!8: Capresso 565 Guide: October 2011

!±8± What is Sustainable Coffee and How Does it Affect My Wake Cup?

Gourmet coffee lovers have been seeing a few new terms in the
local premium coffee shop as they file past the seasonal retail
displays of roasted whole bean bagged coffees. Phrases include
eco-friendly, organic, shade grown, fair trade and certified
sustainable. Most often those beans seem to the casual buyer to
be simply more expensive than the corporate mega-brands.

But these few phrases represent far more than at first glance,
including economic and social gains for the growing regions and
farmers, harvesters and processors of green coffee beans at the
local level. Sustainable coffee means premium prices and quality
coffee due to organic farming practices, fair market payment for
beans to local growers and quality controls being adopted by the
"certified" coffee brands.

Those premium coffee prices reflect growing concerns worldwide
of paying fair wages to growers, using more expensive
ecologically friendly organic farming practices, better pay for
traditionally underpaid harvesters and processing workers and
strict quality controls being adopted for "certified sustainable
coffees."

Daniele Giovannucci consults with governments, international
agencies, and businesses on coffee markets and production
strategies to improve competitiveness and support innovative
environmental and rural poverty reduction work. Giovannucci has
authored exhaustive studies, including the 2003, "The State of
Sustainable Coffee Report - A Study of Twelve Major Markets."

http://www.cec.org/files/PDF/ECONOMY/CoffeeSurvey_EN.pdf

This study discusses coffee market forces in Europe and Japan
and the growth of sustainable coffee around the world,
estimating that fair trade, organic, and eco-friendly coffees
represent less than 2 percent of coffee consumption in developed
markets.

Another Giovannucci authored study, "Sustainable Coffee Survey
of the North American Specialty Coffee Industry," he estimates
the Global market for sustainable coffee to be approximately
5 million retail for over a million 60 kilo (about 132
pounds) bags of green coffee beans.

http://www.eftafairtrade.org/Document.asp?DocID=391&tod=21534

It is estimated that growers of certified sustainable coffees
can nearly double their income from otherwise depressed coffee
prices. So economically challenged third world countries see
small farmers adopting organic growing techniques as a ticket
out of poverty and subsistence. Corporate buyers are attracted
to sustainable growers by consumer goodwill and health concerns
related to those organically grown coffees. This leads to
dubious claims by some of the corporate coffee representatives
and has lead to the need for certification authorities.

One group, Fairtrade Labeling Organizations International (FLO)
has been active in monitoring and certifying, auditing and
verifying standards for sustainable coffees. Another, named
Transfair USA, carries on similar activities in the American
coffee market. Consumers are justifiably confused when many
terms are applied to sustainable coffees and fail to
differentiate between organic, eco-friendly, fair trade and
sustainable terms.

Premium prices are sometimes supported by certification,
labeling and monitoring by third-party organizations and
sometimes by local governments such as the "Jamaica Coffee
Industry Board." But some labeling is simply slick sales and PR
by greedy corporations seeking premium prices for average coffee
beans, so support for labeling initiatives and independent
certification is growing.

Fair Trade and sustainable coffees are seeing increasing
production in Central and South American growing regions, most
notably in Mexico and Peru. Columbia has seen some pressure and
attempts to divert production of cocaine with coffee crops for
the fair trade market with little major success to report so
far. Uganda, Tanzania and Ethiopia are big participants in
sustainable coffees in Africa while East Timor, India and
Indonesia are major supporters of sustainable coffee in Asia.

With the North American coffee market dominated by multinational
giants Sara Lee, Kraft and Procter & Gamble, little interest has
been shown in adopting sustainable coffee by major corporate
coffee producers. Meanwhile, Brazil and Vietnam, the world's No.
1 and No. 2 coffee producers, respectively are flooding the
market with poor quality beans and driving down coffee prices.

But major grocery chains are seeing demand for sustainable
coffee and may adopt fair trade and organic coffees to sell
nationwide at Safeway, Kroger and Albertson's stores. Increases
in availability, demand and awareness of sustainable coffee are
leading to more of the same in a spiraling increase for fair
trade organic and shade coffees in premium markets. Some
sustainable coffees are even finding their way into instant
coffees, but the vast majority of the sustainable market is in
premium and specialty markets.