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Transparency
- Guest Blog -

Transparency <br> - Guest Blog -

by Guest Collaborator

9 months ago


Transparency in Coffee: Who Cares?

by Karl Wienhold

Transparency is something increasingly offered as an intangible benefit of some coffee products. But what is that and why do you need it? It can seem like just another thing, forced into your life that is already full of too many things for you to keep track of. We recognize that buying coffee has gotten more complex over the years and appreciate that most people don’t have time to consider the coffee they purchase with the same attention as they dedicate to buying a new car, so here is a brief overview and an explanation of where transparency fits in.

We can divide the parameters into two classes: tangible and intangible quality attributes which have to do with your experience drinking it, and provenance attributes which have to do with the way it found its way to your hands. Quality attributes include origin location, varietal, growing elevation, farm processing, roast style, and flavor description. Provenance attributes might include producer identity, certifications like organic, fair trade, etc. and other attributes like “shade grown”, “all natural” and others. Many of these claims have the goal of implying that the producers and growers are being treated fairly and caring for the environment. Many of these programs have received serious criticism for their ability to actually improve conditions for producers and protect the environment. And others like “all natural”, “direct trade”, and “shade grown” are unregulated and can mean whatever the seller wishes them to mean, or nothing at all.

Transparency is not a certification, claim, or declaration, rather a strategy of simply showing, describing, and verifying exactly what is going on behind the scenes, eliminating the need to make claims about the nature of that reality, because said reality is presented for everyone to see. When you show verification of how much money you paid coffee farmers, there is no need to claim that you paid farmers “well” and argue about what “well” means and who may or may not have paid them better.

 

Great. So, why do I care again?

Most coffee is traded across international borders, sometimes crossing several and changing hands many times before reaching your cup. While international trade allows us to get the great stuff not produced in our home countries, borders can sometimes keep secrets, including about how your precious goods came to be on the other side of them. Most coffee is produced by over 10 million subsistence smallholder farmers in less developed countries (100% of Direct Access coffee is produced by them). Quite many of these families often endure poverty, lack access to basic services like clean water and education, and are generally desperate to get by. Since processing and shipping must be done at large scale to keep costs down, and because it requires a lot of working capital and includes inevitable risk, most is traded internationally by a handful of large trading companies.

This system that, by nature, consists of many, many sellers with few options as to where to sell (many of whom are very poor and vulnerable) and very few buyers who can buy from anyone (most of whom do not struggle to meet their basic needs) dictates that buyers hold the bargaining power in the exchange, and if they wish, could squeeze desperate producers on price or otherwise. This does happen, overtly and structurally. For the last 30 years, the real price earned by farmers has, on average, steadily decreased while the consumer price of coffee has only increased. Producers now often sell below their cost of production and even more often, if not almost all the time, below a reasonable living wage.

 

Specialty coffee

In this segment, coffee has been getting better and good coffee more ubiquitous, arguably since Peets, Starbucks, and other started to get people really jazzed about better coffee, also about 30 years ago. Today, great coffee is valued and priced higher than ever before. While more care and skill go into specialty coffee roasting than commercial “tin can grades”, it would be foolish to think that farmers didn’t also have something to do with the quality that discerning consumers enjoy. Quite often, however, farmers are not paid any more for specialty grade coffee than for commercial grade that ends up being sold for less than half the price. While there is a spaghetti bowl of different efforts to fix this problem (or imply it’s already fixed), transparency is the knife that cuts through. It’s the bull in the china shop that is stodgy colonial coffee business etiquette. It doesn’t care that someone says you’re not supposed to cut spaghetti or bring bulls to china shops.

There is no sugar coating or inuendo in price transparency but framing and context are what really tell the story. Without this, it can be, or be made to look like, a number soup that no one understands. Proper context and framing are needed to give meaning to transparency data, so that someone on the other side of the world can understand what those numbers mean for a producer. Literal facts must be presented, and if calculations are performed to frame the data to users, those must be shared for transparency information to be comparable. If you can’t compare one brand to another, it’s not good for much aside from pats on the back. For us, the most important elements of context to frame the price paid to producers is the approximate cost of production and the standard commercial price also available to the producer on the day that the exchange was made. This way, one can have an idea of what the farmer’s bottom line looks like, and what it would have looked like had we not intervened.

We choose transparency as a way to present coffee provenance because it means all the cards are on the table. We have nothing to hide from anyone and want to involve consumers in the decision as to what is fair and how things should be done. If you agree with this approach and find that the transparency information presented aligns with your values regarding commerce with subsistence farmers in less developed countries, one way you could let us know is by purchasing a bag. Or five!

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