Micro Mills, Specialty Coffee and Relationships

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Micro Mills, Specialty Coffee and Relationships Micro mills, specialty coffee and relationships Following the supply chain from Costa Rica to Norway Benedicte Gyllensten Master thesis in Culture, Environment and Sustainability Centre for Development and Environment UNIVERSITY OF OSLO June 2017 II © Benedicte Gyllensten June 2017 Micro mills, specialty coffee and relationships. Following the supply chain from Costa Rica to Norway. http://www.duo.uio.no/ Print: Reprosentralen, University of Oslo III Abstract 2.25 billion cups of coffee are consumed every single day, and an increasing amount of this is specialty coffee. The third wave of coffee focuses on quality, taste and variety and consumers demand socially responsible coffee, but despite many initiatives to return more value to producers, most of the world’s coffee producers still struggle to make a living. The majority of the value of a cup of coffee is created and remains in consuming countries. This thesis looks at the phenomenon of micro mills in Costa Rica, which started as a reaction to the coffee crisis in the early 2000s. Since then, around 150 micro mills have popped up around the country, run by small-scale coffee producers. These are aimed at the specialty coffee industry, which demands high-quality coffee and transparency in the supply chain. This thesis is based on interviews and participant observation with coffee producers, exporters, importers, roasters and other members of the coffee industry. Data has been collected in Costa Rica and Norway by using qualitative research methods. Three different case studies that follow the supply chain of coffee all the way from Costa Rica to Norway are used to illustrate what effects micro mills have on the lives of coffee producers and what they mean to other actors in the industry. This thesis asks the questions ‘How have micro mills affected the lives of small-scale coffee producers in Costa Rica?’ and ‘How can micro mills enable participation in the specialty coffee segment and how can this benefit producers?’ It concludes that in most cases, micro mills lead to higher prices and higher economic sustainability for producers, in addition to other intangible benefits. It discusses how micro mills allow producers to aspire to something more and move forward in their search for the good life. It also examines micro mills in the larger context of specialty coffee, looking at four different aspects; quality, direct trade, relationships and symbolic value. It concludes that micro mills control a larger part of the supply chain, but still meet some challenges in terms of transparency and power. It shows that producers appreciate more direct long-relationships with buyers, that quality is the most important criteria and that micro mills add value to the coffee. It also concludes that micro mills are a positive alternative for producers who want to enter the specialty coffee segment of the market. IV Acknowledgements ¡Muchísimas gracias a todas las personas que me ayudaron con mi trabajo durante mi estancia en Costa Rica! Gracias por compartir su trabajo, sus sueños, sus historias y su vida conmigo y por todo lo que me enseñaron sobre el café. Gracias por producir un café tan delicioso, la vida no sería lo mismo sin él. Thank you everyone in Norway for taking time out of your busy day to talk to me, and to Melanie Leeson and Blas Alfaro for helping me with contacts in Costa Rica. Thank you to all the people I have met along the way, for your encouragement, curiosity and for sharing your interest in coffee with me. Thank you to my supervisor Mariel Aguilar Støen for all your guidance and feedback and to SUM’s amazing student advisors Gudrun and Anne-Line for being a constant source of encouragement and help through these last two years. Thank you to all my fellow students at SUM, for riding this rollercoaster with me. Thank you for the endless discussions, soup suppers, long lunches, Pomodoro sessions and parties. Thank you for being there through ups and downs, excitement and frustration. Takk til mine venner for at dere ikke glemmer meg når jeg er ute på tur og for at dere orker å høre på min evige kaffeprat. Takk for at dere alltid stilte opp da jeg trengte distraksjon fra oppgaven. Tusen takk til mamma, pappa og Eirik for at dere alltid støtter meg, uansett hvilken vei jeg velger i livet. Takk for at dere ikke stopper meg, selv når mine drømmer bringer meg ut på stadig nye og ”skumle” eventyr. V Table of contents 1 Introduction ............................................................................................................... 1 1.1 The problem ...................................................................................................... 1 1.2 My motivation ................................................................................................... 1 1.3 Costa Rica ......................................................................................................... 2 1.4 Micro mills ........................................................................................................ 3 1.5 Research questions ............................................................................................ 3 1.6 Objectives of the study ...................................................................................... 4 1.7 Structure ............................................................................................................ 4 2 Background ............................................................................................................... 5 2.1 The global coffee industry ................................................................................ 5 2.2 Inequality and power in the supply chain ......................................................... 7 2.3 The coffee industry in Costa Rica ................................................................... 11 2.4 The three waves of coffee consumption ......................................................... 15 2.5 Specialty coffee ............................................................................................... 18 2.6 The good life: aspiring to something more ..................................................... 27 3 Methodology ........................................................................................................... 30 3.1 Collecting and analyzing data ......................................................................... 31 3.1.1 Field work ............................................................................................... 31 3.1.2 Interviews ................................................................................................ 35 3.1.3 Participant observation ............................................................................ 38 3.1.4 Data analysis ........................................................................................... 40 3.1.5 Reliability and validity ............................................................................ 41 3.1.6 Triangulation ........................................................................................... 42 3.2 Limitations ...................................................................................................... 42 3.3 My role as a researcher ................................................................................... 43 3.4 Ethical considerations and dilemmas .............................................................. 44 3.4.1 Informed consent .................................................................................... 44 3.4.2 Anonymity .............................................................................................. 45 4 How have micro mills affected the lives of small-scale coffee producers in Costa Rica? ............................................................................................................................... 46 4.1 Economic sustainability .................................................................................. 46 VI 4.2 Intangible benefits ........................................................................................... 50 4.2.1 Taking back control at La Angostura ...................................................... 50 4.2.2 Aspiration and opportunity ..................................................................... 53 4.2.3 Dignity and fairness ................................................................................ 55 4.2.4 Commitment to a larger purpose ............................................................. 56 4.3 Is it worth it? ................................................................................................... 57 5 How can micro mills enable participation in the specialty coffee segment and how can this benefit producers? .............................................................................................. 60 5.1 Direct trade and transparency ......................................................................... 60 5.1.1 Jardín de Aromas .................................................................................... 61 5.1.2 Kaffebrenneriet ....................................................................................... 63 5.2 Relationships across the supply chain ............................................................. 66 5.2.1 Don Eli .................................................................................................... 67 5.2.2 La Angostura ........................................................................................... 70 5.2.3 The importer ...........................................................................................
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