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263. Research review: Counter Culture’s case study on the social impact of microlots

Counter Culture Coffee Buyer and Sustainability Manager Kim Elena Ionescu was scheduled to present the company’s brilliant case study on the social impact of microlots to the 2012 SCAA Expo today.  She was unable to attend, so Counter Culture’s Coffee Director Peter Giuliano stood in for her — arguably one of the more notable understudies in SCAA history.  For a closer look at what’s inside the report, read the summary below or download the full research review here.

The Social Impact of Microlots — Research Review Summary

Counter Culture Coffee (CCC) continues “to boldly go where no man Direct Trade roaster has gone before.”  In 2010, Counter Culture published its first annual Direct Trade Certified Transparency Report, a groundbreaking effort to pull back the curtain on Direct Trade sourcing practices and payment schemes.  Today, the company releases a case study titled “The Social Impact of Microlots” – an unprecedented industry-led examination of the social and economic impacts on smallholder farmers of the microlot approach to sourcing that is so central to the Direct Trade model.

This research is uniquely relevant to CRS in our work with smallholder coffee farmers.  Over the past decade, we have worked with thousands of smallholder farmers seeking to expand their access to specialty coffee markets.  This has, of course, required significant investment in helping farmers improve coffee quality.  In some cases, it has involved support for farmer organizations trying to produce single-orgin, special-process or otherwise distinctive microlots.  We have spent hefty sums helping smallholder farmers upgrade “hardware” – new or improved post-harvest processing infrastructure – and “software” – better husbandry, more effective post-harvest process management, expanded market intelligence, training in coffee grading and cupping, etc.  But we continue to wrestle with big questions:  Which farmers should pursue microlots and which, perhaps, should not?  How much investment in coffee quality is enough?  When do returns to investment in quality begin to diminish?  When does a smallholder farmer more effectively invest her limited resources in other activities unrelated to the continuous improvement of coffee quality?  And in the back of our minds is the lingering question about whether or not microlots will undermine the social cohesion that farmer organizations have worked so hard to foster by delivering financial rewards to some members and not others.

In this report, CCC engages these questions directly – the first time to my knowledge that any Direct Trade roaster has done so publicly – and delivers important insights in response to each.  We thank CCC for its leadership in this regard and salute its continued commitment to transparency: rather than use this research as a source of competitive advantage, CCC has chosen to make it public in the hope of informing and engaging other specialty coffee industry stakeholders who share an interest in the microlot process.

We also hope and trust that CCC’s research into the social and economic impacts of microlots will continue to improve over time just as its annual Direct Trade Certified Transparency Report has.  We believe that future iterations of research into the social and economic impacts of microlots would benefit from larger sample sizes, multiple research sites, longer time horizons, broader multistakeholder participation and increased quantification of observed impacts.  We also believe that CCC and other Direct Trade roasters can generate significant value for smallholder farmers in the meantime through more publications on the sources of smallholder success in the production and marketing of microlots.


1 Comment

  • randy wirth says:

    It is really neat to be in a position to sponsor research relevant to one’s business.
    This is clearly a timely subject as “direct trade claims” are rampant in the coffee industry whether it be industrial sized roasters or neighborhood roasters.

    Unfortunately, like organic, fair trade, and shade grown claims it will take years to sort out criteria, transparency, and oversight to be able to garner sufficient consumer support to make a difference. My concern is not that there be another model for empowerment of coffee farmers. Certainly, the concept of direct trade has merit. Clearly, both specialty coffee farmers and businesses rely on a clear quality difference as their bottom line. If the quality is not there, it is not sustainable in the specialty coffee marketplace. However, we are too far down the road to ignore the problems that created certifications for Organic, Fair Trade, and Smithsonian “Bird-Friendly” coffee.

    My concern is that so many people making direct trade claims seem to need to disparage independent certification whether it be Organic, Fair Trade, or Smithsonian. While none of these models is perfect, they clearly do make a difference. While none of them can guarantee quality, you can find remarkable quality being produced by farmers who subscribe to them. So, my question is why not focus on the farms and farmers within these established models for the quality you are looking for instead of trashing these models and trying to create yet another competing model?

    I do appreciate the questions posed by the “research”. Yet, scalability is important whether “direct trade” is to be simply a small niche market or something more meaningful to the big picture. As a small family roaster, I am also a co owner with my family of a small family vineyard. We literally have winemakers who do work with us hand in hand on every aspect of our harvest much like what Mr. Giuliano proposes we do with all our coffee farmers from the 26 projects we support. I can tell you from the farmer side, that while we get big premiums for some of our production because of collaborative relationships the numbers do not work out for our small 22 acre California farm. We have also had consumers default without notice right before harvest leaving the entire years production to rot in the field.

    Finally, I do appreciate the thought and effort that Mr. Giuliano has put into his concept of “direct trade”. He has made serious contributions to specialty coffee in America and his input is appreciated. Now, if we only had another couple of dozen like him!

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