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Sustainable Values Combined with Market Tools: A Future for Specialty Coffee

by Chad Trewick of the SCAA Board and INTL FCStone

coffee value commodity

Photo by Travis Modisette SCAA

Today, more than ever, with the increasing volatility of the coffee market and our growing understanding of the challenges faced by our partners at origin, we must seek the next level of mutually beneficial commercial relationships as we buy our green coffee.

Too often, because of limited understanding of how we can more positively contribute at origin, our sourcing behaviors result in the need for corporately driven charities and organizations. These efforts are designed to help address the hardships we know of in coffee producing communities at the beginning of our supply chain. More than 20 years of experience in our industry working to understand a wide range of stakeholders — from farm to boardroom — leads me to believe this stems from relatively little understanding of the true economics of coffee production. And, because that information is difficult to ascertain and study through validated and trusted means, it is easier and more practical for coffee companies to create and support charities, programs, and projects than it is to understand the economics of their raw material. Even though we may be beginning to understand the unsustainability of supporting a cycle of poverty and charity dependence in our value chain, we lack critical information today, making it seem impossible to pay a price based on production economics that would ensure an ongoing supply of green coffee and support the livelihoods at the start of our supply chain.

Simply put, we want the businesses that support the livelihoods of the people who produce coffee to thrive. Yet most coffee companies themselves are neither prepared nor responsive enough to efficiently accommodate revised costs for raw materials without causing irreparable damage to themselves, or even jeopardizing the livelihoods they hope to support. This creates the impression that many coffee companies are unable or unwilling to understand the true economics of the production of the raw material they require. And without accurate information on which to base important business-guiding decisions, the industry’s purchasing behaviors have struggled to evolve....Read more

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