100. New Sustainability Reports - Specialty and Total Market

100th post - woo hoo!                                                             15. January 2021

Over 80 data donors to the Transaction Guide

As a fitting 100th post on this blog, we are excited to share about the 2020 Specialty Coffee Transaction Guide , which was released two days ago, 13 January, 2021. You can click here to download the report. Artisan Coffee Imports is proud to be a data contributor this year. 

Download the Transaction Guide: www.transactionguide.coffee.  

Another useful coffee industry report, covering both specialty and commodity, is being released today: the 2020 Coffee Barometer. Download this report here: https://coffeebarometer.org/

"The coffee supply chain is closely tied to the top ten multinational roasters that represent over 35 percent of global trade in green coffee and engages millions of smallholders and workers." ~ 2020 Coffee Barometer

The two reports are synergistic, because the Coffee Barometer strongly urges more pre-competitive collaboration between importers and roasters on behalf of farmers. The "Transaction Guide" is a good example of what that kind of collaboration looks like. Indeed, on page 38, the Barometer discusses the value of Transaction Guide and its transparent price sharing as an alternative to pricing based on the C market. 

For the most part, the Specialty Coffee Transaction Guide, as it's name implies, focuses on the low-volume, but high dollars-per-pound part of the coffee world -- the high-quality specialty coffee market. Meanwhile the Barometer will teach you more about the largest roasters and importer multinationals and the high-volume, low-quality, low price-per-pound commercial grade coffee trade.

It was interesting to join a promotional webinar for the Coffee Barometer today. It was hosted by a media group in Amsterdam named CIRCL. Below are some highlights and a summary of a few of the comments from their high-powered panel of guests.

Moderator: Bahram Sadeghi, journalist

Speakers:

Sjoerd Panhuysen, Director of Research at Ethos Agriculture and editor of the Coffee Barometer. 

Kaitlin Cordes, Researcher at Columbia Center on Sustainability in New York City. She discussed the recommendations of the Jeffery Sachs report to the World Producers' Forum.

Vanusia Nogueira, Director, the Brazil Specialty Coffee Association (BSCA).

Mario Cerutti, Chief Sustainability Officer, Lavazza

Juan Antonio Rivas, Senior Vice President, Olam International.

I found Cordes' summary of the three recommendations of the Jeffrey Sachs report useful. They are:

1. Support each producing country to create a National Coffee Sustainability Plans, 

2. Create an international Coffee Fund of about 10 billion USD to support producer prices when they fall below a certain level.

3. Increase Domestic Consumption of coffee.

Key comments:

Less than $.005 additional price paid by consumers, for every cup of coffee sold, would make the 10 billion coffee fund possible. The criticism of this is that it is charity instead of fundamental structural change. The counter to that criticism is to think of it as the "user" side of the industry as shouldering some of the risk that currently is borne by farmers alone -- especially price and climate change risk.

A minimum farm size is needed in most countries. Diversification of income is a only a hedge and productivity improvement is only one step among many. 

According to Mario Cerutti, the "coffee crisis" is more than a crisis. It's not going away after a short time. He also commented that paying 10% of coffee exports per year into a coffee fund is not realistic. He says it will put roasters like Lavazza out of business.

21. Pre-departure for Rwanda -- the current situation

May 12, 2015

The countdown to my departure for Rwanda is at 4 days.  An article just appeared in yesterday's New Times (English newspaper of Rwanda) emphasizing the urgency of the supply chain problem. The headline reads:

"Huye coffee farmers decry low prices, inadequate washing stations"

quote from the article:

The farmers say besides the coffee fetching little [money], the washing stations in the area are overwhelmed by the large quantities of produce that need processing. “Most of the collection centres which used to buy our coffee from the farms have closed because the washing stations where they would take it for processing are overstretched,” said Janvier Mugambira, a coffee farmer from Isimbi Sector.

Washing stations say they are full in Rwanda.

Last year Rwandan farmers were receiving Rfr 220+ for 1 kg cherry. Today the price is at Rfr 170 -- a 23% decline and below the cost of production by most estimates.

This sounds to me like a situation where the value stream mapping I practiced at Definity University last month may help. If we can visualize where the waste is and quantify how big it is, then usually decision-makers get interested in spending some time to reduce it. I look forward to having that data and then doing some cause and effect analysis with key stakeholders. Where do they feel the main bottlenecks are?  Where should action should be prioritized? Would it make a difference if productivity at washing stations could be improved 10, 20 even 30%?

Stay tuned...

Here's the link to the full article:
http://www.newtimes.co.rw/section/article/2015-05-11/188662/

2. Resiliency - What is That?

Jan. 7, 2014
Resilience - this concept that is becoming a new anthem in economic development seems particularly relevant to specialty coffee. Within the world of coffee, it seems particularly relevant to coffee producers. It is the idea that life is full of surprises -- sometimes ones we can manage, but sometimes they can be devastating. (See the book by Walker & Salt, ResilienceThinking, 2006.)

Ben Corey-Moran, Director of Coffee Supply at Fair Trade USA, talks about the "Materia Gris," or "grey matter" that is the focus for COMSA, an innovative cooperative in western Honduras. His description of COMSA's values as an organization captures well what we mean by "resilience" and capacity building in coffee in this blog. (See the shortarticle in the on-line journal, Daily Coffee News, published by Roast magazine on Oct. 28, 2013). This was just before the start of "Let's Talk Roya" in El Salvador. COMSA is living relatively free of the devastating La Roya pest plaguing their neighbors and much of South and Central America. The coop's leadership attributes their situation to the cooperative's long-term focus (already in place for years, it seems) on "5 Ms": microorganismos (micro-organisms), materia organica (organic material), minerales (minerals), moleculas vivas (amino acids & proteins), and materia gris (grey matter—i.e., brains).

“The fifth M is the most important,” says Neri Gonzalez, COMSA’s chief agronomist. “It’s our creativity, ingenuity, and inventiveness that allows us to create and evolve these technologies to serve our needs.” COMSA is thus a great illustration of resilience in coffee. The coop seems to blatantly recognize that challenges, large and small, will never end in coffee farming.  So the best way to face them is with confidence in the producer's ability to adapt and innovate in sustainable ways, and with systematic processes to help the soil be as healthy as it can be. Combined, the coffee producer has resilience to withstand the onslaught of diseases and other stresses (often weather related).

1. The Concept of this Blog

Jan. 6, 2014
The Concept of This Blog
(Disclaimer - this is a blog for coffee industry people, probably not so much consumers.)

This week marks the beginning of a season called "Epiphany" in the Christian church. "Epiphany means "to show" or "to make known" or even "to reveal." Thus, it seems to be a fitting time to begin a blog about researching and measuring what works (and what doesn't) at origin. Research is a process of revealing and making known things that are there, but not well understood. Some say research is "uncovering truth." In this blog, the truth we will be after is, "what works at origin to build capacity among coffee producers?" and "what methods and processes can help us answer this question?"

"Resiliency" is in the title of the blog because that is my hypothesis about what works throughout the coffee value chain. Where producers have built up systems and infrastructure for producing quality that are resilient in volatile markets, I hypothesize that that is where we will see wholesome standards of living. Also, when roasters and importers take the long term view when investing in their supply chain, my hypothesis is that that is where we'll see processes and programs that make a supply chain resilient. More on resiliency in the next blog.

Supporting Producers: Maybe I'm wrong, (because I haven't measured it carefully), but I believe I have witnessed in these past five years a growing desire to support and assist producers in more constructive and efficient ways than we have seen in the past. This is sometimes expressed by coffee roasters when they figure out what they don't like about a current labeling system (e.g. Fair Trade) so they create their own system and they label it "Farm Friendly" or "Farm Direct". It is sometimes created by the undeniable stresses global warming puts on our planet, so coffee-growing estates seek out certifications like ISO 14000 in order to work more sustainably over the long term. I've seen coffee roasters turn away from a shot-gun approach to helping at origin, where they help a little bit on lots of different issues, but are not able to show much significant progress or develop transferable and synergistic know-how. So some of these companies have decided to focus on a single issue like water (Portland Roasting) or food security (Green Mountain Coffee Roasters).

Improving the Supply Chain: Other "players" in the coffee industry have worked to enhance the core of the industry itself and the way it works. We now hear rumblings that "the industry is broken" from the likes of Sarah Beaubien at Farmer Brothers/CBI and David Griswold at Sustainable Harvest. These companies therefore seek to fix their own supply chain at least, changing what doesn't work so well in the global coffee market at large. Paying more for coffee through direct buying relationships is a pretty common denominator between all "fix the supply chain" approaches (and a good place to start, I would agree).  After that, improving access to inputs such as credit, training and agricultural technology (fertilizer, eco-depulpers, etc.) are often the investments these companies make. A frequently used term for this is "capacity building."

Whether they have started their own label, or helped to fund teachers or books, or whether they've forged a new way of paying premiums for high quality lots of coffee -- coffee companies and their programs are now also attempting to measure impact and assess effectiveness in some credible way. Thus we see the corporate social responsibility reports multiplying and becoming more detailed and getting better with their message and their consistency of metrics. To name just two examples of individuals and their organizations, Kim Elena Ionescu at Counter Culture Coffee and Michael Sheridan at Catholic Relief Services are on the frontier of measuring impact at origin. Others are on the forefront, too, and you can read about them here.

This blog: This blog will provide a forum for discussing both the projects related to resilience capacity building and the systems used to measure and assess such programs. To us, program design and program evaluation are inseparable and connected in an on-going cycle. This blog will share about projects where Artisan gets involved in directly, as well as highlighting what we see others in the industry doing.Welcome aboard!