Coffee Roasters’ Sustainable Sourcing Decisions and Use of the Direct Trade Label

Gerard Gerard,Lopez Lopez,Mccright Mccright

doi:10.3390/su11195437

Abstract

This paper analyzes motivations for coffee roasters to source directly from farmers and how roasters decide whether to use the Direct Trade sustainability label. Direct Trade is an uncertified label connoting an approach wherein roasters negotiate coffee price and quality with farmers without intermediaries, with purported farmer income benefits. We examine semi-structured interviews with 11 US roasters and three coffee stakeholders to identify motivations to source directly, provide customers sourcing information, and use or reject the Direct Trade label. We find that roasters directly source coffee primarily for quality reasons and communicate about sourcing because they believe customers would value coffee more if they understood their sustainable sourcing practices. However, the lack of a clear definition for the Direct Trade label, coffee roaster concerns about the label’s utility, and the threat of “free riders” disincentivizes label use. Without a shared label, customers face high costs for information about directly sourced coffee, which may limit the expansion of a sourcing practice that could benefit farmers.

Highlights

While coffee is largely consumed in Northern countries, it is produced in equatorial countries, often by low-income farmers
Might a certification system help ameliorate these challenges? Given the structure of Direct Trade (DT)— a top-down sustainability label shared by numerous companies—we explore two possible ways of dealing with the label’s credence qualities: (1) third-party certification and (2) an agreed upon industry standard that roasters use to self-certify
We explored specialty coffee roasters’ motivations to (a) source coffee directly from farmers, (b) communicate about their sourcing practices, and (c) use or not use the DT label

Summary

Introduction

While coffee is largely consumed in Northern countries, it is produced in equatorial countries, often by low-income farmers. Numerous approaches to coffee sourcing standards aim to make the coffee industry more socio-economically and environmentally sustainable [1,2,3,4,5] These include well-known, third-party certified labels such as Fair Trade, Organic, and UTZ, which aim to improve farmer incomes, produce coffee without the extensive use of chemicals, and source coffee in a holistically sustainable manner, respectively [1]. They include non-certified labels such as Direct Trade. It has the potential for giving farmers an avenue into the specialty coffee market, which is more stable than the commodity coffee market and provides farmers with better prices [10,11]

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