A collective review of work being done to make coffee sustainable
Steering committee:
Annette Pensel (Global Coffee Platform)
Bambi Semroc (Sustainable Coffee Challenge)
Joost Gorter (IDH Sustainable Trade Initiative)
Kim Elena Ionescu (Specialty Coffee Association of America)
Author: Sanne Steemers (Valued Chain)
Coffee Sustainability Catalogue 2016
The coffee sector has invested heavily in sustainability for decades, recognizing that we must
ensure our ability to meet rising demand for coffee while also increasing the prosperity and
well-being of producers and conserving nature. In 2014, leaders in the sector came together
to develop a vision for coffee sustainability that resulted in Vision 2020: a call for improved
alignment within the sector on our sustainability efforts.
In late 2015 the
Global Coffee Platform
, the
Specialty Coffee Association of America
and the
Sustainable Coffee Challenge
jointly recognized the need to inventory existing efforts to make
coffee a sustainable agricultural product, understand who is doing what sort of work, where
the investments are going and how we can better understand and share our impacts and
experiences.
We are grateful for the collaboration and participation of over 80 respondents in this
first-of-its-kind catalogue of efforts underway to increase sustainability within the coffee sector. This
report, which synthesizes the contributions of those respondents, attempts to organize this
work into a coherent strategy that recognizes the role and contribution of actors throughout
the sector – retailers, roasters, traders, producers, governments, certification organizations,
NGOs and many others.
We hope that this study sheds more light on the tremendous efforts already underway to
advance sustainability in the coffee sector and catalyses the additional collaboration and
investment necessary to achieve our shared sustainability objectives.
Coffee Sustainability Catalogue 2016
•
Executive summary
•
WHO
: the actors in coffee sustainability
•
WHY
: what we aim to achieve
•
WHAT
: our activities
•
WHERE
: geographical focus
•
HOW
: collaboration for strategy, funding and measurement
•
Appendix A: current initiatives framework: overview of current sector strategies
•
Appendix B: stakeholder directory
Wide involvement in sustainability dialogue
Partnerships between coffee companies and
non-profit organizations are common practice
and mentioned as a strength by many
respondents.
Sustainability is on the agenda of most large
value chain actors.
•
Low inclusion of specific stakeholder groups in
our sample of the current sustainability
dialogue: producers, specific large consuming
countries in Asia and Europe (Italy, France and
Eastern Europe), smaller roasters and retailers
that together represent a large share of total
coffee volume, governments, service providers
in inputs and finance.
Good mix of value chain actors and partners, but low
representation of government and specific stakeholder groups
Source: interview and survey respondents, ICO Source: interview and survey respondents
23%
20% 7% 47%
Sustainability stakeholders in and
around the value chain
Roaster Trader
Producer (organization) Exporter
Retailer
Non-value chain actors
34% 45% 18% 32% 11% 7% 11% 57% 20% 8% 31% 21%
Share of production (ICO 2014/15) Share of consumption (ICO 2014) Sustainability stakeholders included in mapping (headoffice location)
Representation by region
Impact priorities aligned with Global Goals
Objectives are naturally aligned with UN Global
Goals (Sustainable Development Goals).
Most respondents share the consensus that
economic sustainability is a pre-requisite for
prosperity and well-being of producers and
environment conservation.
•
Respondents are missing one documented
shared vision on sustainability.
•
Priorities vary between individual respondents
and any shared vision needs to allow for
different practical definitions to meet the
various aims of actors involved.
Social and economical impact together with climate action are
pursued by most respondents, but individual priorities vary
Source: interview and survey respondents Source: interview and survey respondents
0% 10% 20% 30% 40% 50% 60%
Forest, water and soil conservation
Prosperity and well-being of producers Sustained supply of coffee % o f re sp o n d en ts p riorit izin g t h is impa ct in t h eir t o p 5
Prioritization by respondent type
coffee value chain non-value chain actors Better Coffee Quality
Responsible Consumption Decent Work And Economic Growth Climate Action No Poverty
Top 5 coffee sector desired impacts
Prosperity and well-being of producers Forest, water and soil conservation Sustained supply of coffee
Sustainability embedded in business models
As a sector, we jointly have experience to
address most needs. Experienced respondents
are willing to share best practices and lessons
learned.
Certification/verification is a common business
model included in most sustainability
initiatives.
Coffee value chain has largely integrated
farmer outreach in business as usual.
•
Identify and share tools and best practices for
supply chain services.
•
A sustainable smallholder farm is diversified,
sufficiently large and inclusive, but this needs
to be more widely addressed in programs.
•
Develop strategy based on facts and research.
Increase involvement from governments in
embedding measures in policy and law.
Certification is common business model, several other
activities are introduced, but strategy is rarely fact-based
Source: interview and survey respondents
0% 20% 40% 60% 80% 100% Disaster Relief
Logistics Services Value Addition In Origin Diversification Support Demand Generation Access To Inputs Incentives Access To Finance Traceability And Assurance Social Inclusiveness Business Support Agricultural Extension Services
% of respondents including this in their programs
Sustainability activities
Certification/verification Supply chain services Non-coffee activities
Geographical focus follows supply & demand
Several volume origins have embedded
sustainability in business as usual.
Focus countries for sustainability mainly
prioritized because of quality, potential
productivity increase and supply risks.
Strong regional sustainability relations
between North and Latin America, and
between Europe, Africa and Asia building on
current supply and demand.
•
Innovation budget is mainly focused on Latin
America. Budget per farmer in Africa is low,
partly attributed to economies of scale, but
also to low volume per farmer resulting in high
cost per MT which puts pressure on cost.
•
The Tanzania case illustrates how different
programs likely reach out to the same farmers.
Discuss justification of current investments in
East Africa in relation to possible overlap,
efficiency and impact achieved.
Geographic focus follows flows of coffee and origin needs, with
risk of overlap in East Africa, and some origins left out
$423 $519 $256 $200 $400 $600 0% 50% 100%
LatAm Asia Africa
Innovation and scaling projects per region
Innovation projects >$500 per farmer Scaling projects <$500 per farmer Average budget per farmer 0%
30% 60%
LatAm Asia Africa
% of respondents active in sustainability in this region
Sustainability focus of main consuming regions
% of ICO production 2015/16 North American respondents European respondents
Source: data provided by donors, public spending databases, interviews Source: interview and survey respondents, ICO
Strategy, funding and measurement
Collectively, the sector has a lot of experience
in developing sustainability programs.
Attributed to experience, most respondents
feel comfortable with communication,
collaboration and learning.
Existing platforms have trust of members and
overlap is less than perceived.
Annual available budget of 350M$ (2% of
green coffee value), in sector with low margins.
•
Ensure that variety in platforms does not lead
to a scattered approach by coordinating
between platforms. Balancing inclusiveness
and ability to act of platforms.
•
Explore pooling resources by investing jointly
via a platform or fund. Explore carbon
financing for funding coffee sustainability.
•
Impact measurement not yet embedded in
sustainability work, because of cost and effort.
With current approach we need until 2045 to become a
‘
sustainable
’
sector
350 M$ 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 0 M$ 50 M$ 100 M$ 150 M$ 200 M$ 250 M$ 300 M$ 350 M$ 400 M$ Estimated total annual budget % o f gre en co ff ee v alu e An n u al to ta l b u d ge tEstimated current annual budget for coffee
sustainability in relation to green coffee value
Annual private sector premiums paid Annual private sector budget (excl premiums) Annual other funding Annual donor budget
Source: data provided by donors, public spending databases, interviews, Valued Chain
0 10 20 1985 2000 2015 2030 2045 2060 2075 # farme rs (m ill ion s)
time to implement current sustainability approach/definition
Estimated time to become a 'sustainable' sector
At current implementation speed (350.000 farmers/year) At historical realized implementation speed (140.000 farmers/year) Producers reached to date
Coffee sustainability stakeholders
Coffee value chain actors are supported by a large number of
other public and private organizations
•
The sample of participating organizations is
representative for the membership and network of
GCP, IDH, SCAA and SCC. Roasters and traders are well
represented, whereas many unorganized producers
are less active in the international sustainability
dialogue.
•
High number of non-profit organizations compared to
coffee value chain actors. Partnerships between coffee
companies and non-profit organizations are common
practice and mentioned as a strength by many
respondents.
53%
47%
Respondents in and around the value chain
Coffee value chain Non-value chain actors
44%
37% 13%
Respondents in coffee value chain
Roaster Trader Producer (organization) Exporter Retailer 49% 24% 10% 10% 7%
Types of non-value chain actors
NGO Platform / partnership Government / public Research Service provider / supplier
Source: interview and survey respondents Source: interview and survey respondents Source: interview and survey respondents
- 500 1.000 1.500 2.000 2.500 Producer (organization) Exporter Trader Roaster Retailer Co ffe e valu e c h ain
Coffee value chain actors - overall
# estimated large actors # estimated small / other
Value chain representation
•
Sector has an hourglass shape: volumes are concentrated with a few large roasters and traders, whereas
the top and bottom of the value chain have many more smaller actors.
•
Large roasters and traders are considered to be leading the sustainability dialogue. Some small roasters
are specifically committed to integrating sustainability. Involvement of retailers in sustainability is limited,
and often mainly a certification policy managed by their private label roaster and/or trade supplier.
•
Involvement of producers and local exporters is limited, attributed to a lack of organization and
resources, and language. Some stakeholders believe that this underrepresentation also relates to a
demand-driven agenda more than real needs, although this is debated by others.
Roasters and traders lead the sustainability dialogue, producer
and retailer representation is limited
> 0 5 10 15 20 25 Producer (organization) Exporter Trader Roaster Retailer Co ffe e valu e c h ain
Coffee value chain respondents
# actors included in mapping
Source: interview and survey respondents Source: estimate Valued Chain
Enabling environment representation
•
Public representation in the sustainability dialogue is still considered too low by most respondents.
Government involvement is needed for an effective enforced legal framework and extension to farmers.
•
ICO is an exception but has only a representative role, whereas a few producing countries have national
platforms where government participates. The UN "Protect, Respect and Remedy" Framework for
Business and Human Rights developed by Special Representative John Ruggie provides a starting point
for defining roles and responsibilities.
•
Larger involvement of service providers especially in inputs and finance is considered a success factor in
realizing a sustainable sector, as inputs and finance are a pre-requisite for impact in agricultural
practices. Several respondents suggest that a number of large industry associations in consuming
countries should become more involved in sustainability.
Ruggie framework: Protect, Respect, Remedy
The State Duty to Protect
The Corporate Responsibility to Respect
Access to Effective Remedy
0 5 10 15 20 25Service provider / supplier Research Government / public Platform / partnership NGO N o n -va lu e c h ain ac to rs
Non-value chain respondents
# actors included in mapping
Sector is supported by civil society and research, but needs
more government involvement
Source: interview and survey respondents Source: UN "Protect, Respect and Remedy" Framework
Stakeholder representation by region
•
Representation is based on the headoffice
location of the organization which causes some
bias, especially some very large roasters are
based in Europe and market their coffee
globally. Even correcting for this bias,
sustainability seems to be led from consuming
regions Europe and North America.
•
Europe is missing representation from large
consuming countries including Italy, France
and Eastern Europe. Several respondents
believe this is partially caused by a lower
interest in sustainability, and by a dominant
national regulatory approach from government
reducing the interest in international dialogue.
•
Representation of producing regions with
domestic markets in Africa, Latin America and
Asia is low. There is a partial bias following the
decision to conduct the survey only in English.
Respondents however believe that producer
representation in the international dialogue is
low, even when corrected for this bias.
Sustainability agenda appears to be influenced mainly by
consuming regions, missing certain markets and many origins
34% 45% 18% 32% 11% 7% 11% 57% 20% 8% 31% 21%
Share of production (ICO 2014/15) Share of consumption (ICO 2014) Sustainability stakeholders included in mapping (headoffice location)
Representation by region
Europe North America Africa Latin America Asia
26%
26% 23%
10% 5%5%
Sustainability stakeholders by country in Europe
Switzerland Netherlands Germany United Kingdom Spain Belgium Italy Norway
Source: interview and survey respondents Source: interview and survey respondents, ICO
WHO
: summary of strengths and gaps
Strengths already achieved:
A good mix of value chain actors and other
stakeholders.
Partnerships between coffee companies and
non-profit organizations are common practice
and mentioned as a strength by many
respondents.
Sustainability is on the agenda of most large
value chain actors.
Gaps and challenges going forward:
•
Low inclusion of specific stakeholder groups in
our sample of the current sustainability
dialogue:
•
Producers
•
Specific large consuming countries in
Asia and Europe (Italy, France and
Eastern Europe)
•
Smaller roasters and retailers that
together represent a large share of total
coffee volume
•
Governments
•
Service providers in inputs and finance
Building on existing collaboration and commitment, the agenda
should address inclusiveness
Sustained supply of
coffee
Current collective desired impact
People planet profit widely recognized as sustainable impact
categories, large overlap with global goals
Prosperity and
well-being of producers
Forest, water and soil
conservation
No poverty
Zero hunger
Good health and
well-being
Quality education
Gender equality
Decent work and
economic growth
Clean water and
sanitation
Affordable and clean
energy
Climate action
Life on land
More coffee availability
Better coffee quality
Stable coffee prices
Value addition for
improved margins
Sector trusted by society
UN Sustainable Development GoalImpact priorities aligned with Global Goals
•
4 out of the top 5 coffee
sustainability impacts
link directly to UN
Global Goals (SDG’s 1,
13, 8 and 12).
•
Most stakeholders are
driven by social impact,
with profit being the
main shared interest,
and climate change
considered the largest
risk.
•
No poverty is pursued
by most but only half of
the respondents,
priorities vary between
individual respondents.
•
Desired impacts are
overall aligned, with no
significant differences
between regions and
types of actors.
Social and economical impact together with climate action are
pursued by most respondents, but individual priorities vary
Source: interview and survey respondents
0% 10% 20% 30% 40% 50% 60%
Affordable And Clean Energy Sector Trusted By Society Life On Land Quality Education Zero Hunger Clean Water And Sanitation Good Health And Well-Being Stable Coffee Prices More Coffee Availability Gender Equality Value Addition For Improved Margins Better Coffee Quality Responsible Consumption And Production Decent Work And Economic Growth Climate Action No Poverty
% of respondents prioritizing this aim in their top 5
Prioritization of desired impact
Supply impact more important to value chain
•
Respondents in the value chain (mainly
roasters and traders) prioritize economic
impact, whereas non-value chain actors more
frequently pursue social and environmental
impact.
•
Most respondents share the consensus that
economic sustainability is a pre-requisite for
prosperity and well-being of producers and
environment conservation.
•
Most programs are executed in partnerships
between profit and non-profit actors, which
should ensure impact is balanced.
•
Whereas profitability is a shared aim for most,
the focus varies between volumes, quality,
price and cost.
Desired impacts are overall aligned, with economic and
commercial impact more important to coffee value chain actors
Source: interview and survey respondents
0% 10% 20% 30% 40% 50% 60%
Forest, water and soil conservation
Prosperity and well-being of producers Sustained supply of coffee % o f re sp o n d en ts p riorit izin g t h is imp act in t h eir t o p 5
Prioritization by respondent type
WHY
: summary of
strengths and gaps
Strengths already achieved:
Objectives are naturally aligned with UN Global
Goals (Sustainable Development Goals).
Most respondents share the consensus that
economic sustainability is a pre-requisite for
prosperity and well-being of producers and
environment conservation.
Gaps and challenges going forward:
•
Respondents are missing one documented
shared vision on sustainability.
•
Priorities vary between individual respondents
and any shared vision needs to allow for
different practical definitions to meet the
various aims of actors involved.
We are aligned on activities and aims, but relation between
implementation and impact is rarely explicit
Current initiatives framework
WHAT
/ Activities
WHY
/ Motivations
Current individual sustainability strategies and theories of
change are classified in a theory of change framework
Implementation
Outcomes
Impact
Enablers
Policy / law Research Sustainability definition Platform Extension Business support Social and community Disaster reliefDiversified farm & household Access to inputs
Access to finance Logistics
Incentives
Traceability & assurance Value addition in origin Demand generation Yield / productivity Quality Cost Price Resilience Cashflow Market access Inclusivity Labour conditions Profit ab ilit y
Prosperity and well-being of producers
Forest, water and soil conservation
Sustained supply of coffee
Ecosystem services Green house gas reduction
Common implementation activities
•
Almost all programs include
outreach via agricultural
extension services.
•
Certification is the common
business model, including
consumer awareness, social
inclusiveness, traceability
and assurance and
incentives.
•
Business support, access to
inputs and access to finance
are recognized as important
but challenging with a lack
of best practices available.
•
Value addition via grading or
washing is gaining interest.
•
Fewer programs have
activities outside the coffee
value chain. Diversification
and disaster relief are least
addressed.
Certification is the common business model, additional
activities are introduced
Source: interview and survey respondents
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Disaster Relief
Logistics Services Value Addition In Origin Diversified Farm And Household Support Demand Generation And Consumer Awareness Access To Inputs Incentives Access To Finance And Risk Management Traceability And Assurance Social Inclusiveness And Community Welfare Business Support Agricultural Extension Services
% of respondents including this in their programs
Sustainability activities
Common enabling activities
18% 32% 45% 47% Policy/Law Research Sustainability Definitions Platform En ab le rs% of respondents executing this activity
Enabling activities
•
Platforms and partnerships are common and
appreciated by respondents for sharing lessons
learned.
•
Many recognize the need to define
sustainability in a certification code of conduct,
supplier code, or national curriculum, but
agree this needs to be complemented with
other activities. Few respondents can provide a
definition, but several tools and curricula are
available.
•
Several respondents see a need for more
agronomy and development research to
substantiate strategies and measure impact
based on facts instead of assumptions. This is
currently in progress but takes time.
•
Many indicate they would like more
involvement from governments in embedding
measures in policy and law.
Dialogue and sustainability definitions are well-developed,
fact-based research and government regulation are needed
Stakeholder roles in execution
•
Implementation largely executed by actors that
are a direct part of the coffee value chain,
embedded in core business.
•
Value chain actors also very involved in
enabling activities, although their research
findings and sustainability definitions are not
always shared outside of their own
organization.
•
Civil society works on inclusiveness, business
support and diversification.
Coffee value chain executes many sustainability activities and
has largely integrated farmer outreach in business as usual
Policy/Law Platform Research Sustainability Definitions Enablers # o f re sp o n d en ts e xe cu tin g t h is act iv ity
Enabling activities by actor type
My organization executes this - Coffee value chain My organization executes this - Non-value chain actors
Source: interview and survey respondents Source: interview and survey respondents
Di sas te r R e lie f Di ve rs ificatio n S u p p o rt A cc es s T o F in an ce So ci al In cl u si ve n es s V al u e A d d iti o n In O ri gi n A cc es s T o In p u ts Lo gi sti cs S ervi ce s Bus in e ss S u p p o rt A gri cu lt u ral E xte n si o n S er vic e s De man d G e n e rat io n In ce n ti ve s Trac e ab ili ty A n d A ss u ra n ce Implementation # o f re sp o n d en ts e xe cu tin g t h is act iv ity
Implementation activities by actor type
My organization executes this - Coffee value chain My organization executes this - Non-value chain actors
Vision on sustainable smallholder farms
•
Several respondents suggest that smallholder coffee farms are
sustainable when:
•
they are diversified with multiple cash and food crops and other
income sources
•
have a minimum size allowing to generate enough income and
implement good practices
•
are managed jointly by the full household of man, woman and
youth
•
Whereas inclusiveness is generally considered, diversification is not
widely implemented, following the sector interest in mainly coffee.
•
Diversification reduces economic risks of price and productivity. It also
conserves biodiversity on the farm, increases self-sufficiency, and offers
inclusive opportunities to women and youth. A mix of coffee, food crops,
livestock, processing and/or renewable energy generation is
recommended.
•
In addition, certain very small and unproductive farms are considered
not viable and will never provided a living income to the household, even
with support. The sector needs to discuss farmer segmentation and what
is considered viable, and what alternatives can be offered to those
farmers that are not in that position.
A sustainable smallholder farm is diversified, sufficiently large
and inclusive, but this is not widely included in programs
WHAT
: summary of
strengths and gaps
Strengths already achieved:
Many activities being implemented in the field.
Each project has a different individual focus,
sometimes limited in scope. As a sector, we
jointly have experience to address most needs.
Experienced respondents are willing to share
best practices and lessons learned.
Certification/verification is a common business
model included in most sustainability
initiatives.
Coffee value chain executes many
sustainability activities and has largely
integrated farmer outreach in business as
usual.
Gaps and challenges going forward:
•
Identify and share tools and best practices for
business support, access to inputs, access to
finance and logistics.
•
A sustainable smallholder farm is diversified,
sufficiently large and inclusive, but this needs
to be more widely addressed in programs.
•
Increase involvement from governments in
embedding measures in policy and law.
•
Relation between activities and desired impact
is rarely explicit. Develop a sector wide
strategy based on facts and research, and
define and measure explicit tangible
outcomes.
Certification is common business model, several other
activities are introduced, but strategy is rarely fact-based
Focus countries for sustainability
•
Most coffee value chain
actors focus on a limited
number of origins for their
sustainability work, mainly
the origins that are
important for their sourcing.
•
Non profit actors more
frequently work across a
wide range of origins.
Sustainability work focuses on Latin America and Africa,
interest of stakeholder varies between origins
0% 10% 20% 30% 40% 50% Co lo mb ia G u ate mala Per u H o n d u ras Braz il N ic arag u a Me xi co El S alvad o r Co sta R ic a Ec u ad o r V en e zu el a In d o n es ia V ie tn am In d ia Pa p u a N ew G u in ea La o s Ch in a Th ail an d Ta n za n ia Ug an d a Eth io p ia Ke n ya R w an d a Bur u n d i DR C o n go Camer o o n Cô te d 'Ivo ir e Mad ag as car
LatAm Asia Africa
Stakeholder sustainability focus
% of respondents active in sustainability in this origin
0% 10% 20% 30% 40% < 5 origins 6-10 origins 11-15 origins > 16 origins % of respondents
Number of origins in which respondents work on sustainability
Coffee value chain Non-value chain actors
Relation between volumes and sustainability
•
Less focus on Brazil,
Colombia, Vietnam,
Indonesia and India
where certification has
become common with
local ownership.
•
Larger interest in
Central American
countries with specific
challenges from leaf rust
and climate change.
•
Larger interest in Africa
because of coffee
quality in combination
with livelihood needs.
•
Larger interest in origins
in Africa and Asia that
have a potential for
productivity increase:
Kenya, Tanzania, Laos,
Thailand, China.
•
Ease of working in a
country and donor
priorities influence
prioritization.
Sustainability interest is less driven by current volumes, more
by quality, potential productivity increase and supply risks
-25% 0% 25% Braz il Co lo mb ia H o n d u ras Me xi co G u ate m ala Per u N ic arag u a Co sta R ic a El S alvad o r Ec u ad o r V en e zu el a * V ie tn am In d o n es ia In d ia Pa p u a N ew G u in ea La o s Th ail an d Ch in a * Eth io p ia Ug an d a Cô te d 'Ivo ir e Ke n ya Ta n za n ia Camer o o n Mad ag as car DR C o n go R w an d a Bur u n d i *
LatAm Asia Africa
Difference between % of respondents active in sustainability in this origin and % of ICO production volume
Sustainability focus in relation to production volume
Regional total Sustainability interest smaller than share of volume Sustainability interest larger than share of volume
Sustainability relations are regional
•
Following a larger commercial interest of value
chain actors, there is some more activity in
high volume origins by coffee roasters and
traders compared to non profits in the
enabling environment. This is visible both on a
regional and country level.
•
The general alignment in focus origins can be
explained by the partnership approach that the
sector has developed, with companies and
other organizations working together in
projects in the same countries.
•
Sustainability relations build on current
physical flows of coffee, with strong ties
between North and Latin America, and
between Europe, Africa, and Asia.
•
Consumer palates differ between consuming
regions and affect demand for a specific
quality or flavour profile.
•
Geographical proximity is a key factor in supply
chain relations, especially for volume.
Regional ties between North and Latin America and between
Europe, Asia and Africa
0% 30% 60%
LatAm Asia Africa
% of respondents active in sustainability in this region
Sustainability focus by respondent type
% of ICO production 2015/16 coffee value chain non-value chain actors
0% 30% 60%
LatAm Asia Africa
% of respondents active in sustainability in this region
Sustainability focus of main consuming regions
% of ICO production 2015/16 North American respondents European respondents
Source: interview and survey respondents, ICO Source: interview and survey respondents, ICO
Regional focus of investments
•
Major donors are USAID, World Bank, IDH, Bill
& Melinda Gates Foundation and regional
development banks.
•
Overall donor focus on Africa, driving
investment in the region.
•
Major donors each have different individual
focus:
•
USAID invests mainly in Latin America
and Africa
•
World Bank invests more in Asia
•
Gates Foundation focuses on Africa
•
IDH invests in line with private sector
priorities across all continents
•
Regional development banks invest in
their own region
Sustainability investments by major donors and their private
partners focus on Africa
LatAm;
30%
Asia; 24%
Africa;
46%
Total donor budget allocated to regions
Public and private investment priorities
•
Interest in Africa and specific origins in Asia is
strongly donor driven.
•
Projects in Africa are generally larger scale with
lower investment per farmer. This can be partly
attributed to economies of scale and lower
cost levels locally, but is also attributed to low
volume per farmer resulting in high cost per
MT which puts pressure on cost.
Projects in Africa and Latin America largely publicly funded,
with larger outreach and lower budgets per farmer
51% 32% 21% 49% 68% 79% 0% 20% 40% 60% 80% 100% LatAm Asia Africa
Private/public funding ratio per region
Private sector % Matchfunding %
14.000 8.000 24.000 5.000 10.000 15.000 20.000 25.000 30.000
LatAm Asia Africa
Average # of farmers/households per project
Average project size per region
$420 $520 $260 $0 $200 $400 $600
LatAm Asia Africa
Average budget per farmer (excl certification premiums)
Average project budget per region
Source: data provided by donors, public spending databases, interviews Source: data provided by donors, public spending databases, interviews
Investment categories
•
Projects can be categorized:
•
Implementation projects, aimed to reach out
to farmers, with an average budget of around
$200 per farmer.
•
Enabling environment and/or innovative pilots,
with high budgets per farmer, or even pure
research without any farmer outreach.
•
Investments in innovation are currently mainly in Latin
America, attributed to research in relation to leaf rust
and other climate change impacts. With existing high
reach of certification reaching further scale is less
needed.
Implementation projects in all regions, innovation focus in
Latin America to address climate change impacts
0% 5% 10% 15% 20% 25% <$100 $100-150 $150-300 $300-500 $500-1000 >$1000 Impl e me n tati o n /s cale En ab lin g/ in n o vatio n
Innovation and scaling projects per region
LatAm Asia Africa 48%
52%
Total donor budget allocated to project types
Enabling/innovation Implementation/scale
Source: data provided by donors, public spending databases, interviews Source: data provided by donors, public spending databases, interviews
0 100.000 200.000 300.000 400.000 500.000 Cumulative reported # farmer outreach Estimated # coffee farmers in Tanzania Potential gap or overlap
Reported farmer outreach compared to
estimated number of farmers in Tanzania
Risk of overlap in East Africa
•
Several respondents see risk of overlapping
investments. This is illustrated by the case of Tanzania.
Summing up reported project outreach compared to
different assumptions about the numbers of farmers,
we are not sure whether there is an overlap in projects
or a gap in outreach.
•
Respondents consider it likely that some overlap
occurs, while there is also still a large number of
farmers that have not been reached. There is a need
for coordination and reliable data.
•
Analysis of sustainability focus and volumes suggests
the same risk applies in Kenya, Rwanda and Burundi.
High interest and investment in East Africa suggests risk of
overlap and emphasizes need for coordination and reliable data
Source: data provided by donors, respondent progress reports, interviews Source: interview and survey respondents, ICO
0% 2% 4% 6% 0% 15% 30% 45% % o f ICO p ro d u ctio n 2015 /16 % r es p o n d en ts act iv e in o rigin
Sustainability focus and production volume
% of respondents active in sustainability in origin % of ICO production 2015/16
Potential
overlap
Potential
gap
WHERE
: summary of strengths and gaps
Strengths already achieved:
Several large origins show local ownership and
embed sustainability in business as usual, need
for temporary projects is decreasing.
Focus countries for sustainability are mainly
prioritized because of quality, potential
productivity increase and supply risks.
Interest in ‘new’ origins that have potential to
increase productivity.
Strong regional sustainability relations
between North and Latin America, and
between Europe, Africa and Asia building on
current supply and demand.
Large investments in all regions.
Gaps and challenges going forward:
•
Innovation budget is mainly focused on Latin
America. Budget per farmer in Africa is low,
partly attributed to economies of scale, but
also to low volume per farmer resulting in high
cost per MT which puts pressure on cost.
•
Discuss justification of current investments in
East Africa in relation to possible overlap,
efficiency and impact achieved.
•
Increase activity in origins currently left out
because of perceived difficulty to work there,
including Venezuela and West Africa.
Geographic focus follows flows of coffee and origin needs, with
risk of overlap in East Africa, and some origins left out
Sustainability challenges
Financing, strategy and impact measurement are current
challenges, respondents suggest a role for platforms
Financing our sustainability work
Developing an appropriate strategy for our sustainability work
Measuring impact
Executing our sustainability work
Collaboration in the sector
Communicating about our sustainability work
Learning from other sectors
•
Financing sustainability, developing strategy and measuring impact are the largest challenges. Most
respondents see a role for platforms to address these:
•
Explore pooling resources for cost efficiency by investing jointly via a platform or fund. Explore
carbon financing as a means of funding coffee sustainability programs. This is not currently on the
agenda in the platforms.
•
Develop a sector wide strategy and define contributions of different platforms and actors.
•
Develop a set of common indicators for outputs and impact. This facilitates individual
organizations in measuring their impact, as well as allows for comparison.
Source: interview and survey respondents Source: interview and survey respondents
Learning from other sectors Communicating about sustainability Collaboration in the sector Executing our sustainability work Measuring impact Developing appropriate strategy Financing our sustainability work
Sector organization
The coffee sector cooperates in a number of platforms,
partnerships and alliances
Global Coffee
Platform
Specialty Coffee
Association of
America
Sustainable Coffee
Challenge
Alliance for Coffee
Excellence
African and
Malagasy Robusta
Coffee Agency
(ACRAM)
African Fine Coffees
Association (AFCA)
Coalition for Coffee
Communities
Coffee & Climate
Coffee Farmer
Resilience Fund
European Coffee
Federation
Finance Alliance for
Sustainable Trade
Green Coffee
Association
International Coffee
Genome Network
International Coffee
Partners
National Coffee
Association USA
(NCA)
SAFE Platform
Specialty Coffee
Association of
Europe
Sustainable
Commodity
Assistance Network
World Coffee
Research
several national
coffee platforms
several non-coffee
specific platforms
Overlap in platforms
Global Coffee Platform
IDH
Sustainable
Trade
Initiative
(field level)
Specialty Coffee
Association of America
Sustainable
Coffee
Challenge
•
Interviewed respondents perceive a large
overlap, and “see the same people in different
settings”. This is likely within their own ‘circle’.
•
The overlap is visible but appears to be less
than expected:
•
GCP has largest unique membership.
•
Largest overlap in membership between
SCAA and SCC.
•
Also large overlap between GCP and
IDH, which is now formalized with the
merger to GCP.
There is less overlap between platform membership than most
respondents expect
13%
14%
6%
1%
2%
16%
8%
8%
0%
0%
0%
0%
0%
% of respondents member of this/these platforms
No memberships: 18% / Unknown: 14%
Overlap in platform memberships
Platforms are regionally organized
•
The perceived ‘Atlantic divide’ is visible in
platform membership and is in line with
current supply and demand relations:
•
Respondents in Africa, Asia and Europe
are more likely to be members of GCP
and IDH.
•
Respondents in North America are more
likely to be members of SCAA and SCC.
•
Respondents in Latin America adhere to
these platforms equally.
•
Common platforms appear to have a good mix
between value chain actors and the enabling
environment.
0% 20% 40% 60% 80% 100% North America Latin America Europe Asia AfricaPlatform memberships per region
GCP IDH SCAA SCC
0% 20% 40% 60% 80% 100% Non-value chain actors
Coffee value chain
Platform memberships per respondent type
GCP IDH SCAA SCC
Platform membership confirms the perceived
‘
Atlantic divide
’
which builds on current trade relations
Source: interview and survey respondents Source: interview and survey respondents
Feedback to sector organization
Importance of inclusiveness
•
Coordination, shared vision and interest,
learning, embedding sustainability in policy
and value chain
•
Importance of inclusiveness mainly
emphasized by NGO’s and large companies,
specifically in Europe
•
But: inclusive dialogue is time-consuming &
several respondents feel that producers and
governments are not sufficiently involved
Importance of ability to act
•
Commitment, innovation, scale directly visible
on the ground
•
Mainly emphasized by private sector,
specifically in North America
•
But: assumptions are made in order to act
quickly & specific interests may dominate
Respondents see large progress made in collaboration, but also
a tension between inclusiveness and ability to act
“We should not try to create another United Nations”
“Producers are not sufficiently heard”
Private sector and matchfunding
•
All types of actors use matchfunding grants
especially when reaching out to new farmers,
on average between 30-50%. Major part of
sustainability work is funded privately. This is in
line with the data obtained from major donors.
•
Certification has led to a business model for
sustainability based on premiums which are
commonly used to maintain existing programs.
•
Traders indicate that declining premiums are
insufficient to implement and maintain
outreach. Several respondents indicate that
certification has an impact but does not
address all needs.
•
Respondents indicate that budgets are not
sufficient to reach out to full value chain and
address issues beyond the immediate coffee
sector interest.
•
Other sources of funding are not yet common,
but some respondents are exploring
specifically carbon financing.
Private sector is financing major part of sustainability work,
matchfunding and certification premiums are common
29% 33%
48%
67%
0% 10% 20% 30% 40% 50% 60% 70% Other / own sources of funding
Public funding / grants Private funding: premiums Private funding: investment
% of respondents using this type of financing
Financing sources for sustainability
Coffee value chain Non-value chain actors
< 30% 30% - 50% 51% - 70% 71% - 100%
Public / grants contribution as % of total budget
% of respondents
Source: interview and survey respondents Source: interview and survey respondents
Estimated total sustainability investment
Implementation speed has increased, significant investments
still needed to reach all farmers and address wider challenges
•
Annual available budget of 350M$ represents 2% of
green coffee value, in sector with low margins.
•
A lot of work has been done since the 1980s, but we
are not there yet. At current implementation speed we
could complete outreach by 2045. Required budget to
completion (based on current practices) would be 4,1
bln$.
•
This can be adjusted up or down based on increased
efficiency, new challenges, new definitions of
sustainability and/or new findings about the size of the
producer population.
350 M$ 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% 0 M$ 50 M$ 100 M$ 150 M$ 200 M$ 250 M$ 300 M$ 350 M$ 400 M$ Estimated total annual budget % o f gre en co ff ee v alu e An n u al to ta l b u d ge tEstimated current annual budget for coffee
sustainability in relation to green coffee value
Annual private sector premiums paid Annual private sector budget (excl premiums) Annual other funding Annual donor budget
2.600 M$ 1.500 M$
Estimated budget needed to become a
'sustainable' sector in 2045
Implementation ($200/farmer) Research and innovation budget needed (50M$/year)Source: data provided by donors, public spending databases, Valued Chain Source: interviews, Coffee Barometer, Valued Chain
Source: data provided by donors, public spending databases, interviews, Valued Chain
0 10 20 1985 2000 2015 2030 2045 2060 2075 # farme rs (m ill ion s)
time to implement current sustainability approach/definition
Estimated time to become a 'sustainable' sector
At current implementation speed (350.000 farmers/year) At historical realized implementation speed (140.000 farmers/year) Producers reached to date
Ongoing efforts on financial constraints
Respondents are working on increasing available funds and
decreasing cost of implementation
Wider private sector
involvement and
investment
Increase commitment from stakeholders in large
coffee markets (e.g. Sustainable Coffee Challenge)
Reducing cost of
assurance
Standards collaboration reducecost of audits and traceability (ISEAL) Company own standards and auditing (various) Data-driven assurance (suggested) Regional assurance (suggested)
Pooling resources for
cost efficient direct
investment via a
platform or fund
Funding for research via a check-off program (e.g. World
Coffee Research)
Shared investment in baseline studies and
impact measurement (e.g. SAFE) Non-coffee specific investments in landscapes and communities (e.g. Coalition for Coffee
Communities)
National ownership and
investments
Farmer outreach via national extension services (e.g. Minas
Gerais Brazil)
Involvement of national research institutes for plant
material (e.g. Vietnam)
Coffee sustainability
outreach contributes to
climate action and can
tap into climate
financing
Carbon credits and loans (various)
Nationally Appropriate Mitigation Actions (NAMA) (suggested)
Monitoring depends on supply chain data
•
Cost and effort of impact measurement are
given as a main challenge.
•
Current impact measurement mainly based on
activity outputs: farm data and traceability.
This quantitative data is collected within the
supply chain, often in relation to certification.
•
Programs are evaluated annually but not
always with a baseline. Attribution is a
challenge, with rarely a control group in place
and very few longitudinal studies.
•
Currently impact measurement is mainly
driven by donor demands. Respondents
suggest these could be aligned.
•
Impact measurement is gaining interest.
Current workgroups exist within GCP, SCC and
COSA, as well as many individual organizations.
Some NGO’s and research institutes have
developed specific expertise in impact
measurement.
Impact measurement is not yet embedded in sector
sustainability work, mainly because of cost and effort
0% 10% 20% 30% 40% Control Group Outside Of Project
Structured Surveys Narratives Farm Performance Data
Coffee Traceability
% of respondents
Data collection methods
0% 10% 20% 30% 40% 50% Longitudinal Study After
Project/Program End End Of Project/Program Evaluation
Baseline Annual Progress Evaluation
% of respondents
Data collection frequency
Source: interview and survey respondents Source: interview and survey respondents
Lack of consensus on indicators
Different definitions for common indicators
# farmers/ # households reached % farmers reached by M/F by age <25/<30/<35 # / % coffee produced/ sourced sustainable/ certified/ verified in MT/ kg/ bags # yield / % increase per tree/ ha/
farmer in MT/ kg/ bags
Common indicators are not comparable, and mainly measure
coffee output and outreach but not impact
•
Even common indicators for outreach to farmers, inclusiveness, volumes and yields are used in different
ways and as such can’t be added up or compared easily.
•
A number of respondents are currently working on defining indicators, as well as several platforms
notably the Global Coffee Platform and Sustainable Coffee Challenge.
•
Most respondents agree that certification data provides a good starting point for measuring output.
Some respondents indicate that the IDH KPI framework is a good starting point, while others say this is
too much focused on output not impact.
0% 10% 20% 30% 40% Investments Inclusiveness Social Impact Environmental Impact Activities Performed Economic Impact Outreach Coffee Output % of respondents
Indicator categories
Output ImpactHOW
: summary of strengths and gaps
Strengths already achieved:
Collectively, the sector has a lot of experience
in developing sustainability programs.
Attributed to experience, most respondents
feel comfortable with communication,
collaboration and learning.
Existing platforms have trust of members and
overlap is less than perceived.
Certification premiums have allowed to
integrate sustainability in business as usual.
Annual available budget of 350M$ represents
2% of green coffee value, in sector with low
margins.
Indicators from certification and current global
programs are a good starting point in
developing indicators, and further
development and harmonization is underway.
Gaps and challenges going forward:
•
Ensure that variety in platforms does not lead
to a scattered approach by coordinating
between platforms. Balancing inclusiveness
and ability to act of platforms.
•
Develop a sector wide strategy and define
contributions of different platforms and actors.
•
Explore pooling resources for cost efficiency by
investing jointly via a platform or fund.
•
Explore carbon financing as a means of funding
coffee sustainability programs.
•
Align different initiatives that are developing a
set of common indicators for outputs and
impact. This facilitates individual organizations
in measuring their impact, as well as allows for
comparison.
Whereas collaboration on strategy and impact measurement is
recognized as a need, funding is still a less visible challenge
A reliable catalogue but not exhaustive, as input for further
sector discussion
•
Study summarizes the current initiatives in coffee sustainability. This is on overview of what we are
currently implementing. It does not specify what the agenda forward should be, this is up for sector
discussion.
•
Study has focused on organizational strategies not individual projects.
•
Findings are based on a sample of respondents from the membership and network of the organizations
in the steering committee that were willing to provide input. The overview is not exhaustive. The
participation of respondents is however sufficiently large and representative to allow for interpretation.
We have consulted 36 respondents in interviews and 51 organizations participated in a survey.
•
Perspectives from producing countries are possibly underrepresented following the membership and
network of the steering committee, and the decision to conduct this study in English only. Any bias is
mentioned in the applicable section of this report.
•
Historical data on investment, output and impact is rarely available. Furthermore, most sustainability
work is done in partnerships of public and private organizations who all report on investment and
outreach, so there is overlap in the numbers reported. We have used mainly data from donors and
roasters. Donors and roasters most commonly collect data, and partnerships rarely contain more than
one donor and more than one roaster.
Appendix A: current initiatives framework: overview of current
sector strategies
Appendix A: current initiatives framework: overview of current
sector strategies
•
Current initiatives framework
•
Current collective desired impact
•
Insights into outcomes
•
Categories of activities
•
Analysis of dependencies and assumptions
Current individual sustainability strategies and theories of
change are classified in a theory of change framework
WHAT
Activities taking place can be categorized in
enablers (create a context that facilitates sustainability)
and implementation (direct activities aimed at
reaching out to farmers and production areas), each
actor has their own strength and focus
WHY
Stakeholders are motivated by different things.
The relation between WHAT and WHY is based on a
number of assumptions.
Assumptions and dependencies
Implementation
Outcomes
Impact
Current initiatives framework
WHAT
/ Activities
WHY
/ Motivations
Current individual sustainability strategies and theories of
change are classified in a theory of change framework
Implementation
Outcomes
Impact
Enablers
Policy / law Research Sustainability definition Platform Extension Business support Social and community Disaster reliefDiversified farm & household Access to inputs
Access to finance Logistics
Incentives
Traceability & assurance Value addition in origin Demand generation Yield / productivity Quality Cost Price Resilience Cashflow Market access Inclusivity Labour conditions Profit ab ilit y
Prosperity and well-being of producers
Forest, water and soil conservation
Sustained supply of coffee
Ecosystem services Green house gas reduction