Industry News | 27 Feb 09

London’s ‘Financial Times’ Newspaper Highlights Disconnect Between Fairtrade Sourcing and Cup Quality

With Fairtrade Fortnight now almost over for 2009, we were delighted to be given a platform to describe our sourcing model to Financial Times journalist, Francis Percival. The editor’s choice of title rather misses the point(!), but the body of this carefully considered and well-written piece appeared in last weekend’s edition and makes clear the different mindset in commodity and specialty sourcing models.

The full text is included below and you can view the original online version at https://www.ft.com/cms/s/2/3a99d2c8-045c-11de-845b-000077b07658.html

How Fairtrade Coffee Can Help The Connoisseur

By Francis Percival
Published: February 27 2009 17:52

Fairtrade coffee has become a familiar sight in British supermarkets and cafés. Its intentions are admirable, as it guarantees a minimum price for coffee growers, and it would be a callous soul who argued against a better deal for these farmers – in 2007 the Fairtrade logo adorned £117m of coffee sold in the UK.

Unsurprisingly, the coffee farmers are market-savvy; smallholders listen to the latest news on a wind-up radio, and the BlackBerry is as omnipresent for the owners of larger estates as it is anywhere else in the business world.

Looming over the offices of DR Wakefield & Co in Southward, south London, there are two screens with the latest market information from the New York and London exchanges. This company is the leading commercial importer of Fairtrade coffees in the UK, and managing director Simon Wakefield grew up in the family business.

He visited his first coffee plantation aged six and takes great pride in how Fairtrade coffee has moved from a niche product to one that competes in the mainstream market.

Fairtrade is not the only label in this market. Other “certified coffees” are those grown organically and Rainforest Alliance accredited beans, a scheme which protects the environment.

Selling “certified coffees” now makes up 70 per cent DR Wakefield’s turnover. Wakefield is enthusiastic about the benefits to disadvantaged farmers from the Fairtrade premium and the anecdotal evidence in support of the programme is strong.

But, as he picks up a market report, Wakefield says: “Wouldn’t it be nice if, just maybe, there was some coffee news to move the coffee market?” The vagaries of the commodity market are always going to hamper the Fairtrade label.

Some coffee experts believe the way forward is to educate coffee drinkers. We are used to buying Fairtrade coffee because it is the “right” thing to do, without thinking about the quality. The next step may be to encourage us to buy and taste coffees in the same way as we buy wine – looking for particular locations and growers, and learning to taste the differences.

The idea is that this will help generate better, more sustainable business for farmers, encourage them to offer quality coffee, and establish supply chains and premium prices, away from the unpredictability of the commodity markets.

One of the champions of this new business model is a former commodity trader. Stephen Hurst was an executive director of coffee trading at Goldman Sachs for 11 years. He founded coffee importers Mercanta in 1996 and turned his back on the commodity markets. “I check the price once a day,” he says “because it is useful for me to know the bare minimum price that my producers might get.”

Mercanta aims to supply speciality roasters with beans sourced directly from the growers. He deals only within the top 2 to 3 per cent of coffee production, prizes long-term buying relationships and – crucially – pays prices relative to the quality produced. Last year, the average price paid by Mercanta across the entire spectrum of coffee origins, grades, and varietals exceeded minimum baseline Fairtrade prices by 20 per cent.

Hurst is a passionate advocate for the “Cup of Excellence” competition, which began in 1999 and is now run in nine coffee-producing countries, from Brazil to Rwanda.

Growers submit their best lots, which are tasted (“cupped” in the professional jargon) by an international expert jury. Winning lots are then submitted for an internet auction where they command stratospheric prices (often more than 10 times the minimum Fairtrade guaranteed price – the top lot in the 2008 auction in Guatemala fetched 75 times the going commodity rate).

“It is the absolutely highest echelon of quality coffee,” says Hurst. He is a past chairman of the competition and five of his eight staff at Mercanta are judges. “More than anything else it is a great opportunity for growers to meet roasters and talk about their coffee – it is a vast discovery programme for previously unknown coffee producers and regions.”

Simon Wakefield is sceptical of the elaborate tasting notes which accompany the Cup of Excellence auctions: “It is clever marketing. But after the beans have been roasted, ground, kept on somebody’s kitchen shelf, made into coffee, and then milk and sugar have been added can you really tell me that you can taste a difference?”

At the moment there are just a few places where interested coffee drinkers can start to educate themselves, most notably at the Monmouth Coffee Company which has two London branches, in Covent Garden and Borough Market.

AJ Kinnell, Monmouth’s coffee buyer, is adamant that speciality roasters do not have to be elitist. She says: “If you spend an hour in the shop you will see all sorts walk through the door. People come to us because they like the taste of the coffee.”

This is still a minority interest, but an enjoyable one, and at the buzzing Monmouth shop in Borough Market it’s possible to try several coffees at any one time, and buy your favourite beans to take home.

I go in and sample coffee from Finca San Francisco Tecuamburro in Guatemala. There are solicitous notes on hand (“Milk chocolate flavour with medium body and soft acidity”), and I savour a blend of three different varietals, grown at altitude on the slopes of a dormant volcano. And as I taste, I learn.

Speciality coffees

Union Hand Roasted coffee: sold in Sainsbury’s and many other retailers and restaurants, and sells direct online.www.unionroasted.com

Monmouth Coffee Company: you can sit in and drink coffee, or take it away, at two London shops: 27 Monmouth Street, London WC2H (Covent Garden) or 2 Park Street, SE1, in Borough Market. Also sells online atwww.monmouthcoffee.co.uk

Mercanta www.coffeehunter.com