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Faring for Fairer Trade – PART 1

December 21, 2009

Coffee beans before and after being roasted. Photo credit: cgfan via Flickr

For Geoff Watts, the choice was clear: if your needs aren’t being met you either have to take control or just go with the flow.  But what do you do when you run a business and you aren’t able to gain the control of your product you need?

Simply, you find a way and make it happen.

Watts is a Vice President with the coffee company Intelligentsia based in Chicago. With two stores in California and three in the Chicago area, Intelligentsia is continuing its expansion into markets such as New York, Vancover, Toronto, and Atlanta among others. Roasting just about two million pounds of coffee, Intelligentsia isn’t the 800 million pound gorilla in the room, but they sure are trying to revolutionize the way the coffee business is run.

In short, Intelligentsia is getting what it wants by skipping over most of the middlemen that typically get in the way. In doing so, they get the high-quality coffee they require while freeing up the flow of information throughout the supply chain and establishing an atmosphere with the incentives and stability coffee farmers need.

If you enjoy coffee, if you seek out Fair Trade coffee, you may be surprised to learn that there’s an alternative to brewing your progressive cup of coffee called “Direct Trade.”

BACKGROUND

Coffee is a multi-billion dollar a year business. After oil, it is the world’s most commonly traded commodity.  And while most Americans grew up smelling either Sanka, Maxwell House, or Folger’s waft through their kitchens, it was in the early- to mid-nineties when coffee became less of a tool to wake up in the morning and more of something… cool. The counter-culture used coffee houses to organize and create a community. The yuppies sought out their own Central Perk to become like Ross and Rachel. And it was in that timeframe, 1995 to be precise, when Intelligentsia started out as a single coffee shop in the Lakeview neighborhood of Chicago’s north side.

“Essentially when we started,” Watts explained over the phone, “We were buying coffee the same way most people purchase – through importing companies and traders in the US. But as a coffee roaster, you’re kind of stuck a little bit starting out because you’re buying from someone’s offer sheet.”

Watts likened it to going through a warehouse where you have fifteen options to choose from but you have no ability to impact what the producer has been paid or how the coffee was grown. For a company that is “relentless if not reckless about quality,” this presents a major problem: how can you control for quality when the sources for your product are too regimented?

“We got a little frustrated by that,” Watts said, “I would say most of the time there’s a big lack of transparency in those purchases.”

Then in the late nineties, the concept of Fair Trade came around; presenting an alternative.

WHAT YOU DRINK, MATTERS

Fair Trade (FT) s a certification system run by a number of international organizations that guarantees a minimum price to the producers of the goods being sold. Most known for its coffee program, the FT “movement” has gone to great lengths to market the Fair Trade brand to the general consumers.

The principles of Fair Trade include fair prices (minimum floor price for farmers), fair labor conditions (workers on farm must be safe, paid decently, not be children, and be able to organize), direct trade (importers try to eliminate the middlemen as much as possible), transparency, environmental sustainability, and community development.

The idea is that some consumers are willing to pay a premium for coffee that is certified Fair Trade in order to align their purchases with their values. The cost for FT coffee is minimal for the American consumer, but is designed to have a larger impact up the supply chain to the original producer.

A key point, however, is that Fair Trade coffee is not concerned with quality. You can have low-grade coffee that is FT certified – every consumer is different and has different quality needs, after all. However, if it’s FT certified, it should conform to the principles above.

NEXT ARTICLE: THE SHORTFALLS WITH SOME CERTIFICATION BODIES

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The writer is the editor of CitizenPolity.com —  You can contact him at JamesERatcitizenpolitydotcom or follow him on Twitter:http://twitter.com/jepsteinreeves

Copyright 2009 – CitizenPolity & James Epstein-Reeves – Not to be used without the written permission of CitizenPolity or the author.

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