An online resource library for the coffee industry
Impact of COVID-19 on the global coffee sector: Survey of ICO exporting Members
COVID-19, coffee production, farmers, export
International Coffee Organisation
This report presents results from a survey launched by the Internal Coffee Organisation (ICO) in May 2020 and directed to 16 exporting countries. Responses were provided by representatives to the ICO and other organisations which shared their perspectives on the local situation caused by COVID-19. The first section presents the impact of the pandemic on the coffee sector, assessing that 80% of the countries had implemented risk-management measures, such as social distancing. According to the report, even though not all the countries felt particularly affected by the measures, criticalities arose in countries starting the harvest season, due to lack of labour and employment. A decrease in income and access to finance has also been highly reported. Finally, on a local level consumption has shifted to e-commerce and delivery. In the second section, the report presents some projections on the impact of COVID-19 on the long-term sustainability of the sector indicating negative and positive factors. The last section includes the policies and support measures that the different government implemented to mitigate the impact of COVID-19 on the coffee sector. This report is particularly interesting for professionals looking at future projections of COVID-19 impact on exporting countries.
New insights into leveraging coffee ‘middlemen’ for smallholder living incomes
Living income, middlemen, coyotes, coffee production, producers, origin
Sustainable Trade Initiative
This blog analyses the results of four different case studies conducted in Colombia, Vietnam, Indonesia and Uganda by IDH in partnership with Enveritas. The scope of the study was to better understand the role of middlemen into the coffee sector. According to the study, a strong majority of the coffee is sold through middlemen before it reaches exporters. Additionally, they often offer additional services to individual farmers such as transportation, access to inputs and loans. As results showed, since middlemen have such a big role in buying coffee, as well as supporting producers with other activities, IDH sees a window of opportunity to optimize service delivery via middlemen in order to reach a larger share of farmers. This blog is particularly interesting for coffee professionals looking at the dynamics of the coffee value chain and the role of the different actors.
By collecting millions of transactions of different coffee purchases in the US, the SCA together with Square assessed the trend American coffee consumers during the COVID-19 pandemic. The objective of this study was to understand changes in trends of consumption and responses from different cafes. Results show that in this period a huge increase has been recorded of pickup purchases and deliveries. This increase of home-safe solutions was also aligned with a great rise of subscription offerings and sales. Additionally, the price paid by consumers for drinking their coffee at home increased as well as the purchase of brewing equipment. Results show a comprehensive analysis of how coffee purchasing and consumption changed in the US during the COVID-19 pandemic. This report can be interesting for any player willing to understand new coffee demand trends.
Volatile coffee prices: COVID-19 and market fundamentals
Hernandez, M. A., Pandolph, R., Sänger, C., Vos, R.
This report presents an overview of the coffee prices fluctuation during COVID-19 and potential future scenarios. The pandemic has represented a high volatility in prices and a considerable shock in supply and demand. According to the analysis, this fluctuation depends on the changes in the functioning of key export infrastructure which reached almost all producing countries due to lockdowns measures. Also, the pandemic caused delays and drops in shipments as well as local currency devaluations. At the farm level, social distancing measures have affected the availability of seasonal labour, causing additional delays at harvest. On the demand side, consumption has decreased causing a negative growth forecast for 2020. The report concludes with three potential policy responses for Governments to consider to decrease the economic shock for the sector. This report is interesting for all players in the value chain interested in learning more about the market fundamentals of COVID-19.
Coffee, farmers, and trees—shifting rights accelerates changing landscapes
Companion modelling, agroforestry, grevellia robusta, india, policy, role playing games
Claude A. Garcia, Geremy Vende, Nayana Konerira, Jenu Kalla, Michelle Nay, Anne Dray, Maelle Delay, Patrick O. Waeber, Natasha Stoudmann, Arshiya Bose, Christophe Le Page, Yenugula Raghuram, Robert Bagchi, Jaboury Ghazoul, Cheppudira G. Kushalappa and Philippe Vaast'
This info note present a participatory modelling study run to (1) understand the drivers of landscape transition and (2) explore the livelihood and environmental impacts of tenure changes in the coffee agroforestry systems of Kodagu (India). The components of the system, key actors and resources, and their interactions were defined with stakeholders, following the companion modelling (ComMod) approach. The underlying ecological processes driving the system were validated through expert knowledge and scientific literature. The conceptual model was transformed into a role-playing game and validated by eight workshops with a total of 57 participants. Two scenarios were explored, a No Policy Change as baseline, and a Restitution of Rights where rights to cut the native trees are handed over to farmers. Our results suggest that the landscape transition is likely to continue unabated unless there is a change to the current policy framework. However, the Restitution of Rights risks speeding up the process rather than reversing it, as inter alia, the deferential growth rate between exotic and native tree species, kick in.
COVID-19 leads to firmer coffee prices: for the time being
Coffee price crises, C market, COVID-19
This short article presents a market analysis of the coffee price right after the spread of COVID-19 until April 2020. According to the article, the different factors influencing the current stabilisation of the market price depend on Brazil, which is currently running down of stocks and roasters around the world trying to secure the inventories before of a possible shortage of supplies. This has temporarily increased the demand. On the other hand, importers are securing their stocks, which might have negative consequences in the future and reduce the market price again on the medium- and longer-term. Additionally, Vietnam and Central America are currently off-season and consumers demand has dropped in relation to the closing of restaurants and cafes around the world. According to the article, as soon as this scenario will change, coffee prices could be negatively affected once more. This article is of particular interest to readers passionate about the politics and economics of the sector.
Impact of COVID-19 on the global coffee sector: the demand side
The International Coffee Organisation analyses in this report the impact of COVID-19 on the demand of coffee consumption among the 20 biggest consuming-countries in the world. According to an analysis focused on data collected between 1990 and 2018, a positive correlation exists between the increase of GDP and coffee consumption. As results show, a one percentage drop in GDP, causes a 0.95 percentage decrease in coffee consumption. This scenario is particularly concerning according to this unprecedented pandemic situation, whose consequences are still unclear but will definitely have strong effects on the coffee sector. More detailed assessment of the economics is presented in the report. This report is particularly interested for coffee professionals passionate about the economics of the sector.
Strategy handbook: a fact-based exploration of the living income gap to develop effective sourcing and pricing strategies that close the gap
Coffee price crises, Colombia, coffee farmers
The Sustainable Trade Initiative
This report presents a framework to identify and measure the living income gap in different coffee producing countries. It does so by presenting a cross section analysis of supply chain data gathered in Colombia through different companies and organisations who contributed their information to this research. Assuming that coffee beans are sold with different models according to the market segment, the sourcing relations, the value chain structure and the recognition of quality and sustainability, this report presents four sourcing archetypes that can be used as a model for international coffee trading. Among this model, the first archetype is the conventional segment which represents around 70% of the market and specialty coffee, being the last, holding only 4% of the market. The study projects these four archetypes to the Colombian market and presents an assessment of the living income gap. Results show that only coffee producers selling for the specialty market are able to meet and go above the line of living income. The rest is struggling to reach the line and in some cases is way below the minimum level. For coffee companies interested to know how to proceed with their own assessment, this report can be extremely useful.
Time to wake up: why a holistic approach is needed to tackle sustainability challenges in the coffee sector
Climate change, human rights, sustainability, tool
Löning: Human Rights & Responsible Business
This knowledge paper describes the environmental and human rights challenges present in the coffee sector. It does that by providing contextual facts and figures of the industry and also presenting an overview of the projected challenges that might occur in the coming years. Secondly, it focuses on offering concrete and adaptable recommendations to the different actors involved on how to make this sector more sustainable. Suggestions are directed mainly to roasters, buyers and producers and express the need to understand the context of the supply chain in which the single actors are engaging, initiating a thorough analysis of the system. Then, it presents additional recommendations on how to be transparent, how to properly engage at origin, build strong relationships, engage in collaborative actions, count on certifications and be innovative. The report concludes with an interview to Paula Mejia from the Sustainable Business Unit at Neumann Kaffee Group. This paper can be particularly interesting for coffee companies working both at the first and last mile of the chain interested in initiating few concrete strategies for a more sustainable system.
What if all coffee was sustainable
Sustainability, system change, farmers, SGDs, Sustainable development goals
Sustainable Coffee Challenge
This document presented by the Sustainable Coffee Challenge in partnership with the Global Coffee Platform and Conservation International draws on the connection between a possible sustainable coffee sector and the nexus between four main pillars: a sustained supply, the conservation of nature, a strengthened market demand and the improvement of livelihoods. In addition, it assesses how the improvement of farmers’ profitability is at the backbone of creating sustainability throughout in connection with the twelve SDGs corresponding to the system. Finally, it presents an analysis reporting how the different pillars are interconnected, addressing the importance of triggering a chain of efforts to create system change towards a more sustainable industry. This framework might be particularly interesting for stakeholders directly engaged with sustainability analysis and looking for an overview of the system.
The real price of coffee & steps towards a sustainable future
Price crises, fair price, living income, farmers, wage
Columbia Center for Sustainable Investment
This informative leaflet presents a comparison of the price perceived by coffee farmers and the average price paid for a cup of coffee in a consuming country. It gives some context on the reasons behind such low prices have been paid to farmers around the world and it informs consumers on how make the right choice when purchasing coffee. Indeed, the leaflet presents some options for consumers to buy differently, reporting a few names of sustainable coffee companies, but also options connected with buying certified coffee or specialty coffee. It includes a small infographic regarding the countries whose producers are payed the least and a quick explanation on premium prices. This is a very recommended leaflet for all consumers looking for concrete and practical suggestions on how to buy their coffee if they want to participate to a more sustainable value chain.
Value chain upgrading strategies for integration of indian small coffee growers in global coffee value chain
Value chain, coffee growers, price spread, coffee board, blockchain, cost of production
This paper indicates that there is a huge price spread in coffee value chain due to the inability of the small coffee growers to ship their coffee directly to export destinations which is caused by a number of impediments like low bargaining power associated with fragmented production, lack of trade knowledge, lack of capital and information barriers. Thus, it is important to provide visionary long run sustainable solutions to micro level weakness and threats by considering strengths and opportunities of small coffee growers in the country to move up in the value chain. The results of the study also indicates that, there is huge potential for the coffee growers to enhance their gross income by moving up in the value chain. The study also highlighted the initiatives taken by the Coffee Board of India to support small coffee growers to move up in the value chain.
Ensuring economic viability and sustainability of coffee production
Sachs, J., Cordes, K. Y., Rising, Toledano, J. P., Maennling, N
This report analysis deeply the challenges of the coffee sector and presents different business solutions that could be implemented to support a more sustainable scenario for all the actors involved. The report starts with a deep investigation on the current situation of the industry. It presents the challenges affecting producing countries, that are struggling with lower prices and higher costs of production and, also, the blooming momentum of consuming countries, whose activities are resulting in higher margins year after year. Then, it analysis the consequences of future changes in both demand and supply and it presents possible projections of future scenarios. This analysis is also aligned with the increasing consequences of climate change that, according to the study, will exacerbate the challenges of producing countries and create important concerns also for buyers, roasters and consumers. To counteract this scenario, the report suggest three solutions: the introduction of a National Coffee Sustainability Plan introducing dedicated policies on an international level, a Global Coffee Fund ready to grant economic support in case of specific needs, and the use of new tools to potentially increase producers’ profits, such as the introduction of new technologies or of a minimum farmgate price. This report is of interested to everyone willing to learn about the future of the coffee sector through a comprehensive analysis.
Sustainability certification as a pillar to promote indonesian coffee competitiveness
This paper reviews (1) perspective analysis of sustainable coffee certifications, (2) analysis of Indonesia coffee industry, and (3) strategy formulation in improving practices and accountability of Indonesia coffee development in global supply chains. There is evidence for a range of social, economic, and environmental benefits of certification. These certifications have the potential to create value for smallholders, as certain certified coffee carries a market premium. In order to meet market demand, coffee farmers have had to adapt a good farming practices to qualify for certification.
This research has been written for The Ellen MacArthur Foundation and it focuses on how the topic of waste management can be used as an opportunity rather than a threat. In fact, according to the article, this is an industry of 10+billion USD, where innovation comes as an opportunity to develop benefits for the industry. The main catalysts for such a shift reside in the technology engagement especially on the digital aspect of it, and in the shift of the final consumer’s preferences that will eventually become more oriented towards recycling and recycled products/policies. The outcomes that derive from such evolution are diverse and include: enhanced user experience, products that are crafted to meet the individual user’s needs and gather insights from them, a systematic enhancement of the brand loyalty form the final consumer, better and optimized operations that lead to an ultimate cost saving structure. The study maps 69 reuse examples generated by the study of 100 cases, with the contribution of more than 50 experts. This article can be interesting for anyone in the industry who wants to have an easy to ready and detailed guide on reuse and recycle critical topics.