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Is there truth in advertising?

So recently I saw a TV ad from a large coffee company think Na and apple bob(ing) that got me thinking and a couple of questions from people asking if the coffee I am going to be importing is Fair Trade. Just what does Fair Trade, Rainforest Alliance, Bird friendly and a  few other classes really mean? I feel there is some disinformation out there so let’s have a look.

Coffee is the number one traded agricultural commodity in the world, that’s right ahead of even wheat or rice. Coffee purchasing for the bulk of the market works along these lines, the price is set on the commodity futures exchange of the New York Board of Trade. So the price is set there and that is the price that large brokers around the world sell coffee to companies for. The farmer does not get that price. Let’s say that coffee is currently at $1 per pound on the exchange, I work for a broker and we pay our farmers $.20 per pound for their coffee, Big multi-national food company comes to us and buys coffee for $1 a pound, roasts it, packages it and ships it around the world selling it for $7-18 a pound…..nice work if you can get it. The thing is that the price on the exchange is driven by supply and demand not unlike oil. So if the price of coffee drops on the market for whatever reason (recession) then the farmers will flood the market because they work on very slim profits and will try to make the some money by selling more coffee at a lower price thus flooding the market and causing the price to drop further. The farms are run not unlike a KFC  chicken farm or maybe a big swooshy companies shoe factory in Asia. Child labour, poor living and work conditions, land is over farmed etc. Remember coffee trees generally only bloom once a year.

So along comes the idea of paying fair pricing that allows better working conditions and more money for farm employees. Let’s call this idea Fair Trade. Fair trade looked at a few things, first it addressed pricing, the minimum price for Fair Trade coffee is $1.25 and add $.20 to that if it is certified organic. They also force the farmers to provide better health and safety standards as well as paying higher wages. Sounds good? Well there are a couple of issues, first this still works through a broker so the broker gets paid $1.25 per pound not the farmer, yes the farmer does get more as well but not $1.25. Also the farm has to be certified and that costs between $2500 and $10000 that the farmer is responsible for paying. That’s a lot of coffee at $.20 per pound just to get maybe $.30 per pound instead. Doesn’t really sound so great anymore.

Next let’s look at Rainforest Alliance certification, the one that big Apple Bobbing company talks about in their ad that shows happy kids with fresh water and school books. Well the Rainforest alliance is really a certification that prevents big farms from stripping the land bare to plant coffee trees to make more money, yes they do get paid a higher price for Rainforest certified coffee but there is no minimum price like there is with Fair Trade. Basically Rainforest coffee means that the farm must maintain 40% shade from Rainforest vegetation for the coffee trees. They also can not change the course of natural water flow through the plantations. Kids under 15 can not be employed and they can’t be forced to carry more then 20% of their body weight and all workers must be paid a fair wage. Oh and certification is free. Again, some good things here but not really addressing all the issues.

Up next is Bird Friendly, Bird Friendly addresses nothing associated with price or labor standards. It certifies that the farm meets Organic certification standards, maintains the forest preserving the bird and wildlife habitats and that’s about it really. So essentially it’s a fancy term for organic shade grown coffee..

Organic and shade grown, well see above, I think that spells that out for everyone.

The last one is not actually a certification method but rather a purchasing method being pioneered by a number of small roasters primarily in North America. It’s known as Direct Trade or Relationship coffee. So first things first, we get rid of the broker and deal directly with the farmer or a co-op of farmers. Second price minimum’s vary but usually they start at $1.60 a pound or at least 25% more then the Fair Trade price which would make Direct/Relationship pricing $1.94 for non-organic and $2.25 for organic certified per pound and this goes to the FARMER, all of it. So the farmer that is too small who can’t afford to pay for Fair Trade certification is suddenly getting 10 to 20 times the price he normally would for his coffee. Direct trade also although loosely, set’s standards for the workers living conditions, wages, child care, schooling etc. The roasters work with the farmers as well to improve environmental standards as laid out by organic or shade grown practices.  These roasters also actually visit the farms they work with to make sure that the things they want done for the increased prices they pay go actually get done. In return these roasters get the very best beans from these farmers and of course the best beans result in the best coffee you can find. This method addresses almost all the issues of the other standards, the only problems being it’s not a set list of standards but a loose set of guidelines.

The point here being? Well there are some companies out there trying to make money off the increased awareness of global social and economic issues by saying look at what we are doing but, are they really doing it? Then there are some companies out there really trying to make a difference.  Let’s  not also forget that while this big company is touting it’s good business practices it is also producing things like disposable coffee capsules, right, because the world needs more plastic in the garbage? The same companies pushing Direct Trade or Relationship coffee’s are also trying to find better packaging methods. Methods that don’t use polymers or are biodegradable, some of them even do things like having their roasting facilities and cafes use only green energy. Have extensive recycling programs for everything from cups to bags to spent grounds the materials used in their facilities and low VOC paints. Seems like a pretty easy decision to make regarding who should be getting your coffee money if you ask me.

If you actually made it to the end of this, pat yourself on the back and thanks for listening. I tend to ramble on when I talk about something I am passionate about, ask my wife….


About Kevin

I'm a coffee loving, bike riding, husband, father, brother, father, son, sorta wanna be foodie and these are my thoughts on anything I want. I'm opinionated and say it like I see it, if your easily offended then this is not the place for you. Expect me to talk about coffee a lot and expect me to rant about customer service, sales and things that companies do that make no sense.


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