For a more transparent, ethical and green coffee trade

Considering that the global coffee trade is characterized by price instability and the vulnerability of producers, many players in the specialty coffee industry are questioning the current purchasing model. It seems necessary to think about alternatives based on production costs, on sustainable commercial relations as well as on values of transparency. We wanted to interview a few roasters from Quebec, Mélanie Gagné from the P’tite Brûlerie, Celia Meighen McLean of ’Arvida Roasting Co., Marc-Alexandre Emond-Boisjoly from94 Celciusand Louis-Philippe Brouillette fromGhost Cafe, to learn more about their vision of the coffee market as well as their respective practices.

The shortcomings of the coffee industry

One of the great challenges for the global coffee industry is to rethink the pricing structure which currently meets the needs of all actors in the supply chain except coffee growers.¹. Known as the C Price, the price of arabica fluctuates based on its price on the New York-based Intercontinental Exchange (ICE). Coffee is processed there as a raw material, regardless of the origin of the beans or other factors of production. The use of coffee as a financial tool through speculation has negative impacts on coffee farmers. Coffee farmers usually have a low profit margin. When the market price is falling, these can easily end up in the red. Sale of producing farms, abandonment of part of their plantation or inability to invest in their facilities. The consequences affect them in the long term. The observation is undeniable: the C Price does not reflect the costs of producing coffee and makes coffee growing a profession that is not entirely viable in the current context of market laws.ché ².

What about specialty coffee?

Specialty roasters are aware of the financial, social and environmental issues that affect coffee growers and seek to respond to them in different ways. To consider some of the issues, three guidelines are, in particular, put forward; or the importance of industry transparency, the establishment of ethical relationships between roasters and producers as well as the development of a common reflection on the environmental impacts of coffee growing. The owners of La P'tite Brûlerie, Arvida Roasting Co., 94 Celcius and Fantôme have agreed to share with us their avenues of reflection about these three orientations and thus allow us to better understand the specialty coffee trade. , at least in Quebec.

A question of transparency

Ensuring accessibility to information about coffee production and the purchase of green beans is one of the keys to enabling consumers to make more informed choices. In fact, when purchasing coffee beans, it is difficult to determine how ethically they were produced and purchased. For many specialty roasters, transparency is one of their key principles. The case ofOnyx Coffee Lab, a coffee roaster from Arkansas in the United States, is one example among many. Each of their coffee presents an exhaustive file including the name of the producing farms, the quantity purchased, the score of the coffee, the cost of purchase, import and production as well as comparisons (the price suggested by the C Market as well as the minimum price of Fair Trade). Based on the information they are able to disclose, Onyx Coffee Lab gives itself a transparency rating (A + to F), in order to be completely honest with coffee consumers. Contextualization work is also being done, to varying degrees, on the side of Zab Roaster, Pista, Café Lanterne or Pirates of Coffee, among others. The best way to find out more is to browse the official website of the roasters or contact them directly to find out about the traceability of their coffee in the rare cases where the indications are not there.s.

To participate in the transparency movement and encourage it by creating a form of community around its principles, some roasters will sign pacts. Among the best known, there is the pactThe Pledge to which, in particular, Arvida Roasting Co. is committed By signing, the roasters agree to produce detailed reports of their purchases and to make them public. This involves information regarding the name of the producer or importer, the Free On Board (Freight-On-Board) price, the quality score (SCA), the volume of grain, the duration of the commercial relationship as well as the percentage of coffee purchased transparently in relation to the total volume. For the Arvida Roasting Co team, that went without saying. The transparency report that they have to produce each year becomes a communication tool and facilitates the popularization of their information through a common vocabulary. Celia Meighen McLean, one of the owners of Arvida Roasting Co., believes communication is a critical parameter in bringing about change in the industry. Writing their transparency report is a key time to reconsider their choices and question their practices. By posting this one, the Arvida Roasting Co. team is also trying to get coffee lovers to question the way they consume. Other players in the world of coffee will also get involved by signing theSpecialty Coffee Transaction Guide of which the importer Coop Coffee (P’tite Brûlerie is a member). The signatories thus provide their information, thenThe Specialty Coffee Transaction Guidepublicly provides statistics based on the collected data as well as observations regarding the current specialty coffee market. In all cases, it is the same values of sustainability, fairness and transparency that we seek to promote.t.

The only downside to these transparency pacts is that they insist on the FOB (Free On Board or Freight-On-Board) price. This price includes what the coffee grower got for the coffee cherries, but also the costs for processing, storage and transportation as well as export costs. By knowing only the FOB price, roasters and consumers may not be fully aware of how much is actually paid to the producer (Farm Gate price). In many cases, this information is difficult to obtain, since the coffee has transacted in the hands of several intermediaries: from farm to import.³. As Celia’s Arvida Roasting Co. points out,

« Sometimes we get the FOB, other times the Farm Gate and sometimes nothing..

It is by initiating a discussion with the various players in the coffee industry, including consumers about the value of coffee and its distribution in the chain, that the transparency of the industry could, according to her, be built.

 

A question of ethics

When it comes to defining what, as such, is good practice, most specialty roasters seem to agree on a few key principles. Their pursuit of quality is usually accompanied by an awareness and desire to be a responsible player in the coffee industry. The issues that are at the heart of the discussions obviously concern everything that surrounds the supply of green grains. How much do coffee farmers receive during transactions Is this a reasonable amount When do they receive the sum (before or after harvest) Will this amount allow them, over the years, to cover production costs and even, to improve the installations Although the answers to these questions differ enormously, certain specific indications published by the roasters can help us to get the facts straight. Take, for example,le, Ghost Cafe which, for each of the coffees offered, puts the purchase prices in context. He indicates that in Central America, where most of his coffee comes from, a coffee farmer should receive a minimum of $ 2.22 USD / lbs to support himself and his family, that the Fair Trade price is between $ 1.40 USD / lbs and $ 1.70 USD / lbs, then how much Louis-Philippe Brouillette, the owner of Fantôme, paid for the coffee and whether the coffee farmer received the amount in advance. In this way, Louis-Philippe's approach to producers is explicit and allows us, as consumers, to better understand the purchasing context.

Among the levers that roasters have for purchasing green beans, there are, above all, importers and direct trade. A large majority of specialty coffees are purchased through an importer. Importers act as intermediaries between producers and roasters. For Marc-Alexandre Emond-Boisjoly, owner of 94 Celcius, this is his main way of getting supplies. He wishes to ally himself with trusted importers who share his values and who offer him traceability about his purchases:

« I like working with importers who only work with one country. The importer often selects the coffees himself and has real contact with the producers. Then, we build a relationship with the producer, we can contract the same coffee for several years.»

The implementation of such partnerships coupled with recurring purchases provide coffee producers with a stable source of income. This is also what Marc-Alexandre seeks to do by collaborating with women farmers in Peru, Guatemala and Brazil in particular. He particularly wants to work with those who have not yet exported specialty coffee and whose vision aligns with his. The monetary difference offered94 Celcius when buying green beans can, over time, have a significant impact on the quality of the coffees that these same farms produce. The two companies are thus growing together.

 

Photo: 94 Celcius

As for Phantom, Louis-Philippe chose, to overcome the shortcomings of the coffee industry, to buy only from small producing farms. With them, he seeks to develop lasting commercial relations avoiding to follow the momentary craze for a region, a variety or a single process. Its approach is based, above all, on direct trade, that is to travel to the origin, to meet the coffee growers, then to share their story with coffee consumers. Louis-Philippe occasionally works with importers such as Semilla, which for its part engages with specific groups that have difficulty accessing the coffee market. By going to smaller producers, he wants to have a positive and tangible effect in their lives. Among the actions that roasters can take to make the coffee trade fairer, the owner of Fantôme offers to buy their coffee beans directly from producers at fair prices or to be aware of the transaction terms when there are a third intermediary. Partnerships with producing farms should extend over several years, in order to make a substantial contribution to their sustainability and vitality. It is in line with this approach to the coffee trade that Louis-Philippe has just purchased the first batch of specialty produced on Ingrid Olivo's farm located in El Salvador and is committed to supporting it throughout its transition to the specialty coffee market.

The expressionsDirect trade,To the source WhereDirect relationship are part of the vocabulary for talking about coffees bought directly from the producer, without an intermediary. Not being protected designations, these expressions can however imply various conceptions. Some may associate it with establishing a direct partnership between producer and roaster, others may add the importance of the relationship, a relationship formed for the long term and for mutual benefit. In addition to their fluctuating definitions, these overly encompassing expressions find it difficult to express certain purchasing structures. For example, P’tite Brûlerie buys its coffees through Coop Coffee, a cooperative of roasters from North America. On the other hand, it is an importer without an intermediary, since it is the roaster-members who constitute and are Coop Coffee. As Mélanie Gagné, the owner of La P'tite Brûlerie explains, it is clearly a matter of direct purchase, since the cooperative formula requires the involvement of each member in Coop Coffee and at the source. In fact, a quarter of the green coffees imported by them have come from partner farms for more than 15 years. In addition to paying the bill in advance, cooperative members make joint purchases, which means more green grain is sold for the producer at a time. Mélanie likes to draw the parallel between the baskets of organic vegetables to which we subscribe even before the harvest has started. For her, it is quite normal that this same principle applies when buying coffee. This allows coffee growers to prepare their future harvest with care and without financial worries. Another example to signify the lack of expressionsDirect trade WhereDirect relationship is about the one-to-one partnership that is implied. When a roaster buys the processed beans from a certain washing station and from a set of small producers in the region, the roaster-producer relationship is more difficult to define. By its imprecision and its changing definition, some players in the world of coffee simply avoid using it⁴.

Photo: La P’tite Brûlerie

Although there is a marked change in purchasing practices in the specialty coffee world, 94 Celcius’s Marc-Alexandre raises a point or two that could be improved. According to his observations, one of the big current issues is the liquidity of producers, hence the initiative, still rare, to pay in advance for batches of coffees. The long delay between when the harvest ends and when the farmer receives his money often creates financial needs. To prepare for the next harvest, producers will then have to resort to bank loans at incredible rates. The other element that Marc-Alexandre noted is that consumers' taste for grands crus, that is to say coffees with increasingly high SCA scores, leads coffee growers to finance expensive equipment, then to make trial and error on their coffee to improve their score:

« The work to increase quality is huge and the money in return is not necessarily as high as the workload involved.»

Of course, these are just two of many aspects that need to be reconsidered.

A question of the environment

The impacts of growing coffee from an environmental perspective are also relevant considerations to have. Like all agriculture, growing coffee requires a lot of resources, starting with water. Washed coffees are particularly singled out, since a large amount of water is mobilized during the processing of cherries. The sugars in coffee cherries end up in the water and ferment to become acetic acid. Sometimes this waste and acidic water enters local waterways causing disease and death to surrounding flora and fauna. Washing stations rank among the biggest sources of water pollution in some areas, according to the International Coffee Organization⁵. As Louis-Philippe de Fantôme points out, there are, however, ways to purify and reuse water from washing stations, as do some of its partners. For example, what is considered to be the waste of the coffee industry (the layers of the cherry that cover the beans, defective grains and wood) paired with waste water can be made into an excellent natural fertilizer. . Others will reuse wastewater to irrigate their coffee plantationsrs⁶. Louis-Philippe notices, with regard to the farms with which he works, that small coffee producers have a rather unique connection with the environment and seek to respect its cycle to ensure the sustainability of their agriculture.

For Mélanie de la P’tite Brûlerie, environmental issues concerning agriculture in general concern her, hence her decision to obtain Quebec Vrai organic certification. All the coffees it offers are chosen for their quality, but also because they have been grown with a view to sustainable and responsible agriculture. Organic cultivation requires establishing a healthy climate for planting coffee trees while ensuring productivity despite disease, infestations and climate change, which is quite a challenge. When it comes to organic coffees, this implies that strict standards are applied in order to preserve the environment in which the coffee trees are grown and that no pesticides or synthetic fertilizers are used. As the Specialty Coffee Association (SCA) notes, while coffee consumers have little reason to worry about pesticide residues ending up in their cups (since the exposed portion of the fruit is removed and the beans roasted), coffee growers, on the other hand, are exposed to toxins from chemicals⁷. Obtaining certification for Mélanie means continuing the work that was started by the coffee producers originally and respecting it until the very end by maintaining organic standards here as well. However, we should not think that certification is an end for Mélanie. Being a member of Coop Coffee, which also won the Sustainability award from the Specialty Coffee Association in 2020 for their environmental and sustainable commitment in partnership with producers, La P'tite Brûlerie sees the organic criterion as one of the facets of 'a more viable coffee business where everyone is a win-win. With Coop Coffee, they have also set up an environmental fund called the Impact Fund. The money from this fund is made available to producers to invest in their infrastructure, for training in agriculture or for technical support (for example, to convert to organic or develop better environmental practices).).

Pesticides and synthetic fertilizers being expensive, some smaller farms default to so-called organic practices, the majority of which are small coffee growers in Ethiopia.ie⁸. Some of them also voluntarily give up chemicals because of their values. They are qualified in English as passive organic (bio-passive). In any case, there is unfortunately no way to know if, when and how they use chemicals, or conversely, if they follow the standards of organic certification which includes, despite everything, several practices: the conservation and quality of soils and water, the protection of natural resources and even the support of biodiversity.

It should be noted that climate change poses a particular risk to the specialty coffee industry, since its cultivation requires high altitude and cool temperatures in order to slow the ripening of coffee cherries. Gradually, rising temperatures will require growers to establish their crops higher in the mountains, even though there is less and less land available for coffee cultivation. The natural shading process is also less efficient: the leaves burn and the coffee trees dry out faster in the sun, which undoubtedly affects the quality of the cherries. As a solution, some farms grow their coffee plants under a canopy of mature trees. Slower development means that the coffee cherries will have a higher density and incorporate more carbohydrates. This type of plantation also allows the maintenance and protection of biodiversity which, otherwise, is undermined by the monoculture of coffee in full sun. Shade cover regulates the daily temperature and humidity level, controls soil erosion and fertility, decreases the risk of insect pests and diseases and ensures pollination of coffee trees, which has a direct effect on the productivity and profits that growers will ultimately have. This means less chemical fertilizers and pesticides as well. While monocultures offer greater potential profits, shade plantations generally present less financial risk and have better resilience during unexpected climatic events⁹.

Make no mistake: organic farming often entails additional costs that must be borne by producers, says Louis-Philippe de Fantôme. Pruning shade trees, preventing and managing pests, manual weeding: all of this requires additional labor. Additionally, in a SCA article, it is said that acquiring a large volume of organic compost can be particularly daunting. If the farms with a washing station and a pulper can use the pulp of the cherries as a natural fertilizer as do all of the production partners of the P'tite Brûlerie, we notice that, in some cases, this will not be enough to answer to the strong demands for food from coffee trees. In insufficient quantity, their yield may be affected. We are talking, in some cases, of a reduced yield of 30% compared to a farm with high input intensity, hence the importance, according to Mélanie Gagné, of training in organic agriculture and making knowledge accessible. . The annual fees for certification can also be a drag for some producers. Even though there are bonuses granted to certified organic coffees, these do not always cover all the additional costs associated with this form of farming practice.¹⁰. In a SCA article, Julie Craves, an environmentalist and researcher at the University of Michigan Dearborn, offers some insight on this:

« The coffee industry is able to contribute to these activities by providing expertise, facilitating partnerships and encouraging innovation. Big industry players could help fund initiatives directly, and all frontline coffee suppliers have the opportunity to get involved and educate the public about the importance of organic coffee, the challenges it faces. present for farmers and the role of higher bonuses in promoting and stabilizing organic production - in other words, helping them to thrive. Organic certification is a commitment to sustainability that deserves our dollars.¹¹»

To put it another way, the certification process is a commitment that requires investment, but this monetary burden should not rest solely on the shoulders of producers. It would benefit from being shared between all the players in the chain. Mélanie de la P'tite Brûlerie shares this vision and believes that in the end, the certifications are worthwhile for both producing farms and for roasters, since it allows for a neutral inspection, by an organization independent of the company in question. They are a guarantee for the environment and for the quality of the product.

Yet 94 Celcius Marc-Alexandre finds from his various travels that the new generation of farmers is trying to be more and more organic, but with climate change there are questions of financial survival that are coming in line. account and many growers use agents to maintain a good harvest. The lack of financial incentives and the vulnerability of coffee producers to such questions would be two elements of the answer that allow us to explain, albeit partially, why there seem to be so few certified organic coffees offered.

One thing is certain, consumers want more transparency and traceability in their purchases. This growing feeling has allowed the specialty coffee industry to gradually gain momentum, recognizing the crucial role of the producer and valuing his work at the outset. Celia Meighen McLean of Arvida Roasting Co. says it's easy to forget the human behind all the products we consume. This is why several players in the world of specialty coffee are inviting you to take a step back and ask yourself questions about the ways of practicing their profession and of consuming. In Normal Coffee, Mélanie de la P’tite Brûlerie notes that the coffee trade is not viable if we only target one of the criteria, be it organic, fair trade, quality or price. It is a set of factors that make business practices go well or not¹².


Thanks to Mélanie Gagné (P’tite Brûlerie), Celia Meighen McLean (Arvida Roasting Co.), Marc-Alexandre Emond-Boisjoly (94 Celcius) and Louis-Philippe Brouillette (Phantom) for the enthusiasm, generosity and sharing.

 

Research and writing: Chloé Pouliot

 

References:

¹ « Bringing Fairtrade and The Specialty Coffee Sector Closer Together, Fairtrade..
² For the whole section:« Rethinking the C Price: Should We Change How We Price Coffee», in Perfect Daily Grind.
³ « Coffee Pricing: Why We Need to Know Farmgate And Not Just FOB », Perfect Daily Grind.
⁴ « What Does Direct Trade Really Meanan? », Perfect Daily Grind.
⁵ « Sustainability in Coffee: What Are The Main Issues? », Perfect Daily Grind.
⁶ « The Use of Water in Processing», SCA News.
⁷ « The Power of Organic Coffee », SCA News.
⁸ « The Pros & Cons of Growing Organic Coffee», Perfect Daily Grind.
⁹ Geneviève Durand,Shade coffee in Mexican mountain forests: combining the conservation of biodiversity and the economic profitability of producers, University of Sherbrooke, 2014.
¹⁰ « The Power of Organic Coffee », SCA News.
¹¹ « The Power of Organic Coffee, SCA News..
¹² Mélanie Gagné,# 018 Cooperatives, Café Normal.