Certification: Coffee needs to be served with credentials

21/11/2012 
  

 
Two words seen increasingly frequently on the labels of coffee products are “sustainably grown”. They reflect the demands of ethical consumers and the buying practices of large companies, which are keen to meet this demand with coffee that has “credentials”. But they also represent something else – a big opportunity for smallholder farmers.

Given the proliferation of coffee labelling, certifications, codes and corporate sustainability programmes, consumers could be forgiven for being confused. Different certifications come with different standards.

For example, Fairtrade-certified coffee guarantees farmers a minimum price for their products and connects them with importers, cutting out the middlemen. Farmers must follow social standards, such as promoting healthy working conditions and not using child labour. However, to become Fairtrade-certified, farmers must be part of a co-operative.

Under its certification, the Rainforest Alliance, a US-based non-governmental organisation (NGO), does not guarantee farmers a minimum price for their beans. Instead, the organisation helps farmers to introduce more efficient and sustainable farming practices that allow them to increase crop quality and give them more bargaining power with buyers looking for high-quality beans.

Unlike Fairtrade coffee, farmers do not have to be part of a co-operative to become certified by the Rainforest Alliance, which means that large brands such as Kraft and Nestlé can participate.

Meanwhile, 4C, otherwise known as the Common Code for the Coffee Community has members that include farmer groups, traders, roasters, retailers and NGOs. The organisation’s code of conduct helps growers, and in particular smallholder farmers, to adopt sustainability standards.

Solitaire Townsend, chief executive of Futerra, a sustainability communications agency, says that different labels and certification schemes are also important to coffee consumers, who have long paid attention to the quality of what they buy.

“Coffee is increasingly a way of life,” she says. “Obsession with source, smell, taste, size and foam says as much about you as what you wear or what you drive. Interest in sustainability is intrinsically linked to that obsession.”

In addition to their concern about the environmental footprint of their coffee, interest is growing among consumers in the farmers’ livelihoods.

“Consumers have long judged the quality of coffee on the quality of the supply, the quality of the bean,” says Ms Townsend. “It’s a small step from there to quality of life for farmers and communities.”

Even without consumers’ appetite for sustainably produced coffee, rising global demand is creating a growing market for the farmers. Coffee prices, while down from their peak in 2010, are still relatively high.

Added to this are commitments from the large global roasters to buy increasing amounts of ethically and sustainably grown coffee beans.

“You have companies working on sustainable and traceable sources of coffee, and big roasters, such as Kraft and Nestlé, looking for low-input, certified commodities,” says Mike Kubzansky, head of the inclusive markets initiative at Monitor Group, a strategy consultancy.

Kraft, for example, has said it will source 100 per cent of the coffee beans used in all its European coffee brands sustainably by 2015.

Nestlé, meanwhile, has announced plans to double the amount of Nescafé coffee bought directly from farmers and their associations between 2011 and 2015.

“The roasters have made massive commitments to sustainable sourcing,” says Mr Kubzansky. “Now they need to get the supply behind that.”

Doing so will not be easy. For low-income smallholders without access to credit, the challenge is that while livestock or crops such as maize provide a relatively quick return on investment, coffee bushes take several years to establish.

However, the good news for these farmers is that the realities of coffee cultivation – at high altitudes on rugged terrain and carried out by hand – mean they are not about to be replaced by industrial producers.

“It’s a very labour intensive and specified production landscape,” says Alex Morgan, senior manager of sustainable agriculture at the Rainforest Alliance, and a coffee expert. “So it’s not something that lends itself to large-scale production as a crop.”

Some multinationals are starting to work directly with smallholders to promote sustainable farming practices for this reason.

The trading houses and exporters that supply big roasters are also providing support for coffee farmers, establishing farmer groups and offering training in sustainable agricultural practices.

Meanwhile, some brands, including Nestlé and Kraft, have formed partnerships with organisations such as the Rainforest Alliance.

But whether driven by labels, certification or by the desire by companies to be seen as responsible producers, rising demand for sustainable and ethical coffee could benefit farmers in some of the world’s poor rural areas.

“We’re seeing more of the large roasters getting serious about sustainability,” says Mr Morgan. “And that drives positive change on the ground.”