Ethical and responsible business?
What does it even mean? Isn’t it just an empty phrase?
NOT FOR US!
Our business stands on three pillars. Without them, we will not cooperate with a producer. They are:
You can learn more about these three aspects in our various articles. Most importantly, neither of them would be realistic without the foundation of any healthy and sustainable trade with the third world. This keystone is mutual trust. It manifests itself in transparent ownership structure and the will for longterm cooperation.
- ecologically sustainable agricultural practices
- positive social impact
- highest and stable quality of coffee
In order to be able to explain how one can trade coffee responsibly, we must first clear up where the main problems of the industry lie these days.
The biggest problems of today's international trade are monopolisation and information asymmetry. That’s a situation where one side of a deal profits from a better access to information and markets, which gives it power to manipulate with the other side, which lacks key information. For example, notice how many importers show their green coffee prices online publicly. The real prices are hidden to both the layman end customer, who can’t assess how an importer operates, and the producers and farmers, who generally have no idea what the margins added to their produce are.
How exactly do monopolies and information asymmetry affect the coffee industry?
The global coffee market is ever more consolidated. Many companies control the coffee production chain from the very beginning - they own the farms or stations themselves and decide the farmers’ wages - all the way to selling roasted coffee in consumer countries, where they set the end prices. This chain is always hidden behind a complicated and non-transparent ownership structure, obfuscating the reality.
In practice, this means that farmers and producers often have no information according to which they could assess their current living conditions and strive to improve them. If they try anyway, that’s where monopolisation kicks in. Cooperatives and farms are often dependent on a single buyer. The same buyer owns countless other producers in the same country. If a cooperative strikes for better conditions, it is no trouble for the buyer to simply not buy any coffee from it and bring it to its knees economically.
In special cases where more producers, or even all of them in a single country arrange a coordinated move for better conditions, international monopolisation enters the scene. It is no problem for big buyers to just stop buying coffee for one year in a certain country with higher price demands, and move to another one which has no “problems” with producer demands. A circle with no exit.
Can I do anything about it? DEFINITELY YES!
The solution is incredibly simple - all you have to do is buy coffee from companies which build longterm relationships with their suppliers, founded on mutual trust. Together, they can work on improving the producers’ conditions in a win-win scenario.
If, for example, an economical crisis or weather extremes hit the producer, they can find a way out together. Such a producer is also not dependent on a single buyer, but his output is diversified among various types of importers and world markets. That allows him to react to problems with both production and demand with flexibility and improve conditions, thanks to healthy competition.
This is why we only buy coffee from producers whose headquarters are in the countries of origin. They were born there, grew up there and live there with their families. They answer to their fellow countrymen, not supranational corporations from Switzerland, or worse, the Caiman Islands. They pay taxes in their home countries and local people work in their laboratories and offices.
Reforestation and coffee quality come on their own.
The most interesting aspect of this all is that the ever present problems such as deforestation and other negative impacts on the environment, or quality and stability of the agricultural production through the years, improve on their own. That’s because it’s in the producers’ best interest to educate themselves and improve their processes, because they want to answer the demands of their buyers, who in turn answer the ever stricter expectations of end consumers.
For example coffee cultivated in forest-shaded polycultural ecosystems is easier to sell at a higher price. An importer will thus ask his producer about it. And if the producers hears this question independently from a buyer from for example Czechia, Canada and South Korea, he will immediately go out and start planting trees, because it’s simply worth it.
In the same manner, he has no reason to cheat quality or try to save money on it, because he will not want to lose his longterm buyers, who pay him prices significantly higher, than the market or auction average.
It sounds like a cliché, but the shortest way to a better future leads through your own wallet.
We can all see the success of political pressure on Brazilian government and corporations to stop the deforestation of the Amazon rainforest. In contrast, to reforest the 20% of the surface of Minas Gerais which is covered by coffee plantations, all you need is that people only buy shade-grown coffee from Brazil.
That’s not much of an outlandish claim, is it?