I find myself presenting the Neumann Foundation’s long-term sustainability approach to the coffee industry on a regular basis. I want to get companies more involved and develop a better understanding of what is needed in the field. In my conversations, I often hear one of these two questions: “When you do a project, can I get exclusive access to the coffee?” and “Is it a SHG grade, certified and fully traceable?”
They’re never ready for the landmine they’ve just stepped on.
If they ask about exclusive access, my answer is: “We encourage farmers to negotiate like true entrepreneurs – would you want to depend on only one supplier? Exclusivity in business normally comes with a premium, so if you are willing to pay up…”
With regard to the quality, I tell them, “If you work with us, we will be working at the coffee frontlines with you, in the regions where farmers need the most help and where we stand to make the biggest gains. Because of this, it takes at least 3 – 5 years to develop a well-structured, sustainable and profitable supply chain that can deliver great coffee. We have to take the time to get it right, and then we can figure out what to call the coffee.”
These are not necessary the answers folks want to hear, but I’ve got plenty of practice giving them. By their responses, I know immediately how serious they are about the work. If they smile, shake my hand, and move on, then I know they’re just looking to meet a marketing department goal. But if they start to ask more questions, and want to understand my perspective, I know we can develop a meaningful partnership where we all learn something.
Weak Links and Strong Links
On a powerful episode of his Revisionist History podcast, Malcolm Gladwell applies David Sally and Chris Anderson’s “weak-link” and “strong-link” argument to education. Essentially, he says philanthropists need to stop investing in the top-tier colleges attended by wunderkinds and instead give to regional schools that educate large numbers of students that have the most to gain. To me, that is the secret to coffee sustainability.
When we design a project, I’m thinking about it like this:
- Where are the farmers who need us the most, the farmers that no one else is working with?
- What do those farmers need to do to boost their yields and quality, and improve their own lives? What is a reasonable timeline for helping them achieve it?
- What are the real barriers to their success? What are the local power relations and how can we get around the local monopolies? Are we going to have to step on some toes to make it happen?
- How can I convince partners and potential partners to work with these farmers, even though it’s more expensive and takes longer?
Today, 70% of farmers worldwide still yield only about 4 bags per hectare. These farmers are the weak links in coffee, and we must invest in their productivity if we hope to secure the future of coffee.
Working with the farmers who need us most requires leaving our comfort zone, entering the uncharted coffeelands and disrupting broken structures that got us here. Creating equitable and profitable supply chains is long, hard work that requires coordinated action, but it is the only way to truly protect our shared future.
Eastern Honduras: It Wasn’t Easy or Cheap, But We Got It Right
If any place is outside the coffee comfort zone, eastern Honduras is. When we started working there, the coffee market was messy. Farmers sold wet parchment coffee on a volume basis (“latas”). It’s an antiquated (and today even illegal) unit of measurement that local buyers can easily manipulate. The result: farmers getting ripped off by as much as 30%, and at the same time there is no incentive to produce quality coffee.
Our first step was to help farmers dry their coffee and sell it on a parchment/green bean ratio. We brought in trusted exporters for this approach, but the local intermediaries were not so happy.
Our staff even received threats to get out of the region. Everyone knew the old system was broken, but everyone was also making a few bucks along the way and didn’t want to risk upsetting the apple cart.
We stayed, because we knew these farmers needed our help to realize their full potential. Today, after five years, the farmer groups are strong and the beans are being sold in honest and transparent ways. Exporters treat farmers as business partners, and intermediaries have even accepted this as a new reality (though they still grumble from time to time).
The result: farmers receive around 30% more profits, through a fairer and more productive supply chain that yields higher quality beans. The effort was possible through a strong partnership between our team on the ground, our close allies of IHCAFE, Technoserve’s experts, and forward-thinking exporters and roasting partners. We still have many issues to tackle, but I am proud on the work we have done building a model that disrupts broken structures and puts the farmers on a level playing field.
This is not what many potential partners have in mind when we sit down together. But they should.
The Business Imperative
Yes, we are putting the human being ahead of the bean, but I know coffee is still a business, and we must attend to the business imperative.
The “supply math” is pretty simple – many major coffee companies worldwide have “100% sustainable by 20XX” goals. But, the supply of high quality, sustainable/verified/certified coffee is already at its limits, locked into well-functioning supply chains. Competition for the existing “sustainable coffee“ is intense and will only become more so. Unless we grow the total supply of sustainable coffee by working with the weak link farmers, we run out of great coffee, standards soften, and non-compliance scandals arise. We’re already seeing a bit of all three.
We should not be in the business of guaranteeing a portion of the sustainable bean supply to any one trader, or pushing for standards cooked up by marketing departments. It doesn’t serve farmers, and it doesn’t increase the overall supply of quality coffee.
We should be in the business of supporting farmers to grow more and better beans, and to get a price for those beans which allows them to lead a dignified life. That’s a sustainable future of coffee: empowered farmers who have the tools and skills to grow higher quality beans that are better for their bottom lines.
Get in touch if you want to get sustainability right – for farmers, industry and consumers!
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