Friday, April 3, 2015

15. Sustainability Panel Lectures at SCAA Seattle - Apr. 9 - 12, 2015

Friday, April 3, 2015

Join the great gathering of passionate, innovative, game-changer coffee people in Seattle next week - April 9-12!  If you will be there, too, I hope we cross paths. Here are a few things to look for:
Learn new stuff!  

Attend one of the two panel lectures I am moderating:
Cost to Produce vs. Price: Producers Narrow Margins
Saturday, Apr. 11, 9:00 - 10:15am
The Conference Center (adjacent to the expo hall bldg.) - Room 304
  • Presenter 1: Mark Lundy, International Center for Tropical Agriculture, CIAT
  • Presenter 2: Saurin Nanavati, COSA (Committee on Sustainability Assessment)
  • Presenter 3: Ben Carlson, Long Miles Coffee
  • Moderator: Ruth Ann Church, Artisan Coffee Imports
Economics of Quality & Price: Insights From CoE Auction Data
Saturday, Apr. 11, 10:30 - 11:45am
The Conference Center (adjacent to the expo hall bldg.) - Room 202
  • Presenter 1: Norbert Wilson, Auburn University
  • Presenter 2: Adam Wilson, Thrive Supply
  • Moderator: Ruth Ann Church, Artisan Coffee Imports
Look for the early release of Roast Magazine -- May/June edition
Pg. 25, you'll find an article I wrote: "A New Focus on Farm-Level Economics" which reviews Rwanda and Burundi and research related to potato taste defect in those countries.

Tuesday, December 30, 2014

14. Sustainable Connections - MSU and COSA



December 30, 2014
 As this year winds down, I'm optimistic about the increasing recognition non-profits in the coffee sector are giving to academic institutions. In particular, I've learned over the past 12 months of the collaborations -- past and potentially in the future -- between Michigan State University (MSU) and the Committee on Sustainability Assessment (COSA).

In early 2014 when COSA released its "Measuring Sustainability Report" I noticed MSU's Dr. Larry Busch is on the scientific advisory committee. Dr. Bush is MSU's Distinguished Professor Sociology and Director, Institute for Food and Agricultural Standards. He is well-traveled and has researched standards in many different food supply chains. In a conversation I had with Dr. Busch in June this year, he praised COSA for their boldness in accomplishing 20,000 farmer surveys since the start of their assessment program -- truly an unprecedented number for a single survey and these were done across 16 countries.
Michigan State University Website Home page - opens in new window
COSA builds its work on the same basics of scientific research that are the hallmark of MSU's research groups. MSU has been conducting impact assessments in remote rural areas on the African continent for decades. Researchers such as Dr. Dan Clay (Department of Community Sustainability) bring their high-level knowledge of survey design to cash-crop value chain work, including coffee, as evidenced by projects like USAID's PEARL project in Rwanda (2002-2007) and BAP in Burundi (2008 - 2013). Others, like Dr. Mywish Maredia (International Development Agricultural, Food, and Resource Economics) have recently designed randomized control studies to assess impacts of programs in Rwanda, Lesotho and Burkino Faso. Dr. Murari Suvedi (Department of Community Sustainability) is another senior researcher who is especially well-known in Asia (Cambodia, Japan, Nepal, to name a few) for his expertise in impact evaluation.

Like COSA, Michigan State University is known for its ability to implement scientific rigor pragmatically, especially for business. Its MBA program at the Broad School of Business has been ranked #2 (after MIT) by U.S. News and World Report for Supply Chain studies. MBAs at MSU can take courses in "Sustainable Supply Chains" and "Measuring Socio-Economic Well-being."

In a year-end greeting, COSA's Danielle Giovanucci writes with optimism about "our culture of collaboration bridging diverse points of view to ignite dialogue and cooperation to address [the complex challenges of agricultural sustainability]." Given COSA's proven record for collaboration and MSU's depth of expertise in assessment, sustainability and smallholder agriculture in developing countries -- one can certainly see this partnership growing in 2015!




Thursday, July 17, 2014

13. Sustainability with a Market Focus = Resiliency

July 17, 2014

Chad Trewick is a coffee industry veteran, who among his many experiences, can also say he helped one of the U.S.'s largest retail coffee chains commit to sourcing 100% certified coffee. Chad helped Caribou Coffee (now owned by Peet's) to convert to sourcing 100% of their coffee from sustainability label, Rainforest Alliance.

In a thoughtful article, Trewick recently wrote in detail about the need for the coffee industry to embrace more sophistication in terms of understanding production costs and utilizing finance tools like hedging. Here's the link:
http://dailycoffeenews.com/2014/05/23/sustainable-values-combined-with-market-tools-a-future-for-specialty-coffee/

For me, Trewick's comments reflect the 'coming of age' of many people in specialty coffee. There have always been those in the coffee industry who understand the importance of production economics and financial trading tools like hedging. Nestle, P&G and Kraft no doubt have decades of data and experience in these areas. But these companies are considered the 'old boys' and specialty coffee, as it came on the scene in the 1990s, has a lot of individuals who think of themselves as trading coffee in a new and different way..

I think part of what Chad is saying is, while specialty coffee can be different (for example, 100% certified Rainforest Alliance), certain market fundamentals are still the same.

Here are some of the quotes from Chad's piece that I appreciate the most:

[We have] relatively little understanding of the true economics of coffee production...we lack critical information, 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.

...without accurate information on which to base important business-guiding decisions, the industry’s purchasing behaviors have struggled to evolve.

So, what do we do? We need to pursue two simultaneous strategies.
1. Prioritize the gathering of information about coffee production economics. We need a meaningful and validated study of the economics of coffee production coming from various key origins and, further, the regions within those origins. [Certainly Trewick means to say "studies" not "study", as one study cannot suffice.]

2. Use financial hedging tools to help manage the increasing volatility of the green coffee market.
And... use what tools we can (including financial literacy training for farmers) to create more economic resilience.

The angle Chad takes on all this praise for the value of economic research and financial managment tools is that these approaches will be more long-lasting, more enduring, more sustainable, than charity. Trewick's words again: "there is much more we can do to improve the economic resilience of our entire value chain by using the tools the market has to offer."

"Here, here!" say I, and I believe, many coffee farmers throughout the world would agree.

Monday, June 23, 2014

12. $23 million Coffee Farmer Resilience Initiative

June 21, 2014
Coffee leaf rust is a one of the coffee industry's best examples of the need for building resilience. It is the result of 'traditional' pests and problems, made worse by climate change. There is hope for a bright side to this problem which is threatening the survival of 400,000 smallholder coffee farmers in Mexico, Central and South America. Maybe with the attention this 'natural disaster' is bringing, some of the long-standing, intractable problems like food security, income diversification and insufficient research on coffee plant pathology will be addressed, along with addressing the acute pain of the current situation.

News about the $23 million Coffee Farmer Resilience Initiatve is one reason to have this hope. Watch this video to hear Rajiv Shah, head of USAID, discuss the initiative:
https://www.youtube.com/watch?utm_content=6215193&utm_medium=social&utm_source=linkedin&v=sEJ1rC72FOs

And to learn even more, I refer you to Root Capital's blog of May 28, 2014:  Click here.

Nicolas Pineda, Honduras
Photo credit: Root Capital

Thursday, April 3, 2014

11. Barack Back in Town

April 3, 2014 - Ann Arbor, Michigan
Source: MLive Michigan - Jessica Webster
Barack was back in my home town of Ann Arbor yesterday (April 2nd). I think he felt obligated because on his last trip to Michigan in February, he was only able to go to East Lansing and visit Michigan State University's campus. That trip was to make an announcement about the breakthrough legislation on the Farm Bill which Michigan's senator Debbie Stabenow masterfully guided through to approval. A win for farmers!
Source: MLive Michigan - Jessica Webster

Barack's trip yesterday was to highlight the need to raise the minimum wage in the USA. Why Ann Arbor? One is the fact we're a city on the leading edge of paying living ages. The Ann Arbor city council requires that all companies it does business with pay their employees, at minimum, a living wage, which is currently defined as $12.52 an hour for employers who pay health care and $13.96 an hour for employers that do not provide health care. [Source: MLive, click here.]

The president' push to raise the federal minimum wage to $10.10 an hour aligns with a campaign for a statewide ballot initiative to increase the minimum wage in Michigan to the same amount. Michigan last increased its minimum wage to $7.40 per hour in 2008. It is among 21 states with a minimum wage above the federal level of $7.25. [Source: MLive, click here.]

But the other reason Barack had to visit Ann Arbor is Zingerman's Deli -- A. for the Reuben, and B. because Zingerman's co-owner, Paul Saginaw, has been to capital hill for talks with congress on how and why to increase the minimum wage. Read this great story of what it was like to be at Zingerman's for lunch yesterday: click here. Personally, I was within in minutes of being there myself, if I had only known! I was racing in my car from Michigan State to the University of Michigan, trying to make it to a 2pm meeting at UofM, so I was on main street while the President was one block away at Zingerman's. I wondered what all the police cars were for....

There are also two reasons all of this relates to coffee. A. paying the workers who grow coffee is important also. The countries they live in usually don't have a Barack Obama for a leader. Some have better -- the U.S. could learn a few things from Costa Rica in my opinion. But most have nothing even close. Voices of dissent are quickly snuffed out. Also, this is a place to clarify that the definition of "workers who grow coffee" includes both smallholder farmers, like those in Rwanda and Burundi, and the hired workers that many in the industry are trying to support through organizing, fair trade programs, etc.  It also includes employees at washing stations and in dry mills. It's a broad, diverse, important labor force that deserves to be compensated with a living wage.  

B. paying the workers who skillfully prepare coffee and serve consumers matters. That's what Paul Saginaw does and that's what the partners of Zingerman's Coffee Company do. They don't do it to be charitable. They do it because it's good business. I don't know if they pay baristas the Ann Arbor City Council's standard of $12.52/hr. But I do know for a fact, that Zingerman's employees are treated with respect and given ample opportunities and support to get training. Trained workers, who are treated with respect, are loyal workers. They also tend to be innovative and become problem solvers, not complainers.

With the issues facing coffee at origin, does anyone think we might need the workers in the fields and at the washing stations to be innovative problem solvers? If there is no President Obama or U.S. Congress to pass laws to help coffee businesses in Mexico, Colombia, Vietnam, Brazil and elsewhere operate at the level needed for the 21st century, it obviously remains to those of us in the coffee industry to simply do the right thing -- for business reasons.






Saturday, February 22, 2014

10. Rust to Resilience in Nicaragua

Feb 22, 2014
This CRS Coffeelands post is a beautiful verfication of the importance of the kinds of resilience Artisan Coffee Imports and many others in the resilience "camp" seek to encourage and actively support.
http://coffeelands.crs.org/2014/02/391-coffee-leaf-rust-update-nicaragua/

This report from Michael Sheridan and others at Catholic Relief Services (CRS) of the worsening situation for coffee producers in Nicaragua gives a good "360 degree" look at the situation. It's not just the crisis of the coffee-leaf-rust disease, as bad as that is, it's also the problem of 'customer concentration', to borrow a term from manufacturing. With 94% of income coming from coffee, these business people suffer from classic 'one customer, one market' issues. And the lack of crop diversity also reduces food security and dietary diversity.  And it's the problem of low coffee prices. And it's the problem of low productivity per hectare planted with coffee, which reduces income from coffee even when prices are good. And, and, and...

"Whole Farm/Household Livelihood Strategies"
Just when we are overwhelmed with the number and complexity of the problems for Nicaragua's coffee producing communities, Sheridan pulls us back from despair. He names the significant efforts in the past and on-going that are addressing root causes, such as tree renovation programs with disease-resistant plants, long term improvement of natural resources and programs financing crop diversity and kitchen gardens. His parting sentence is the most uplifting and is the point where all of us working on resiliency can heartily join forces with CRS:
 
"we believe that we need to look closely at the coffee production system ... and other sources of income and to develop whole farm/household livelihood strategies that provide sustainable relief for the poverty and vulnerability of these producers."

Here we see the door is open for the ways human ingenuity can help tackle the severe challenges presented by nature and past human errors and mistakes. By feeding the stomachs and the minds of the individuals living and working in Nicaragua, we are sure to find paths of innovation that are sustainable-over-the-long-term.




Friday, February 7, 2014

9. Three New Sustainability Tools

Feb. 7, 2014

Last week three new reports on measuring sustainability were released. All of them are interesting and relevant for the coffee industry:
1. "Measuring Sustainability" report from COSA, the Committee on Sustainability Assessment.
2. State of Sustainability Initiatives (SSI) Review, from SSI, the Sustainable Commodity Initiative (SCI) which is a joint initiative managed by the International Institute for Sustainable Development (IISD) and the United Nations Conference on Trade and Development (UNCTAD).
3. Root Capital's Social & Enviromental Due Diligence Issue Brief

Here are the websites where you can download the reports.
State of Sustainability Initiatives: http://www.sustainablecommodities.org/ssi/background

COSA Measuring Sustainability: http://thecosa.org/communications/our-publications/

Social & Environmental Due Diligence: http://blog.rootcapital.org/back-roads-to-boardrooms/root-capital-launches-issue-brief-series
This "Issue Brief" is especially interesting because they've also publicized the corresponding "detailed methodology", the "social scorecard" and the "environmental scorecard."