Supporting Sustainability and Fair Pay in Green Coffee Amidst a Global Economic Downturn
By Stuart Ritson, Specialty Coffee Consultant
“While the Great Depression did little for the average American wallet, it was actually something of a boost for the coffee industry, if not in terms of quality at least in terms of quantity of cups sold. As the clamps came down on spending and unemployment … skyrocketed, coffee became more and more important to the masses.” (Meister, p.73)
As we face the challenges of the present day, it’s sometimes good to look back, to see how the world changed the last time we faced issues similar to those we face today. Seeing the perilous economic uncertainty of the future, it’s easy to think the coffee industry is posed to collapse. The logic is as it always has been: when we don’t have disposable income, we won’t spend it on disposable products like coffee. But looking back at the last major recession, the Great Depression of the 1930s, will show that despite the economic downturn, the coffee industry thrived.
In reality, whether in the Great Depression or the Financial Collapse of 2008, coffee bucks the trend. Like stationary or funeral services, coffee seems to be somewhat recession proof. Unlike your pens, pencils or coffins though, coffee can weather any storm because it brings comfort, joy and the energy most of us need to get through the day.
In Ever Meister’s fantastic book ‘New York City Coffee: A Caffeinated History’ she records how the citizens of the Big Apple drank more coffee than ever before during the Great Depression. And why you might ask? Well “[f]or one lousy nickel, anybody could get a cup of something warm to soothe the soul and even load it up with milk and sugar in an attempt to fill the stomach.” That is sometimes what it boils down to: coffee brings us happiness and a sense of normality in an ever-shifting world.
While the coffee industry may have survived the Great Depression, it is important to point out that the industry was primarily driven by commodity coffee. During the Great Depression, people kept drinking lots of coffee but quality and prices did not improve. Will the specialty coffee industry survive the current downturn? Many people in the specialty coffee industry are losing income, jobs, and businesses in this time of crisis. What will happen to the coffee farmers, who were struggling to achieve sustainable prices before the pandemic?
Consider this: if your local café closes, your local roaster loses business and buys less [green] coffee. But the [green coffee] market doesn’t shrink, it just moves elsewhere. This ‘elsewhere’ is a big unknown for the specialty coffee industry. Elsewhere might mean cheaper supermarket brands. If we all trade in our two-a-week-latte habit for a bag of pre-ground uncertified, cheap beans from a large commodity trader, that does not bode well for coffee farmers.
While the commodity market serves a purpose, it is built to get the lowest price for coffee available which inevitably means unsustainable pricing for farmers.
In a recent USDA report, the author noted that the international commodity price for coffee in 2019 was below the production costs of most Guatemalan small producers. Stop to think about that for a second. Yes, that’s right. When you buy cheap coffee the person who actually grew the coffee is losing money. And that doesn’t just apply for small coffee producers in Guatemala. It happens in every coffee producing country.
If you haven’t heard of this problem, it’s nothing new. For years now there has been a cycle of low pricing for coffee that has often left farmers short changed and losing money year after year. So while we may find ourselves in a similar position to the one we were in in the 1930s – drinking lots of coffee – it may not be specialty coffee, which means even less money might be making its way back to the growers than before.
But it doesn’t have to be like the 1930s.
If we all put our money where our mouth is and spend a little more for an Organic and Fairtrade bag at the supermarket, or even better some single origin beans from a local roaster, this could make a real difference in the lives of coffee producers.
I would be sad to see my local cafes go and really heartbroken for the baristas who lose their jobs, but if we keep buying premium coffees from specialty roasters, then theoretically some producers might get through this crisis in good form.
The specialty coffee model isn’t perfect and I could fill a whole other article with real critics, but the specialty side of coffee is definitely a better model of sustainability than the commodity market. You spend more on your coffees, the roaster buys better coffees and more money goes back to the producer. In turn the farm owner can pay staff better and support their local communities more.
If nothing else, Coronavirus has proved how interconnected the world really is. The same connections that make us susceptible to global pandemics make us able to support farmers and businesses in far flung places. While I realistically fear that these next six to twelve months might be devastating for coffee shops, roasters and farmers, I want to believe that there is a positive difference we can make and I personally will try to be helping in whatever way I can.
This blog is the second in a series of pieces titled #MoreThanThe234. As part of our #SupportThe234 Crowdfunder Campaign, we have asked several of our partners to write blogs focusing on themes within speciality coffee, the hospitality industry, and the third sector to bring attention to issues of social change. If you’d like to learn more about our Crowdfunder campaign click here.
Stay tuned for our next blog, a reflection on the coffee industry from the perspective of Baristas, written by three of our Graduates.