Contents
Should You Serve Fair Trade Coffee?
For many consumers and small business owners in the U.S. and western Europe, the knowledge that people producing their coffee usually struggle from poverty, in rural areas, and vulnerable to exploitative practices by powerful middlemen who give them prices below market value, is disturbing.
People in the western world wonder, is there a solution? We want this product, but we don’t want it at the expense of someone else. Farm work is hard, and the people that make it happen should be able to get a fair shake of the booming international coffee business.
Owning and running a coffee shop is hard work too, and if you’re a small conscientious business owner, it’s natural that you’ll have questions. We’ve compiled some helpful tips on this subject that you can find here. But what about the coffee itself?
In a global market where buyers and sellers of coffee are often half a world away from those who grow and maintain the plants, what are the worker’s lives like? Are the working conditions safe, are they getting a wage that reflects their contribution? What about the farms, are they environmentally friendly, and are they using green and sustainable methods?
What is fair trade coffee?
The fair trade movement arose as a possible way to address these concerns. Since its inception, there has been controversy over the efficacy, practices, and costs associated with the fair trade label. Simply put, “fair trade” typically refers to the movement or principles of providing fair wages and labor practices in international trade. To better understand the details of many of those principles, you can find an in-depth charter here.
The terms “fair trade certified” or “fair trade certification” are related to a certification by either FLO (Fairtrade Labeling Organization International, also called Fairtrade International) or Fair Trade USA, two nonprofits who impose regulatory requirements related to safe labor practices, wages, and environmental impacts on farms and plantations around the world (specifically Africa, Asia, Latin America, the Caribbean, and Oceania) in exchange for the fair trade label.
Certification began in 1997, as a concrete way to ensure that fair trade certified (FTC) label on a product meant that a series of milestones had been met, and a socially conscious consumer could rest easy with their purchase.
After having met these requirements, anything labeled fair trade has a “price floor,” meaning that FTC coffee will never fall below a certain price (currently $1.40 USD per pound), despite changes in the market.
Interestingly, these two organizations—FLO and Fair Trade USA—used to work together, but parted ways in 2011. You can read more about the separation here, but they had a difference of opinion about which methods would best serve their intended beneficiaries.
The subject of which methods are the most effective and efficient is controversial, and this is a big part of the ongoing conversation about finding ethically sourced coffee and how fair trade certified coffee fits into the larger picture.
Now that you have an overall understanding of what the fair trade movement and fair trade certification are, let’s explore what this means if you are a business owner considering buying and serving fair trade certified coffee, or finding ethically sourced coffee in general.
The pros and cons of fair trade coffee
Pros:
Keeps grievous violations at bay. The certification process that began in 1997 ensures that some of the worst labor and environmental violations—such as unsafe working conditions—will not be happening.
The label has brand recognition. Fair trade coffee is a popular concept that most people have heard of and it will send a message that your business cares about the environment and the lives of the people who produce your coffee.
Meets the demand of the socially-conscious consumer. Fair trade certified coffee appeals to the socially-conscious consumer who is aware of certifications like USDA organic and fair trade.
Cons:
There is a small pool to choose from. Fair trade coffee only accounts for two percent of total production, which means there are limited options.
Sometimes, a higher cost. Retailers pay 10 cents to fair trade USA for every pound of fair trade coffee sold in the U.S. In addition, purchasers pay a subsidy of twenty cents per pound that does not go directly to the farms but instead retained by the cooperatives the farms belong to.
Certification can be prohibitive. FLO and Fair Trade USA regulations can be a hurdle for a variety of reasons, not the least being that the necessary documentation can be challenging for some farmers.
Controversial impact. Critics argue that fair trade standards focus more on the incomes of producers rather than wage workers’ earnings. Additionally, large companies are essentially excluded from being certified as fair trade, regardless of their socially or environmentally responsible practices.
How you can find ethically sourced coffee
With so many conflicting perspectives, what’s the take away? If you are a business that wants to be socially and environmentally responsible, or an individual consumer with the same concerns, you can find coffee that is grown sustainably and supports those who work to bring it to you.
Here are some tips on vetting your coffee provider:
Talk to friends. If you’re opening a coffee shop, reach out to those in the industry who might serve coffee from a company that shares your values.
Visit the farms first hand. If feasible, take a trip to see the conditions of production.
Get references. Ask the producer for references from past companies they’ve worked with.
Thorough internet search. Do a comprehensive search for information, including reviews and details about the labor and environmental conditions of production.
Go your own way
When it comes to deciding what kind of coffee to serve in your business, consider the advice from industry professionals:
Decide based on what your customers will value and pay a premium for.
Many companies strive for socially and environmentally conscious practices without exclusively dealing in fair trade products.
Ultimately, the decision is personal and depends on what aligns with your values and goals.
Do you serve certified coffee? Why or why not? Share your thoughts and experiences!
More information to help you start and run your coffee shop.
Hello!
I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
My career is built on a foundation of helping individuals and businesses thrive financially in an ever-changing economic landscape. At phonenumber247.com, my aim is to demystify the complex world of finance, providing clear, actionable advice that can help you navigate your financial journey with confidence. Whether it’s personal finance management, investment strategies, or understanding the nuances of market dynamics, I’m here to share insights and tools that can propel you towards your financial goals.
Welcome to my digital space, where every piece of advice is a step closer to financial clarity and success!