UNDERSTANDING SUSTAINABLE COFFEES
1) THE CHANGING WORLD OF COFFEE GROWING
Growing coffee provides primary income for millions of families
1) Second most traded commodity in the world
2) Coffee grows in 80 countries
3) 70% of world's coffee grown by small farmers
4) Largest producing countries are:
a) Brazil (Bumper crops past few years)
b) Colombia
c) Vietnam (Poor quality robusta, last five years has flooded an oversaturated
market with more coffee)
d) Indonesia (Poor quality robusta and arabica)
5) Typical per capita income:
a) USA: $25,000
b) Costa Rica: $2,100
c) Kenya: $250
Too much coffee is grown in the world, versus world demand. Problem does not show signs of going away anytime soon. Oversupply of coffee –
especially poor quality robusta and arabica “triage” coffees – depresses value
of harder to grow quality coffees. Low prices have devastating impact on coffee growers, their communities, and
the environment. Little incentive to produce quality coffees, or take care of
the environment, if you can’t feed your family. “Sustainable Coffee” attempts to simultaneously address concerns of
responsible coffee consumers and key problems of coffee growers.
2) WHAT IS SUSTAINABLE AGRICULTURE?
Definitions of “Sustainable” Agriculture -
Simply put, sustainable agriculture integrates three primary objectives:
• Environmental health
• Economic profitability
• Social justice and equity
Sustainable agriculture is a way of farming that can be carried out for
generations to come. This long-term approach to agriculture combines efficient
production with the wise stewardship of the earth's resources. It is hoped that,
over time, sustainable agriculture will do the following:
• Meet human needs for quality food
• Protect the natural resource base and prevent the degradation of soil and
water quality
• Use non-renewable resources efficiently
• Utilize natural biological cycles and controls
• Assure the economic survival of farming and the well-being of farmers and
their families.
3) THREE COMPONENTS OF SUSTAINABLE COFFEE
Organic
• Coffee growing areas are tropical, overlap some of the most environmentally
important areas in the world.
• Naturally grown without synthetic chemicals
• Harder to grow, lower yield impacts prices and profits
• CBI leader since 1982 in offering certified organic coffees and teas
Shade-grown
• Most important in Latin America
• Shade trees help protect the environment
• Older, tastier varieties of coffee grow best in shade
• Shade-grown coffee essential for migratory birds and insects
• CBI a founding member of the Northwest Shade Coffee Campaign, nation’s leading
advocacy group for shade coffee
Fair Trade
• Guaranteed profitable base price for growers
• Money trail audited to ensure money goes to farmers
• If market price increases, base price moves at $.05 above market.
• Fair Trade enhances coffee growing families and communities, can improve
coffee quality, too
• Central America family income can double income with Fair Trade, providing
enough money for schooling, medical care, and other necessities.
• Fair trade will help growers stay in business now and for years to come
• CBI one of the first fair trade certified roasters in the country
4) EMERGENCE OF “SUSTAINABLE COFFEES”
Organic, Shade, & Fair Trade coffees not new, just gaining visibility
1) Convergence of US specialty foods and natural foods consumers
2) Organic food sales growing at well over 15% annually
3) Pacific Northwest national leader in quality of life issues
Need for a unifying "umbrella" concept has emerged
1) Sustainable coffee popular in Europe for 20 years, has significant market
share of coffee sales
2) First Sustainable Coffee Conference sponsored by SCAA and the Smithsonian
Migratory Bird Center in 1996
Definition of Sustainable: Convergence of three concepts "3 E's"
1) Economics (How coffee is bought and sold: Political & Social)
2) Environment (How coffee is grown: Environmental)
3) Excellence (How good is the coffee: Specialty Coffee)
For a coffee to be "sustainable", all three areas need to be incorporated.
Thanks to Kevin Knox of Allegro Coffee in Boulder for summarizing the concept of
the 3E’s…
5) MARKETPLACE TRENDS
Sustainable coffee has consumers' interest:
1) A recent national survey found that:
a) 21% of coffee consumers in US "very interested" in shade-grown coffee
b) 39% additional coffee consumers in US "somewhat interested"
c) Quality of taste is still most important factor to consumers
2) A recent survey in the Seattle area revealed:
a) 41% of coffee consumers drink specialty coffee (triple national average)
b) 75% of these consumers expressed a willingness to pay a little more for
sustainable coffee, provided quality remained high.
Leading retail players are getting into sustainable coffees
1) Starbucks
a) 4,500 stores worldwide in 39 states & 21 countries
b) Recently announced they will buy a minimum of 1,000,000 pounds of Fair Trade
coffees in 2002.
(Sounds like a lot, but works out to about 1 pound per day per US store….however
it will generate lots of awareness and interest with public)
c) Retailing "Fair Trade Blend" for $11.95 per pound
d) Offering Sustainable coffees as coffee of the day every 20th of the month in
US stores
e) Uses in-store marketing materials
f) Working to stay current with expectations of customers.
2) SBC
3) Tully's
4) Coffee People
Sustainable coffees are beginning to be promoted in other upper-end
mainstream retailers
1) Borders
2) Trader Joe's
3) Safeway
4)
Hyatt Hotels
5) Nordstrom
Sustainable coffee not for everyone
(yet)
1) Dunkin Donuts: "Eco Blend" test marketed in Chicago and
Washington DC. Not successful enough to roll out system wide.
2) Proctor
& Gamble / Folgers: "The way we buy beans is very complex…"
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