Fair Trade Coffee: The Background To The Success Story

Whether for breakfast, after lunch or with cake: Very few people want to go without a cup of coffee. The beans should be aromatic, not overpriced and preferably fair trade. Fair trade coffee is a model for success – even if it only swims in every twentieth cup.

“Brotherhood drink!” With this slogan, Gepa – today the largest company in Europe that trades in fair products – advertised their first “solidarity coffee” from Nicaragua in the 1970s. It took some getting used to, but was a hit in the communities and shared flats. Fortunately, the time of the bitter Sandino drone is over.

Today, Gepa prefers to advertise with quality instead of socialist solidarity: the range now includes more than 50 types of coffee, the majority of which now also bear the EU organic seal. The individual products are also up to modern standards: in addition to classic coffee blends, there are espressos, organic coffee pods and even the disreputable coffee capsules – which of course are not made of plastic or aluminum here, but of bio-based raw materials.

Fair trade coffee: Often cheaper than conventional

And the price? A cup of fair trade coffee costs just pennies more than its “unfair” alternative. Or sometimes significantly less: the discounter Aldi charges around 9.50 euros for a kilo of fair organic beans, while top dog Tchibo costs at least 12 euros for a kilo of crema beans – and that without an organic or fair trade seal.

It’s no wonder that Germans like to buy it with a clear conscience: with a 32 percent share of total sales, according to the Forum Fairer Handel, coffee is still the most important driving force on the market for fair products; Tea, on the other hand, only achieves a meager 2.3 percent.

Coffee – the second most important raw material in the world

In commodities trading, the importance of coffee has always been immense: only crude oil is traded on an even larger scale by value. “Robusta and Arabica are the true black gold,” writes Die Welt aptly. More than 25 million people worldwide are employed in the cultivation of coffee, three quarters of them live and work in smallholder structures. If you add up the annual harvests of all growing countries, then, according to the German Coffee Association, there are around 167 million sacks of green coffee each weighing 60 kilograms, the equivalent of around 10 million tons of coffee beans. 70 percent of it is exported from the growing countries. In 2019 alone, 1.1 million tons of raw coffee went to Germany, which in turn is the largest exporter of processed coffee products.

The largest coffee producer worldwide is Brazil with around 37 percent of annual green coffee production, followed by Vietnam with 18 percent and Colombia with 8 percent. Typical coffee countries such as Nicaragua, Guatemala or Ethiopia, on the other hand, each contribute less than 5 percent.

Fairtrade coffee guarantees minimum prices

Important importers of fair trade coffee are the organizations Gepa, El Puente and Weltpartner. You face a few multinationals, including Nestlé, which dominate much of the coffee market. Gepa and Co., on the other hand, maintain long-term business relationships with their producers and only support small farmers. In addition to transparency and verifiability, this naturally includes minimum prices and special fair trade surcharges that farmers receive for their coffee.

In addition, if necessary, harvests can be pre-financed by the fair trade organizations. If the world market price rises above the fixed minimum price, the producers are paid the higher price. This, according to the calculation, ensures that the coffee farmers are protected against possible price slumps, but also do not go away empty-handed if world market prices suddenly rise.

Fairtrade certified coffee

The TransFair association, which awards the well-known blue-green-black Fairtrade seal in Germany, takes a different, product-related approach. In this way, products from conventional companies can also be labeled as fair, provided they comply with certain standards. In order to receive the Fairtrade seal, producers must be guaranteed a minimum price plus premium, for example, and farmers receive an additional surcharge for organically grown coffee.

The standards to be met are set by Fairtrade International, an umbrella organization for fair trade based in Bonn. Around 350 coffee products with the established seal can now be found in supermarkets, organic and world shops, but also at discounters and drugstores.

Of course, the system with the Fairtrade seals is also criticized. Studies a few years ago came to the conclusion that the economic advantages for the farmers were being eaten up again by the high certification costs. Fairtrade defended itself by referring to its own documents.

Fair trade coffee is a success

Despite critical voices, no one denies that fair trade in the coffee segment is a success story – even if it may not always be entirely clear who benefits most from it. The farmers who get better wages? The manufacturer who can set the price higher? The certifiers? Or even the consumer who buys a clear conscience for little money? In the best case, everyone wins.

At least Gepa has negotiated prices with its contractual partners that are on average above the minimum price that Fairtrade International requires as a condition for receiving a Fairtrade seal. In many cases, Gepa also pays its own quality and country surcharges – a publicly accessible sample calculation from 2017 shows how the Gepa price for coffee is made up (in contrast to other calculations).

Fair trade coffee: These seals provide security

The seals of El Puente, Fairtrade, Gepa, Naturland Fair and Weltpartner give consumers the security of being able to drink their coffee with a clear conscience. However, they are not the only labels on the market. It’s worth staying informed, because: The term “fair” is – in contrast to the term “organic” – not legally protected.

Nevertheless, according to “Forum Fairer Handel”, every twentieth cup of coffee that is drunk in Germany is already a fair trade product. Few areas are in a better position: the proportion of fair bananas in Germany, for example, is already 14 percent.

Anyone who compares the packages with coffee beans in the supermarket will also discover the Rainforest Alliance Certified and UTZ Certified labels. The latter is a sustainability program for coffee, cocoa and tea, which is used in particular by companies that require large quantities of raw materials.

Both the Rainforest Alliance and UTZ set standards for social and ecological criteria, some of which go beyond the minimum legal requirements. However, they do not guarantee any minimum prices, and pre-financing – a fundamental instrument for fair trade – is not part of the award conditions.

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Written by Allison Turner

I am a Registered Dietitian with 7+ years of experience in supporting many facets of nutrition, including but not limited to nutrition communications, nutrition marketing, content creation, corporate wellness, clinical nutrition, food service, community nutrition, and food and beverage development. I provide relevant, on-trend, and science-based expertise on a wide range of nutrition topics such as nutrition content development, recipe development and analysis, new product launch execution, food and nutrition media relations, and serve as a nutrition expert on behalf of a brand.

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