a long time has been Fairtrade, which has done much to protect small-scale farmers. But the Fairtrade model means a fixed price for growers, irrespective of quality. There’s not the incentive to strive for a better product. Fairtrade certification costs the roaster, which puts an extra price pressure into the chain. Direct trade, on the other hand, delivers prices which adapt to the context of the grower and adds a premium for higher quality beans. There’s no certification cost to bear.
The UK now has a number of coffee suppliers operating on a direct trade basis. By sourcing their beans direct from farming communities and cutting out some of the supply chain costs, more of the price you pay for your coffee goes back into the hands and mouths of coffee growers and their families. This, in turn, means more investment in better products and more stable and healthier local communities.
We looked at the promises made by some of the best-known direct trade coffee suppliers in the UK. One pointed out that in 2018, their farmers made 48% more than the minimum Fairtrade price and 69% more than the world market price. That’s a massive boost. Another reveals that in its supply chain, farmers receive 77% of the amount the direct trade roaster charges, compared with just 26% in the traditional supply chain.
We all just want to keep a roof over our head, keep our family safe and happy, and plan for a comfortable future. Coffee growers are no different; it’s just that they’re doing the hardest work and at the sharp end of severe volatility. Making the switch to direct trade coffee would mean offering a premium coffee to your customers and making a real, tangible difference to coffee farmers around the world.