Coffee has a sad history for many countries. Colonialism and slavery were used as a means to set up much of the global coffee production, which has left many farmers today living in remote mountainous villages, with coffee as the only possible source of income. Even though 70% of the world’s production of coffee comes from small lot farmers such as these, standard international business practice in coffee leaves these producers at the bottom of the hierarchy.
Peoples Coffee exists to offer an alternative to the normal basis of international trade in coffee; our goal is to use our trade as a mechanism for change in the coffee industry, as opposed to building profit for our shareholders.
At Peoples Coffee, we have a triple bottom line attitude towards trade: people, planet, profit. We measure our organizational success on much more than economic criteria: we direct our trade to those we can have a positive financial, social and ecological impact with.
WHO WE TRADE WITH:
Peoples Coffee trades exclusively with small lot coffee farmers who have joined together to form co-operatives. Key to our vision is how much the farmers are paid in the hand, not just how much we paid someone for the beans – there is a big difference.
We are coffee lovers, and quality is very important to us in our buying decisions. We choose co-ops whose coffee has a quality and flavour profile we like, and will fit into our coffee programme. But we also choose co-ops that are organized in such a way that our trade will have a tangible positive impact on the sustainability of production, and on the lives and communities of the farmers who produce it. We do this by paying more, and taking less profit.
Peoples Coffee purchases green beans from Trade Aid Importers (TAI), New Zealand’s largest green bean broker, who buy directly from the co-operatives. We forecast our coffee sales 16 months ahead, specific to each origin, and Trade Aid factor us in when they are setting contracts with the co-ops. We then purchase green beans on a weekly basis from TAI, who pay the relevant profits back to each co-operative annually.
Together with Trade Aid Importers, we travel to origin each year to visit our co-operatives at harvest time. We believe regularly visiting our producers plays an important role in understanding the realities of farming specialty coffee, and is key to being able to best represent the true value of coffee. Through our visits we are able to see and hear current factors in production, and understand how and why the prices farmers receive in the hand is so important.
Peoples Coffee shares a vision for coffee farmers with Trade Aid Importers, and is thrilled to be supporting co-ops with them, knowing we have a clean and transparent money chain. Buying from a co-op means we have great traceability; we know who grew our coffee, where, how, and exactly how much they got paid.
WHERE WE TRADE:
Our coffee comes from small lot coffee farmers in Africa, and in Central & South America, where the latitude and longitude meet to form ideal growing temperatures and conditions.
Our small lot farmers manage parcels of land typically around 1–5 hectares in size, and farm at altitudes above 1000m, where growing conditions are great for high quality Arabica production, but mechanized farming is less common.
They generally live in villages in the mountains, and plant coffee in amongst the natural forest plants, shaded under a tree canopy. These are perfect growing conditions for producing the tastiest coffee, and have much less impact on the environment than mono-culture planting. Coffee production can be good for biodiversity, and in many countries is allowed to be grown in state forests, as it encourages birds and insect life.
This is in stark contrast with industrial scale coffee that is grown in larger estates and plantations. These plantations are generally monoculture, meaning the landscape has been cleared to make room for lines of coffee to be planted and to allow machines to drive through to harvest cherries.
HOW WE TRADE:
Globally, coffee contracts (how much is paid for coffee) are almost always set using a differential from the New York Coffee Futures (the stock market), where coffee is traded as a commodity. However, the prices we pay to farmers are set through discussions with the co-op to find a price that is reflective of the year they have had, the quality, and where the current NZ pricing market is at. These prices are set to be favorable to producers, but still competitive with other coffee in New Zealand.
Coffee is almost exclusively exported from producing countries in shipping containers that carry 250–275 sacks of coffee. A container of coffee might costs over NZD $100,000 and takes 6 weeks to reach New Zealand via global shipping routes.
In order for any coffee to get to New Zealand, a farmer must sell, and a broker must buy, a whole container of coffee. So small lot farmers, who might only produce 50 sacks a year, are unable to directly access the international export market without a middle man. However, this issue is resolved when producers of similar region and affiliation join together to form a co-op. By pooling their resources, they can access the market with an export license, and through mutual profits, can buy and collectively own coffee infrastructure. As a coffee community, they can share a vision and have the means to develop it.
Through our business objectives we want to support and help progress the small lot farmer’s family business. We want to share and invest in goals with producers, and build relationships that are more than just a division of profit margins. We want to change the value of a commodity, by recognising the quality and value of the raw product – not just by adding value to it through roasting.
This is the crux of Peoples Coffee.
May 15th, 2013