Making Sense of Certification — Fair Trade, Direct Trade, Rainforest Alliance, UTZ, Whole Trade, and Organic.
March 30th 2008 Posted to Coffee Certification. Thorough overview of different coffee certifications and what they mean.
Direct Trade Coffee from Terroir Coffee
Walk into your neighborhood café or pick up a pound of coffee from your local grocer and you’ll no doubt be overwhelmed by the number of different coffees available to you. You’ll need to choose your coffee from a variety of roasts, origins, and blends as well as decide which trade relations model you’d like to support. Here you are, juggling two bags of coffee; you’re committed to becoming a socially conscious coffee buyer (to respect human rights, to participate in an alternative economy, to protect the environment); still, you only have 30 minutes to do your grocery shopping. One bag, from Ethiopia, displays various certification labels. The other, from Brazil, states that the grower uses sustainable environmental practices and protects the rainforests. Coffee bags in hand, you realize that coffee buying is going to be more complicated than you had anticipated. Both bags are doing their best to hook you with their outstanding coffee selection principles. Which bag to choose? Partnering with growers and giving profits to support the communities where the coffee is grown? Artisanal? Sustainable? Bird friendly? Why doesn’t this bag have a Fairtrade label? And what is UTZ? Overwhelmed, you place both bags back on the shelf and grab a pound of Starbuck’s French Roast. After all, it’s familiar. After five confusing minutes comparing coffee claims, the green siren looks awfully comforting.
Which certificate to choose?
Before you decide which type of certified or non-certified coffee to go with, you might ask yourself two questions:
- What do you want your dollar to do?
- How much research are you willing to undertake in order to get your dollar to do what you want it to do?
The type of trade relationship you want to support may change depending upon whether you want your dollar to buy you the highest quality coffee flavor, a guarantee that growers are being paid a minimum price for their beans, assurances that no agro chemicals were used to grow your coffee, the most coffee beans for the buck, the knowledge that the workers that produced your coffee are protected by national laws, a pledge that no bird habitats were disrupted, or reasonable good coffee flavor produced under the aegis of environmental, labor, and business development standards.
With these two questions in mind, let’s take a look at our certification options.
In a bean. Not necessarily the very best coffee in terms of flavor, AND some farmers are unable to get certified, but if you want a well-regulated guaranteed minimum price per pound for coffee growers, as well as requirements that growers meet strict environmental and social standards you can’t go wrong.
Latin America produces most of the world’s Fair Trade certified coffee (the United States and Canada use the Fair Trade label while the rest of the world uses Fairtrade); in part, because the fair trade movement initially arose as a religion-based response to what many believed was an economically unjust system of international trade, a system violently underlined by the Sandinista Revolution and other wars in Central America.
According to Boston-based Equal Exchange, the United States largest and oldest fair trade company (1986), “Progressive church-based constituencies in Europe, linked to liberation theology-inspired cooperatives in southern Mexico drove the initial demand for Fair Trade/Organic coffee in the late 1980s.” Alternative Trade organizations such as Oxfam purchased coffee directly from poor growers and sold it in their world trade shops, but supermarket style consumers in the developed world wanted a more convenient way to buy Fair Trade products. The Netherlands developed the first Fairtrade label, Stichting Max Havelaar, which allowed coffee buyers to quickly identify the origins of their coffee. Over the next 15 years, Fairtrade labeling developed around the world: “Transfair” in the United States, “Reilu kauppa” in Finland, “FairTrade Mark” in Ireland. In order to ensure global standards, all of the disconnected Fair Trade labeling organizations agreed to merge and form the Fairtrade labeling Organizations International. Today, the FLO sets Fairtrade standards and in 2002 the FLO launched a new International FairTrade Certification Mark.
So what does the Fairtrade Certificate guarantee? What standards are being met in order to warrant the Fairtrade label? The Fair Trade Research Group at Colorado State University writes that in order to be a Fair Trade approved coffee grower, growers must meet the following standards (prices are from 2003):
Producers must be small, family-based growers.
Producers must be organized into politically independent democratic associations.
Producers must pursue ecological goals by conserving natural resources and limiting chemical input use.
Coffee importers using Faitrade labels must comply with another set of Fair Trade standards:
Purchases must be made directly from grower organizations using purchasing agreements that extend beyond one harvest cycle.
Importers must guarantee the FLO minimum price (US $1.21 per pound for Arabica coffee) and pay a social premium (US $.05 per pound) above this minimum, or pay the world market price, whichever is higher; certified organic coffee receives a further premium (US $.15 per pound).
Importers must offer pre-financing equal to 60 percent of the contract value upon request.
The number one benefit for the growers is a higher price for their coffee.
Field observations in several case studies found the revenues for Fair Trade coffee to be twice the street price for conventional coffee, even after deductions were made for cooperative management and other expenses. For example, Majomut cooperative members harvest an average of 1,500 pounds, for which farmers earned US $1,700 for organic Fair Trade certified coffee, compared to the local “street” price of US $550 (Perezgrovas and Cervantes, 2002:16; 19).
With coffee production representing roughly 80 percent of Majomut family incomes, Fair Trade certification represents a dramatic increase in their livelihoods. (These results are roughly consistent with one Fair Trade representative’s report that in Latin America, Fair Trade coffee producers were earning an average of about US $2,000 a year where small-scale conventional producers were earning little more than US $500 (McMahon, 2001).
Now this is not to say that Fair Trade is perfect. There are a lot of criticisms of Fair Trade. And smaller specialty coffee roasters can’t afford the 2% Fair Trade Foundation licensing fee. Moreover, because these roasters value flavor first, and some of the highest quality coffee beans on the market are grown by farmers that do not qualify for Fairtrade certification, some specialty roasters prefer to develop direct trade relationships with coffee farmers.
Read more about Fair Trade…
- 2007 “Fair Trade in Bloom.” New York Times. October 2.
- 2006 “Absolution in Your Cup.” reasononline . March.
- 2004. “The Environmental and Other Labelling of Coffee: The Role of Mutual Recognition, Supporting Cooperative Action.” International Institute for Sustainable Development. May.
- 2003 “One Cup at a Time: Poverty Alleviation and Fair Trade in Latin America.” Colorado State University. March.
In a bean. If you want to support socially responsible growers you will need to spend time researching the labor, environmental, and price standards that make up the private direct trade agreement between a given grower and the specialty roaster, but once you have found a reliable partnership you can buy with the knowledge that you are supporting a personal trade relationship dedicated to producing the highest quality cup of coffee.
In the mid-1990s, shortly after Starbucks began radically reinventing the culture of American coffee drinking, small specialty coffee roasters started looking for alternative ways to do coffee business. Neither the traditional trade relations model (coffee sales brokered in bulk at auction) nor the Fair Trade model appealed to these artisan coffee specialists. And so a third way, “Direct Trade,” came into being. A few coffee roasters, most notable Intelligentsia in Chicago and Counter Culture in Durham, have made it their mission to find the world’s most flavorful coffees AND pay top dollar for them. These roasters seek out and develop personal trade relationships with growers. Because these direct traders can buy from growers that don’t qualify for Fair Trade certification, they can purchase coffees like Hacienda La Esmeralda, the winner of the Panama Cup of Excellence award, and one of the worlds most expensive coffees (over $100 per pound). By buying direct trade coffee, coffee connoisseurs can get the highest quality coffee while coffee growers can and do demand a high price for their exceptional beans. Moreover, you, coffee drinker, can sip your java while enjoying the knowledge that the roaster can personally vouch for the labor and environmental conditions at the coffee farm that grew your morning brew.
Read more about direct trade coffee…
- 2007. “To Berundi and Beyond for Coffee’s Holy Grail.” The New York Times. September 12.
- 2007. “Fair Trade vs. Direct Trade, Part 1.” Coffee Tao. October 15.
In a bean. Do your part to save the rainforests by supporting an organization that aims to give farmers incentives to meet “sustainable agricultural principles,” although the farmers do not get a minimum price guarantee.
Without a doubt, the Rainforest Alliance, founded in 1987 and based in New York, has been doing some pretty cool stuff, beginning with the first sustainable forestry certification program launched in 1989. When you buy Rainforest Alliance coffee, you are supporting an NGO dedicated to a two-pronged mission of transforming land use and educating the public about the world’s eco-systems and wildlife. In addition to overseeing the certification of farms, the Rainforest Alliance has a sustainable tourism program, a free online educational program, and a free online searchable database of conservation projects.
However, the Rainforest Alliance does have a downside. Unfortunately, coffee sellers can use the Rainforest Alliance label on their coffee bags even if only 30% of the beans are Rainforest Alliance certified. And the Rainforest Alliance does not provide crop pre-financing (Fair Trade does), which is often critical for farmers in countries where lending programs have collapsed or lending institutions are corrupt.
In a bean. Better than Folgers, sure, but watered down standards and no price minimums for growers is why some critics call it Fair Trade Lite.
UTZ is a certification program launched in 2002 by the Dutch food retailer Ahold. The UTZ certification program has a code of conduct; however, the criteria for certification is less strict than the criteria applied by Fair Trade. Click here to download a comparison of Fairtrade and UTZ certification. Perhaps the most troubling thing about UTZ certification is that this label is part of a broader corporate movement to market minimal product changes as environmentally significant. Coffee & Conservation blogs that UTZ certification actually provides few protections for the environment.
Utz Kapeh (which is Mayan for “good coffee”) has the least stringent environmental criteria of any of the major certification programs, weak enough to be basically useless if what you are looking for is ecologically-friendly coffee.
I’ve not gone through all their other criteria, but it sounds from what I’ve read that one of the strengths of this certification is its transparency system. Utz Kapeh emphasizes recordkeeping and it’s said that Utz Kapeh certified coffee is traceable from grower to roaster. I don’t know how much detail this requires, but it doesn’t appear much data is accessible and useful to consumers. But Utz Kapeh is one of the fastest-growing certification programs in the world, at least in part because of its generous (broad? loose?) criteria. Utz Kapeh certified coffee is not extremely common in the U.S., but expect that to change as the big corporate coffee pushers continue to look for ways to exploit the ethical coffee market.
Read more about greenwashing…
- 2008. “The Six Sins of Greenwashing.” Calgary Herald. March 3.
- 2008. “Are companies telling us ‘little green lies’?” Press-Telegram. March 13.
In a bean. Best of all worlds? Maybe. Certificate developed by Whole Foods in partnership with Fair Trade. In addition to the Fair Trade guarantees, Whole Trade products must meet Whole Foods quality criteria, which should mean that you can do good AND drink a flavorful cup o’ Joe.
This program was launched at the end of March 2007. Right now Allegro coffee is sporting the Whole Trade label at Whole Foods. According to the Transfair website, Whole Foods Market will also “donate one percent of Whole Trade product sales to the Whole Planet Foundation™, which fights poverty by providing grants for micro loans to women entrepreneurs in the developing world.”
Read more about Whole Trade…
In a bean. All of the above certified coffees may or may not be organic. Unless coffee is certified organic you can’t assume that it is.
The below information is from the Organic Trade Association website.
What does it mean to be “certified organic”?
In order for coffee to be certified and sold as organic in the United States, it must be produced in accordance with U.S. standards for organic production and certified by an agency accredited by the U.S. Department of Agriculture. U.S. requirements for organic coffee production include:
* It must have been grown on land without synthetic pesticides or other prohibited substances for three years.
* There must have been a sufficient buffer between the organic coffee and the nearest conventional crop.
* The farmer must have a sustainable crop rotation plan to prevent erosion, the depletion of soil nutrients, and control for pests.
What labels might you see on organic coffee and what do they mean?
The USDA Organic seal can appear on any coffee product that contains at least 95 percent organic ingredients and that has been certified as organic by a certification agency accredited by the U.S. Department of Agriculture. The coffee may also carry a label saying “100 percent organic” or “Organic.”
Fair Trade certification focuses on labor and trade standards to provide producers with a guaranteed price. All Fair Trade coffee is not necessarily organic. However, Fair Trade does require environmental stewardship. Approximately 85 percent of all Fair Trade CertifiedTM coffee sold in the United States is also certified organic. In the United States, coffee must be certified by TransFair USA to use a Fair Trade label. Organic producers of Fair Trade coffee received a fixed $1.41/lb in 2005.
Bird Friendly® can only be used by operators that meet inspection and certification requirements of the Smithsonian Migratory Bird Center. All certified Bird Friendly® coffee must also be certified organic.
Bird Friendly® certification requires that the coffee be shade-grown with a wide variety of native shade trees and other shade-providing species. No synthetic chemicals can be used in the processing of Bird Friendly® coffee.
For information on other eco-labels that may appear on organic coffee, see www.eco-labels.org.