Cafés, co-ops, small roasters, and religious groups are fueling the popularity of Fair Trade coffee, which pays small growers a living wage
CAN A CUP of coffee change the world? For embattled small-scale farmers like 28-year-old Carlos Reynoso, whose colleagues cultivate coffee beans in the western highlands of Guatemala, the daily choices of US consumers have a big impact. When most people in the US buy a $3 latte, a cup of java on the go, or a bag of beans at the supermarket, they unsuspectingly support a status quo in which poor growers in Latin America, Asia, and Africa receive as little as 20 or 25 cents for a pound of high-grade coffee. But when consumers buy Fair Trade coffee — which guarantees farmers a minimum price of $1.26 per pound — their spending fosters a variety of positive effects, not the least of which is the ability of these growers to sustain their livelihoods.
As one of six employees of Manos Campesinas, a collective that coordinates coffee exports for more than a thousand small growers, Reynoso has personally seen the impact. Since global coffee prices began plummeting a few years ago, many farmers have been unable to earn enough to support themselves, causing them to abandon the land and search elsewhere for work. Since Manos Campesinas became Fair Trade--certified in 1999, however, the heightened revenue stream has raised the income of farmers, he says, enabling their families to enjoy a better diet and their children to remain in school.
Speaking through a translator during a telephone interview arranged by the nonprofit development agency Oxfam America, Reynoso notes that Fair Trade isn't a panacea for poverty. It does, however, offer some substantial big-picture benefits in a country like Guatemala, which suffered from decades of violence and anti-union activity in the wake of a US-backed coup, in 1954. "Now people are realizing there are benefits to organization, and that if they can work together, they can achieve greater things," Reynoso says. There's still not sufficient demand to sell all the collective's coffee through Fair Trade channels, he adds, "[but] the more that consumers get to know what Fair Trade means, the more possibilities we will have."
Although Fair Trade--certified coffee has been available in the US since only 1986, it is rapidly growing in popularity. TransFair USA, an Oakland, California--based nonprofit that monitors the product, announced this spring that it certified 18.7 million pounds in 2003 — a 91 percent jump from 2002. Equal Exchange, a Canton-based cooperative (soon moving to West Bridgewater) that bills itself as the nation's leading Fair Trade company, has enjoyed enviable growth, topping $10 million in sales and gaining recognition as one of the fastest-growing small firms in the region. Furthermore, although Fair Trade coffee represents only about one percent of the 2.8 billion pounds of coffee imported into the US in 2003 — aiding just a small fraction of the world's 25 million coffee farmers — industry giants like Procter & Gamble, Starbucks, and Dunkin' Donuts have slowly begun to include Fair Trade offerings among their offerings.
It's not hard to see why proponents tend to embrace Fair Trade java with something approaching evangelical zeal. Perhaps like no other product, a cup of this coffee holds the promise of empowering consumers as a force for global good, offering at least a potential counterbalance to unmitigated corporate consolidation and the exploitation of workers in undeveloped nations. With the spread of the Fair Trade approach to other products in recent years, including chocolate, cocoa, tea, bananas, mangoes, pineapples, and grapes, the prospects seem even greater.
For conscientious coffee mavens like Rik Kleinfeldt, the owner of New Harvest Coffee Roasters, in Rumford, Rhode Island, emphasizing Fair Trade beans comes down to doing the right thing. As New Harvest states on its Web site, www.newharvestcoffee.com, "Over the last 200 years, less and less money has gone to the people who actually make things, and more and more wealth has flowed into the coffers of people with soft hands and no shame. The coffee industry is no exception. The people who do the hardest work in making your morning cup possible, the farmers, have long received the smallest share of the proceeds. We want to do all that we can to reverse this reality."
Then again, it's the willingness of people like Kleinfeldt to yield just a bit on the bottom line that explains why religious groups, liberal-leaning universities like Brown, and independently owned cafés and small roasters — rather than the giants of the industry — have fueled the rise of Fair Trade coffee. For a café serving it, the added cost of providing growers better wages comes down to a few pennies, and consumers can find Fair Trade coffee at local supermarkets like Shaw's and Stop & Shop at prices competitive with the conventional stuff. Yet the major industry players, although they generally attribute their reluctance to make a more robust commitment to a lack of consumer demand, seem unwilling to absorb the slightly higher cost of buying Fair Trade coffee.
Given all this, the question becomes whether Fair Trade coffee is destined to remain just a bit player in the multi-billion-dollar coffee market — or whether it's poised to become a greater force for change.
THE PUBLIC IMAGE of the coffee industry is long on caricatures such as Juan Valdez and colorful tales about the elixir's storied past. A history on the Web site of the National Coffee Association of USA (www.ncausa.org), for example, describes how coffee, after first being cultivated in the highlands of Ethiopia, became one of the world's most valuable export crops by the end of the 18th century. Along the way, European opponents condemned the buzz-worthy beverage as the "bitter invention of Satan," although Pope Clement VIII, after being asked to intervene and tasting coffee, saved the day with a papal blessing. And when it comes to the rise of America's unswerving java jones, the NCA attributes the cause to a moment no less important than the Boston Tea Party.
Considering such upbeat anecdotes, it's a safe bet that relatively few Americans are aware of serious problems gripping the global coffee industry in recent years, particularly the extent to which supply has outstripped demand. Summing up the situation in a September 2002 report titled "Mugged: Poverty in Your Coffee Cup," Oxfam warned, "Farmers sell at a heavy loss while branded coffee sells at a hefty profit. The coffee crisis has become a development disaster whose impacts will be felt for a long time." Although the report prescribed a systemic solution to narrow the gap between supply and demand, it also called for paying growers more than their production costs. Ultimately, Oxfam noted, "This is about more than coffee. It is a key element in the global challenge to make trade fair." Indeed, although prices have edged up a bit, the benchmark export price last week for a pound of coffee at the New York Board of Trade was just 66 cents, of which growers receive only a fraction.
The Fair Trade movement came about in response to similar problems with plummeting coffee prices in the late 1980s. TransFair USA traces the roots of this effort to attempts by North American and European churches in the late 1940s to provide relief to refugees and other poor communities by selling their handicrafts in Northern markets. In 1986, the worker-owned co-op Equal Exchange was formed "to create a new approach to trade, one that includes informed consumers, honest and fair trade relationships and cooperative principles." It didn't hurt, of course, that the movement came about as coffee-consuming Americans were becoming more receptive to better beans and organically grown food.
Beyond giving growers a fair price for their products, moreover, Fair Trade produces important secondary social benefits: since most Fair Trade--certified coffee in the US is shade-grown and certified organic, it supports biodiversity, provides shelter for migratory birds, and helps to reduce global warming. Because growers receive a fair price, they are able to avoid shortcuts that sacrifice quality. Besides these positive outcomes, TransFair USA cites communal success stories, including how a coffee co-op in Colombia prevented the cultivation of 1600 acres for illicit drugs, and how another, in Papua New Guinea, invested in a medical team to meet the health-care needs of its isolated rural setting.
Seth Petchers, coffee-program coordinator for Oxfam America, says Fair Trade coffee offers a potent way for companies to show that social responsibility is on their agenda. The product is also of the highest quality, he says, as demonstrated by the fact that Fair Trade farmers in Nicaragua claimed seven of the top 10 spots in a competition sponsored by the development organization TechnoServe. "Given fair resources and the ability to invest in quality products, these farmers are really able to deliver some of the best coffee in the world," Petchers says.
In this combination of premium product, surging popularity, and feel-good outcomes, one might sense a marketing opportunity for the big industry players. After all, as an article in Time indicated in March, Fair Trade sales have tripled over the last three years, now composing 2.5 percent of the specialty-coffee market. For the most part, though, the giants seem to marginalize the significance of Fair Trade coffee even when they incorporate it into their offerings.
Randolph-based Dunkin' Donuts, for example, last year began using Fair Trade coffee beans exclusively in its new line of espresso beverages, but the copious television advertising this summer for the company's iced lattes makes no mention of this. (In response to a request for comment, Ed Valle, Dunkin' Donuts director of brand marketing, says in a statement that Fair Trade beans "meet or exceed two percent of our overall coffee purchasing.... We're excited that with the launch of a new product, we had an opportunity to use Fair Trade beans at 100 percent levels. Right now, we're focused on building demand for that product line, and ensuring a growing and quality supply of Fair Trade coffee beans.")
Starbucks, with almost 4000 shops in the US, has one Fair Trade variety among its whole-bean offerings and periodically offers one Fair Trade brew. (Starbucks officials did not return a call seeking comment.) Procter & Gamble, the maker of Folgers, the leading seller in the US, and the Millstone specialty brand, last year introduced Mountain Moonlight, a Fair Trade--certified coffee, but until its scheduled arrival on store shelves in September, it has been available solely via the Internet.
Tonia Hyatt, a P&G spokeswoman, says that only a relatively small number of coffee growers — about 600,000 of 25 million — benefit from Fair Trade practices, and that industry-wide efforts to narrow the disparity between global supply and demand are more important. P&G has tried to stimulate more sales through new products, she says, while also supporting technical efforts to help farmers, and advocating that the US rejoin the international coffee organization. When it comes to Fair Trade coffee, Hyatt says, "The consumer, in the end, decides how much we sell."
Of course, some of these big players have another reason to avoid a fuller embrace of Fair Trade coffee. As Oxfam's 2002 report noted, "The big four coffee roasters — Kraft, Nestlé, Procter & Gamble, and Sara Lee — each have coffee brands worth US $1 billion or more in annual sales. Together with German giant Tchibo, they buy almost half the world's coffee beans each year. Profit margins are high — Nestlé has made an estimated 26 percent profit margin on instant coffee. Sara Lee's coffee profits are estimated to be nearly 17 percent — a very high figure compared with other food and drink brands. If everyone in the supply chain were benefiting this would not matter. As it is, with farmers getting a price that is below the costs of production, the companies' booming business is being paid for by some of the poorest people in the world."
In some instances, American industry induces demand for products, arguably in ways contrary to the public interest. Gun manufacturers, for example, reversed slumping sales through the introduction of semiautomatic weapons, like the 9mm pistol, which became an icon of the subsequent crack-fueled crime wave of the late 1980s. Similarly, carmakers' introduction of sport-utility vehicles helped to wipe out the gains in fuel economy achieved after the mid-'70s oil crisis. When it comes to Fair Trade coffee, though, it's the small players — cafés, co-ops, roasters, and religious groups — who have propelled the growing popularity of this socially responsible product.
AS THE OWNER of a small East Providence, Rhode Island, coffee-roasting company with four employees, Rik Kleinfeldt is familiar with the Catch-22 surrounding Fair Trade coffee: it's easy to find through cafés, markets, and other sources for those who seek it, yet largely invisible to the great majority of other consumers.
"It is very frustrating in the sense that most people will express sympathy for the farmers' plight," Kleinfeldt says, but don't put their money were their mouth is. "To me, it's difficult, if not impossible, to reach the person who buys Folgers and Maxwell House," even though New Harvest's $8.50 online price for a pound of organic Fair Trade is competitive with what Starbucks charges for a 12-ounce package of the non--Fair Trade stuff.
So it goes, cup for cup, and pound for pound, as Fair Trade proponents try to get their message out. More ham-fisted efforts — like an unsuccessful attempt a few years back to require coffee sellers in Berkeley, California, to sell only Fair Trade, organic, or shade-grown coffee — are ineffective by comparison. And although some other roasters around New England — including Dean's Beans, in Orange; Green Mountain Coffee, in Waterbury, Vermont; and Ocean Coffee Roasters, in Middletown, Rhode Island — lean toward Fair Trade beans, these seem like the exception, rather than the rule.
Kleinfeldt, a 38-year-old Ohio native, is a confirmed java junkie — he typically drinks eight cups a day, including four espressos, without getting jangly. As someone who came to Providence to pursue a PhD in history at Brown, roasting coffee is a way of following his bliss while also practicing socially responsible business practices. After working for a decade at the Coffee Exchange — itself a strong local supporter of Fair Trade coffee — Kleinfeldt started New Harvest with his wife, in 2000. The company's Rhode Island clients now include Olga's Cup and Saucer, White Electric Coffee, Pastiche Fine Desserts, Seven Stars Bakery, Whole Foods Market, and AS220, all in Providence; Bristol Bakery, in Bristol; the Coffee Depot, in Warren; Village Hearth, in Jamestown; and the Revival House, in Westerly. Its list of out-of-state customers is also growing. Fair Trade coffee constitutes two-thirds of New Harvest's sales, and the company's logo — showing a strong hand grasping a coffee plant — sums up its populist philosophy.
As New Harvest notes on its Web site, "Some people — maybe most — dismiss things like Fair Trade coffee as 'politically correct.' We find this perplexing. Most people, in this country and elsewhere, have to work for a living. Most Americans have little in common with the people at the top of the corporate ladder. Their wealth is really unimaginable to most of us, and grossly excessive. By buying non-Fair Trade coffee, you cast your lot with them, to the detriment of coffee farmers on the brink of starvation."
Like New Harvest, Equal Exchange has enjoyed the kind of growth that would please even the most bottom-line-oriented businessman, yet the worker-owned company remains unabashedly left of center. "Our mission is not profit-maximizing," says organizing director Virginia Berman. "We make profits and employ 75 people on wages they can live on in Greater Boston and enjoy a great quality of life. We're not about multi-million-dollar salaries," since the co-op's top-paid people earn no more than three times the income of its lowest-paid workers.
Among other efforts, Equal Exchange has been a leader in working with religious organizations to promote the use of Fair Trade coffee. In one such case, Catholic Relief Services unveiled an effort in January designed to raise sales of Fair Trade coffee among the 65 million Catholics in the US.
Berman acknowledges that efforts to raise awareness about Fair Trade remain at a very early stage. Like most Fair Trade boosters, though, she holds out hope that this brand of feel-good coffee — and its underlying philosophy — will continue to grow in popularity. "Most people in the US want to do the right thing," Berman says, "and when given a choice, it has been our experience that consumers would prefer the product that's going to treat someone [at the source] with dignity."
Encouraging more people to become critical consumers poses a major challenge in the US, where shopping represents something akin to a state religion. Even without taking into account its numerous tangible positive effects, however, Fair Trade coffee offers a different way of doing things.