Content
1 Introduction3
2 Market unrest5
2.1Roasters5
2.2Traders8
2.3Sustainability strategies9
3 Stress factors10
3.1Production and value distribution10
3.2Wages and labour12
3.3Climate change and deforestation13
4 Sustainability commitments16
4.1 Investments in sustainability16
4.2 Voluntary Sustainability Standards17
4.3Market demand19
4.4Sustainable Sourcing options21
5 Coffee sector collaboration26
5.1A global vision26
5.2Multi-Stakeholder Initiatives27
6 Conclusion30
Endnotes33
Sources34
Annex: Sustainable Sourcing 35
Colophon36
1 Introduction
Today’s co ee trends include
premiumisation, convenience,
customisation, single-origin,
and roast type. Consumers
increasingly appreciate
information about certi ed
sustainable and ethically
produced co ee.
It is widely perceived that in the global value chain of coffee profits are made in
industrialised countries, at the expense of environmental and social problems in the
coffee producing countries. Coffee is a buyers-driven supply chain, where roasters,
retailers and traders maintain a high level of opacity enabling them to capture most of
the gains. In sharp contrast with the margins made by farmers in developing countries,
the multinational food giants and investments funds in the USA and EU expect to
capitalise on growing demand in the coming decade. Billions are spent in countless
acquisitions and mergers, positioning famous coffee brands in new markets. As the
global coffee industry consolidates, it cuts costs to optimise profits which causes
additional downward pressure in the value chain, which is increasingly felt by the
producers at the farm level.
Trouble is brewing in the sector. A wide variety of complex and systemic issues
-environmental, social and economic- jeopardises the future of coffee production.
Price volatility, climate change and recurring outbreaks of pests and diseases threaten
a structurally increasing global supply of good quality coffee, while consumption and
therefore demand is expected to increase.
In this new edition of the Coffee Barometer, we pinpoint some gaping holes in our
collective knowledge that urgently need to be tackled. For example, coffee production
has been growing by over 20% (+26 million bags) since 2010, but we do not know how
much forested land has been converted into farm land used for coffee production.1
Furthermore, it is assumed that 20-25 million smallholder farmers produce 70% of the
coffee globally, an estimate that stands unchallenged in the last 15 years.2 The coffeeharvest therefore depends on millions of farmworkers; an important but invisible group
of stakeholders. They remain largely voiceless in the discussions about a sustainable
coffee sector.
To cope with such issues, stakeholders supporting a sustainable coffee sector have
been at the forefront of shifting towards the procurement of certified and verified
coffee. Linking all stakeholders in the value chain with standards, training, certification,
and seals of approval, the coffee sector is more advanced than any other commodity.
Still, certification and verification systems appear unable to reach smallholder
producers in Africa and Asia, and drive market uptake in consuming countries.
Increasing demand also yields an opportunity for positive change. The growth of the
specialty coffee sector leads to more direct sourcing initiatives. If executed properly,
these can promote traceability and coffee quality, and provide a managed response to
some sustainability challenges.
Moreover, there is growing support for non-competitive sector collaboration, blending
public and private investments to address fundamental sustainability challenges
at an impactful scale. Such initiatives to bring about sector-wide change, like the
Global Coffee Platform (GCP), the Sustainable Coffee Challenge (SCC) and national
sustainability platforms, share many of the sector’s sustainability goals. However,
steering collective investments in the coffee value chain towards the development and
implementation of solutions to sustainability issues, remains a difficult yet pressing
challenge.
In this Coffee Barometer, we examine the recent boom of acquisitions and mergers,
and track the main trends. We investigate the power relations embedded in the global
coffee value chain, and the root cause of the main sustainability stress factors. In view
of these challenges, we will examine the sector’s strategies for change, and individual
and collective efforts to create a truly sustainable coffee sector.
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