Back in May, Counter Culture Coffee owner, SCAA President and all-around coffee guru Peter Giuliano took me to task for some pretty lazy reporting. In my post, I repeated the (unsubstantiated) claim of a Fair Trade roaster who told me he didn’t remember the last time he paid less than $2 a pound for his coffee. Today, I settle in for a heaping plate of crow.
To be fair, Peter’s comment “taking me to task” was pointed but polite, direct but diplomatic, and worthy of quoting here at length:
Now, I was surprised that at the end of your posting here, you cite an anonymous “fair trade pioneer” who seems to be bragging that they can’t remember the last time they paid less than $2 per pound for coffee. I’m afraid there is something wrong here- you definitely want to check on that statement. Are they willing to be transparent about that? You’ve done a great job of evenhandedly making comparisons up to now, why would you compare [Counter Culture, Intelligentsia and Stumptown’s] relatively transparent minimum price commitments to an anonymous roaster making an obviously exaggerated claim as “evidence” that it is inaccurate to say that Direct Trade roasters pay more? (Boldface mine.)
I struggled with the idea that the claim was, as Peter suggested, “obviously exaggerated.” I know and trust the roaster in question and had no reason to doubt the veracity of his claim. I had to admit, however, that Peter had a point:
On the business of the $2-per-pound claim, you are absolutely right — it was lazy of me to include it like that. I will go back and do some digging and let you know what I come up with. Thanks for keeping me honest!
So I went back to the roaster to share Peter’s reaction. The roaster’s response, presumably after looking at his books, was: “We just signed a contract…at $1.97 – my bad.” I really believe this is the lowest-priced coffee in this roaster’s portfolio. I just can’t prove it, since he was not eager to meet Peter’s transparency challenge and go public with his prices.
I am not convinced the $2 claim is outlandish. There are other progressive Fair Trade roasters who are totally transparent in their pricing and not far off the $2 mark — Just Coffee’s Transparency Project (see the right-hand margin of the page) reports prices for all its coffees, which come in between $1.91 (Mexico, Peru, DR) and $3.32 (Ethiopia). But until I find someone paying $2 across the board — which may not be hard in this year’s tight market — I will have to settle for eating crow.
Thanks for bringing this back up-
To be clear- the part that I thought was obviously exaggerated was the unnamed roaster’s claim that he “couldn’t remember” the last time he paid less than $2 for coffee. That seems to create the impression that it has been many, many years since that roaster has paid less than $2, which is the part I am skeptical about. Just a few years ago, the “standard” price that most passionate Fair Trade roasters were paying was $1.46. This was totally the standard, and most FT-certified roasters were rightfully proud that they were paying this price, in the context of a C market that was at or below a dollar. I have clear memories of these times, only a few years ago- and I have a famously flawed memory.
I have no doubt that your friend has paid more in the last couple of years, and is paying in the $2 range currently. You reported Just Coffee’s current transparency report, which is great and in which they are paying fairly for their materials. Kudos to them! The DT roasters are paying increasingly high premiums for coffee now too, and this is great.
We can get into the technicalities of coffee pricing if you want, but I still maintain that a solid, transparent minimum price like the ones that are expressed in some companies’ direct trade guidelines compare favorably to an anonymous roaster’s edgy claim. See if you can convince this roaster to come out and discuss openly- this is a great conversation!
No need to eat crow, though… all in the spirit of discussion.
Thanks for the note and your gracious reprieve from crow pie!
I get it now. Obviously exaggerated, as in: “The last time I paid less than $2 for a pound of coffee, Truman was in the White House/gas was a nickel a gallon/color TV hadn’t been introduced/etc.” I suspect the roaster was taking some dramatic license, which is why the line was memorable, even if it may have been too good to be true.
I think it is easy to agree that as a rule, total transparency is hard to beat, especially when matched with high prices and clear incentives for quality.
Hi There Michael,
Thanks for the props on our transparency project. We think that it is important for consumers to know what they are supporting when they buy our coffee. It really helps push the conversation of “quality” to include how the coffee is sourced and how the growers are benefiting (or not) from their relationship with buyers. We want to stress the concept of “total quality” which includes, but goes beyond, how the coffee tastes.
A question for Peter– What does “relatively transparent” pricing mean. I am not super familiar with the DT take on proof and its importance with regard to marketing claims, but I am interested. The last thing I read was Intelligentsia’s claim that “the proof is in the cup” which, frankly, does not really get it done for me. That was a couple of years ago, so maybe the DT take on transparency has changed?
Just Coffee Co-op
First of all, I believe that Direct Trade is a subset of Fair Trade, and therefore there is no Fair Trade vs. Direct Trade. It is very possible for a Fair Trade Certified roaster to be also a Direct Trade roaster- and vice versa- there is much common ground between the two. I don’t want to support a false dualism. There are, however, Fair Trade Certified companies who don’t “do” the Direct Trade thing, and some companies use Direct Trade as a kind of substitute for Fair Trade in their language. I will respect this distinction in my comments below, with the caveat that there is much more overlap than difference.
When I used “relative” in that sentence, I was saying that the DT roasters commonly cited often talk about their minimum price or the average price they pay, or something like that. The anonymous FT roaster Michael was citing was saying that he “couldn’t remember” the time he payed $2.00 for a coffee. My point was that in this case the cited DT roasters were being more transparent than the anonymous FTC roaster, who was not providing any information of his own.
In general, I agree with you. Counter Culture’s take on proof is this: we believe in third-party certification and we have designed a DT system that has clear standards which are certified by a third party. Here’s our system in case you haven’t seen it:
We believe in complete transparency, and annually publish a transparency report that details our relationships, their status, and prices paid for coffee. Here’s our most recent one:
I agree with you, “the proof is in the cup” doesn’t cut it. Direct Trade and Fair Trade roasters alike have a responsibility to back up their claims with actual information. There is a wide spectrum of approaches from companies whatever the category, and certain ones are leading the way in terms of price transparency. Just Coffee has been a leader in this for a long time, which I deeply respect.
Thanks for your thoughtful response– this is a really good discussion.
I agree that the DT/FT can be a false dichotomy. So many approaches fit into either of these identities. I cannot speak very definitively about how the roasters who associate with the DT approach differ from one to the next, but I know that within the “Fair Trade” designation there are plenty of roasters who have never met a coffee farmer outside of trade shows, if at all. On the other hand, there are roasters who are trading directly and fairly, but who do not associate with either of these models. I suppose we need to look beyond “the labels” which is where transparency comes in.
One noteworthy difference in the DT and FT approaches is the emphasis on cooperatives. The initial vision of “Fair Trade” was to give small scale coffee farmers in democratically-organized co-ops a market where their scale and model could be held up and highlighted. DT, I believe, does not make this distinction and gives equal consideration to co-ops, small farms, larger estates/plantations, etc. While I think that there is a good argument for working with progressive plantations and farms (assuming that there is good proof that they operate ethically), FT sticks with cooperatives. Just Coffee is a co-op as well and we want to throw all of our support behind the co-op model which actually requires transparency and a democratic organizational structure. We believe that it is the best business model out there.
I really like the Counter Culture Transparency report. It is really easy to understand and well-put together. Have you all considered linking to the actual contracts in the PDF? They can definitely be hard to understand without the entire document trail– which can be a little time-consuming to pour through– but there are people out there that like to see the documentation. We have had a lot of positive feedback from ours.
After reading the report I have a question about micro-lots and how you all source them within a grower cooperative. Primary level cooperatives generally see all of the coffee from individual members blended together ensuring that all members get the same price per pound based on the coffee that they turn in that is fit for export. Micro-lotting would seem to promote competition between co-op members. This could be a positive thing that drives individual farmers to ratchet up quality (assuming that they have the resources to do this), which in turn could help the co-op on the whole. On the other hand, it also could encourage division between farmers in a co-op as some members are able to make considerably more for their produce than their fellow co-op members. Many cooperatives are struggling in the current market to deliver on contracts as individual members sell outside of the organization due to competitive world market prices and more complex local conditions. Do you feel that micro-lotting has the potential to weaken co-ops in the same way?
Thanks very much and I look forward to hearing your thoughts!
Peter and Matt:
Thanks so much for this excellent exchange.
As we wait for Peter to reply to Matt’s latest question on the social impacts of microlots, I thought I might weigh in with some thoughts about how the answer may depend on what kind of social organization is in place on the ground.
In a context like Nicaragua, where smallholder cooperatives are generally comprised of farmers who are geographically dispersed and manage their coffee parcels individually, I can understand how quality incentives for microlots could potentially cause social tension – some members receive premiums and build closer relationships with a roaster; others grow resentful.
I wonder, however, whether microlotting is less socially fraught in a context like El Salvador, where smallholder coffee generally involves organizations of smallholders collectively managing large estates acquired through land reform in the early 1980s. Husbandry and harvesting are performed collectively and the coffee is milled centrally. Quality incentives are shared out equally because the sources of quality are collective – the land is owned and worked by everyone and the coffee is milled by the organization. We are accompanying cooperatives in El Salvador that are working to differentiate the coffee they offer based on geographic distinctions, varietal, process, etc. The innovations in coffee agronomy, processing and traceability are all collectively managed. While the cup quality hasn’t always panned out according to plan, from what I can tell, theses processes can actually create social cohesion by bringing people together to learn and innovate (and hopefully, prosper) as a group.
(NB: Peter and I discussed this issue here at some length back in May in response to a post on Direct Trade.)