Page 1 J U L Y . 2 0 2 0 | V O L . 8 SOMETHING'S BREWING T R A D E N E W S , I N S I G H T A N D C O M M E N T F R O M T H E B E V E R A G E S T A N D A R D S A S S O C I A T I O N www.beveragestandardsassociation.co.uk OTHER STORIES INSIDE THIS Welcome New Members ISSUE: The last month has seen a number of new businesses joining the Beverage Standards Association. We are delighted to welcome: Bean & Leaf Coffee House, Coventry; Cole Cafe & Deli, Sunderland; Common The Pursuit of Truly Ground Coffee, Altrincham; Cork Coffee Roasters, Ethical Coffee Cork; Courtyard Coffee Roasters, Eccleshall; Este Kitchen, Bristol; Fire & Flow Coffee, Cheltenham; Grasshopper Café, Hope Valley; Grind & Will Cafe Culture Change Tamp, Ramsbottom; Hatter Coffee Co, Donegal; Kings After COVID? Coffee & Books, Dumfries; Loumidis Antonis, Athens; Loumidis Coffee Shops, Athens; Marmadukes Coffee Shop, Sheffield; Mr Espresso Coffee Company, BWT Flexing With Their Athinas; North Star Coffee Roasters, Leeds; ROUND App, Brighton; Salt Media, Barnstable; Speyside Coffee Besthead Roasting Co, Fochabers; Star Anise Café, Stroud; The Buffet Box Café, Cumbernauld; The Coffee Consultancy, Eat Out to Help Out Bicester; The Coffee Dispensary, Cheltenham; The Copper Lab Coffee, Banbridge; Urban Ground, Eastbourne and Wired Coffee and Cake, Huddersfield. Calling All Roasters P a g e Page 2 www.beveragestandardsassociation.co.uk J U L Y . 2 0 2 0 | V O L . 8 Historically, the coffee supply chain has The Pursuit of Truly Ethical been long and complex with a number of Coffee people involved working in systems that were often put in place during colonialism or just after independence. These systems Written by Holly Kragiopoulos from North Star were created to continue passing value to Coffee the consumer as opposed to the producer and are answerable for the existing What is Ethical Coffee? manner in which coffee is traded. Despite huge growth and interest in responsible consumer habits, it seems that now more than ever we have greater Before I talk about what we deem to be confusion about what this phrase really means. Given the ethical procurement, it seems important to rise of various certification schemes and approaches along first discuss how we have reached this with the complexities of true sustainability, this is totally point in our industry to understand the understandable.There is a problem with this though when different options on offer. This is consumers end up standing by certain certification particularly relevant given the appalling schemes or logos, when in many cases these systems do state of the world coffee market (the ‘C’ not work for the coffee producer and they may benefit market) in the past 12 months which has more from a different approach. My own dissertation at valued coffee using a figure that would not university along with a recent article published by The have been out of place 50 years ago. Guardian discussed this very possibility in regard to the Coffee is traded in US cents per lb, some impact of Fairtrade on the rural poor. of the costs I have seen involved in producing coffee can be up at around With coffee shop culture in the UK doubling over the past decade (Allegra Strategies 2017) versus a decline in the $1.80/lb – over the last 12 months, we number of producers growing coffee, it seems vital to me have seen it hovering around $1.00/lb and that we all understand the many factors that need to be at the time of writing, it is now at $0.90c/lb taken into account to help guarantee the longevity of our which is the lowest price we have seen in industry. 12 years. Page 3 www.beveragestandardsassociation.co.uk J U L Y . 2 0 2 0 | V O L . 8 Excessive rainfall, drought and a rise in pests and disease have impacted recent harvests dramatically which increase the costs of production even further. We cannot continue to benchmark the prices we pay for coffee against the prices we paid 20-30 years ago. Looking beyond the question of whether or not it is specialty grade, this price is not even adapted to take into account inflation and increased costs of farming inputs. This mechanism continues to prioritise the buyer and not the producer and it is not in keeping with the principles of sustainability. Times are changing and it is time our approach to coffee procurement did too on a global The ‘C’ market was established in 1882 and in the 20th century, it was adapted scale if we still want to be buying coffee 20-30 years to stabilise prices to assist with and enable the growth of corporate global down the line. brands such as Nestle and Douwe Egberts. It is a market that operates much like any other stock market and is based on supply and demand allowing speculators to buy and sell contracts depending on which way it will go. What is often underestimated here is the staggering impact this can have on the lives of millions of coffee farmers. The world coffee crisis of the late 90s and early 2000s was proof of just how unfair this mechanism is, so much so that it is pretty unbelievable it is still in place in 2019 given the human cost of such low market levels. Like any business, coffee farming is dependent on the costs of production being met with a profit generated to be able to reinvest in the next harvest or in the farming infrastructure. This simply does not happen when the global market starts to freefall to current levels that fall way below the costs involved in producing the coffee, let alone the level needed to produce any profit. The C Market isn't Working Presently, the C market is not working for coffee producers and is resulting in abandonment of farms in favour of more profitable crops such as maize and commonly heroin or coca. Commercial grade coffee is generally purchased using this mechanism and ensures that companies are able to buy low and sell high at the detriment of the millions of smallholder farmers and their families across the globe. Further volatility in coffee production exists due to the growing impact of climate change which is really starting to make its presence felt in most coffee growing regions that sit between the Tropics. "Presently, the Coffee Market is not working for coffee producers and is resulting in abandonment of farms in favour of more profitable crops such as, maize and commonaly heroin or coca'' Page 4 www.beveragestandardsassociation.co.uk J U L Y . 2 0 2 0 | V O L . 8 How does this system relate to the coffee bought and sold by North Star? The global industry is split into coffee that is either specialty or non-specialty (commercial). Specialty grade coffee makes up just 4- 5% of total production and it requires very specific growing conditions and approaches to attain this quality. The literal definition of specialty grade coffee is coffee that has scored over 80 out of 100 on the SCAA (Specialty Coffee Association of America) cupping form for attributes such as flavour, body, acidity, aftertaste, balance, uniformity, cleanliness and sweetness. This definition means specialty grade coffee is analysed purely on its cup qualities and cleanliness of the raw product. There is no specification on how it must be produced when it comes to social and environmental responsibility and there is no instruction on how it should be priced and purchased. The result of this is that a coffee can be classed as specialty grade and still be produced in a manner that does not respect the people or environment growing it, or purchased in a manner that does not recognise its true value exploiting the producer. It is not enough to just purchase specialty grade coffee and assume that ethics have been a vital part of this transaction, it is sadly more complex than that. For all of the coffees we purchase, we set an outright price that is totally divorced from the global C market. This presents complications in terms of determining a starting point but it allows the price paid to be dictated by the potential cup quality presented by the coffee in terms of what we can sell for. The starting point has to be to review the costs of production (which are not fixed and slide year on year dependent on yield/factors at play in each producing region) and then to include a margin that represents the quality of the coffee and allows coffee farming to be profitable for the producer. In many cases, this profit is needed to provide the basics for living such as healthcare, food and shelter – let alone education or re-investment back into the farm. The trips we make to visit our producing partners are vital in having these conversations and in getting to grips with their costs and challenges. This system ensures that we are able to work directly with coffee producers and exporters to maintain real transparency and trust, enabling us to forge lasting relationships to have a truly positive impact in our business practices. Paying an outright price is just the start though, depending on the type of producer this can either be a smallholder farmer operating individually or as part of a cooperative or it can be direct to an estate owner who is then employing 300-500 pickers as a migratory workforce during the harvest season.