2030

2027
CoffeeBarometer
2025
2024

2023
2022
2021

		Content
1

Introduction 2

2

Consumption and profitability 5

2.1 		 The lockdown 6
2.2		 Consumption patterns 6
2.3		 Roasters and revenues 8

3

Production and marginalisation 11

3.1

The pandemic 12

3.2

Production and trade 12

3.3 		

Income and value distribution 16

3.4

Social marginalisation 18

3.5

Climate change 19

4

Private Sector self-regulation 21

4.1

Corporate accountability 22

4.2

Voluntary Sustainability Standards 23

4.3

Transparency and accountability 26

4.4

Regulating tropical commodities 28

5Multi-stakeholder decade of deliverance 32

5.1

Multi-stakeholder collaboration 33

5.2

Private sector participation 35

6Conclusion 40

		Endnotes 44		Sources 46
		List of abbreviations 47
		Bibliography 48
		Colophon 52

Climate
resilience
CoffeeRegenerative
Barometer
agriculture
Living income
In fond memory of ourfriend and colleague
Joost Pierrot (1950-2020)

Sustainableconsumption‘Let me check the figures’

Shared value
Trade transparency

Sjoerd Panhuysen and Joost Pierrot

21Introduction
Although the constraints and potential
solutions are known, a widely agreed
strategy for achieving sustainable links
between coffee production and coffee
consumption remains elusive.

1

Introduction
The year 2020 has long captivated the coffee sector’s imagination as the culmination of the sustainability transformation process set in motion after the 2002 coffee
crisis. Over the past decades, development of sustainability solutions has been picking
up pace and is rapidly expanding in numbers, scope and global presence. In general, it
seems the constraints and potential solutions are known, but a widely agreed strategy for achieving sustainable links between coffee production and coffee consumption
remains elusive. This is due to the sector’s inclination to focus on continuous growthof production to meet global demand. This means that even if some specific gains areachieved at farm level, they are never sufficient to sustainably transform other links inthe value chain, like trade and consumption. This 6th edition of the Coffee Barometerreflects on how the coffee sector could create truly systemic changes that are sustainable and impactful, instead of limiting itself to only managing a confusing set of issues,
problems and contradictions.
While the Covid-19 pandemic has delivered the biggest and broadest value chain shockin recent history, it is only the latest in a series of disruptions that has exposed thefragility of the global coffee sector. Only a decade ago, the aftershocks of the global
economic crisis and the devastating spread of the plant disease roya in Latin America
created havoc in coffee communities. Extreme droughts in Brazil’s main coffee areas made headlines in 2016/17. In August 2018, the commodity futures price dropped
below US$1.00 per pound for the first time in twelve years (SCA, 2020). Alongside low
coffee prices, production costs for producers have also increased sharply since 2010,
further squeezing incomes (Sachs et al., 2019) Consequently, the livelihoods of coffee
producing households, the majority of which are led by smallholders in low- and middle-income countries, are increasingly at risk (ICO, 2019b).
The last decade was the warmest in recorded history, and globally governments andindustry leaders are increasingly under pressure to seriously commit themselves to theParis Agreement as well as the UN Sustainable Development Goals (SDGs). Persistenceof the consequences of climate change is a certainty and remains the defining issue inthe coffee sector. Still, players and stakeholders in the coffee sector are increasingly
aware that we are way off track to meeting even the most basic economic, social andenvironmental goals.

3Against this background, the Coffee Barometer 2020 looks specifically at the role of themain private sector players. The coffee supply chain is closely tied to the top ten multinational roasters that represent over 35 percent of global trade in green coffee andengages millions of smallholders and workers. In the top 10 coffee producing countries,
we provide insight in the problems smallholder coffee farmers encounter in responding
to the global market structures. Contributing to the resilience of smallholder coffee
4

farmers is imperative to create a sustainable coffee sector. To understand the current
state of voluntary sustainability initiatives from roasters and traders, we take a closer
look at their main successes and failures.
More and more multi-stakeholder platforms are actively involved in shaping the dynamics of the sustainability debate and actions. While it is time to assess the achievements of both the Sustainable Coffee Challenge (SCC) and the Global Coffee Platform(GCP), new initiatives are also emerging. It is encouraging to see that these new initiatives challenge the sector’s conventional thinking. They foster establishing a ‘prosperous income’ in coffee producing countries, or they develop alternatives for the C-Pricemechanism, the coffee commodity market which every day determines the global priceof coffee (ICO, 2020b; SCA, 2020). The most radical idea is to create a “Global Coffee
Fund” in the range of USD $10 billion per year (Sachs et al., 2019).
The Coffee Barometer is not an academic exercise but rather a result from the sense ofurgency to shed light on the dynamics of the change process in the coffee sector andthe main sustainability trends in recent years. More in-depth sustainability discussions
might help us towards countering the negative trends and focus on actions with much
positive impact at all levels in the coffee sector.

Industry must take the first step,
however; they cannot expect others to
step in to save an industry that is notinterested in saving itself.
(Sachs, 2019)2
Consumption and profitability
The asymmetries in power andinformation among participants in the
global coffee market result in somestakeholders benefitting more thanothers; especially the coffee roasters
appear as the big winners.

5

2 Consumption and profitability
2.1

The lockdown
As an immediate effect of the Covid-19 pandemic, net imports of coffee in the European
Union (EU), United States (US) and Japan declined in 2020 compared to 2019. While theout-of-home market is confronted with huge revenue losses, players in the at-homemarket encounter significant value growth. Closure of horeca and many people working

6from home, boosted coffee sales in traditional retail and e-commerce. With consumers
stocking up on coffee, sales of coffee pods and retail packaged coffee soared worldwide. This resulted in mixed results for roasters, with those supplying retailers or selling
directly online performing much better than others who traditionally are more reliant on
the hospitality industry (Butler, 2020). With the global economy sliding into recession,
the big concern is that the increased at-home consumption will not be sufficient tocompensate for lost sales of the higher value out-of-home coffee products.
2.2

Consumption patterns
Europe is the world’s largest coffee consumption market region, followed by respectively Asia and Oceania, Latin America and North America. The International Coffee Organisation (ICO) reported in November 2020, that global consumption for the coffee year
2019/20 amounted to 167.6 million 60-kg bags of green coffee (ICO, 2020d). Respectively, Europe imported 55 million bags and North America 31 million bags in 2019/20(ICO, 2020d). In these mature markets, it is not the volume, but the demand for higher
quality coffee that will drive the future value of coffee retail sales. Other markets are
rapidly developing, which is good for the future of coffee: a diversified consumption
base benefits market resilience (see Box 1).
Coffee consumption and the prices that consumers are willing to pay, relate to the consumption occasion at home or out-of-home. Although figures vary by country, culture
and source, it can be assumed that between 65-80% of the world’s coffee consumption takes place at home (Samper et al., 2017). The at-home consumption includes low
value roasted brands, high quality packaged coffees, instant coffees and single serve
presentations (pods or capsules), as well as Ready to Drinks (RTDs). These coffee offerings are sold at very competitive prices at supermarkets, coffee shops and online, andhave a key influence in the global coffee value chain.
Away-from-home consumption may take place through coffee shops at higher pricepoints. The coffee shop segment is a high-visibility channel, although it only accounts
for a limited portion of overall volume. In this segment quality, differentiation and consumer experience play a very significant role. The away-from-home locations accounting for the most substantial volumes are described as the foodservice channel, which
includes Office Coffee Service (OCS), Hotels, Restaurants and Cafeterias (Horeca),
Quick Service Restaurants (QSR) and other outlets selling or providing coffee in large
volumes such as airlines or hospitals (Samper et al., 2017).

BOX 1. The four major types of coffee markets (Barry, 2019):

1. Premiumisation-led markets: crucial in countries where population growth isslow and coffee markets are mature, like in Western Europe, North America andJapan. Volume growth is slow in these mature markets and there is an emphasis on
consumers switching from standard ground and instant coffee to pods and RTDs. In
this market, demand for quality is high. Nearly half of all value growth globally between 2018 and 2023 will take place in these countries as consumers trade up to
more expensive formats (eg. France, United States). The possibility of an economic
downturn poses a threat to the growth potential. A good example is the ongoing
uncertainty regarding the Brexit and United Kingdom’s future relationship with theEuropean Union, which frustrates the planning and investment in the UK’s coffee
shop market.
2. Income-led markets: these are countries where consumers are drinking morecoffee as their incomes rise, and where coffee shops play an important role as asymbol of entry into the global middle class. Asia and Eastern Europe have become
the focus of future growth for coffee shops: China alone will see more outlets addedby 2023 than every non-Asian region combined, both value and volume sales are
doing well here. This future coffee shop growth will be reliant on an expanding baseof consumers with increasing disposable income. On the other hand, one should consider that such markets are vulnerable to sudden macroeconomic shifts (eg. China,
Russia).
3. Population-led markets: In these countries growth comes from a rising numberof coffee drinkers. This benefits conventional formats as these markets offer limited opportunity to switch to coffee consumption. Consumers may want to trade up
but are often restricted by their incomes from doing so, which means that basic andaffordable formats like standard ground or instant are the key to the overall market(eg. Ethiopia, Mexico).
4. Soft driver-led markets: This market type is the least geographically consolidated compared to the previous three. Identified as countries where the coffee cultureis changing, thereby pushing the demand for coffee higher than would otherwise be
expected, soft-driver-led markets are scattered around the globe. Coffee is reaching
more consumers in these countries than before, because of coffee shop expansion,
new product launches and promotional campaigns (eg. Turkey, United Arab Emirates).
(After: Barry, 2019).

7

2.3

Roasters and revenues
A few very large roasters dominate the coffee market, all of which bar one have their
headquarters in Europe or the United States. Mergers and acquisitions in the industry– as addressed in the 2018 Coffee Barometer – continue to drive consolidation in themarket and increase market shares and value of these companies. This consolidationis also reflected by the fact that 86% of the total European Unions’ imports is roasted

8

in only six countries: Germany and Italy have the largest roasting industry, followed by
Spain, the Netherlands, France and Sweden. In general, these roasters have invested
heavily in diversifying their portfolio of brands and cover the whole spectrum of traditional roast and ground products, as well as a wide range of single-serve options, next
to espresso beans or low profile instant coffee (Panhuysen and Pierrot, 2018). They are
active at a global scale, and with their large portfolio of brands they are present in all
major coffee markets (see Box 2). Together, the companies in figure 1 are responsible
for roasting 35% of the world’s coffee, which generated an estimated US$ 55 billion in
total revenue in 2019. Some of these roasters have higher value shares compared totheir volume shares, which illustrates their dominant presence in higher value coffee
segments, like single-serve capsules or the out-of-home market. Roasters with the
opposite share equation usually have a product and brand portfolio competing at competitive prices levels, found in the roast and ground coffees segment.

Box 2: Roasters’ market developments

Nestlé Nestlé’s coffee-focused strategy appears to be stimulating growth in its
beverages category. The brands of Nespresso, Nescafé, Starbucks and Coffee-matecreamers count as key contributors to its sales increases and result in a global revenue of CHF 19 billion (Nestlé, 2019; 2020). In the first quarter of 2019, Nestlé successfully launched a new range of 24 premium coffee products under the Starbucks
brand, with mainly branded products in supermarkets and for its single-serve brewer
capsules. E-commerce is also playing a more significant role for coffee shops andretail packaged coffee companies. While Nestlé’s out-of-home businesses, including
its Nespresso boutique stores, have suffered a decline in 2020, its e-commerce sales
grew by almost 50% in the second quarter of 2020, reaching 1/8 of total group sales(WCP, 2020b). With many consumers viewing coffee pods as an economical way toreplace takeout coffee, Nespresso and JDE Peet’s are investing in coffee pods andcapsule production facilities in Switzerland and France to match the demand (WCP
2020c; 2020d).
JDE Peet’s End 2019, German-owned JAB Holdings announced to combine Jacobs
Douwe Egberts JDE and Peet’s Coffee to explore an Initial Public Offering (IPO) (JDE,
2019). Being the only big European IPO launched during the pandemic it raised strong
investors’ interest. The newly named company JDE Peet’s raised Euro 2.25 billion

at its launch on the Euronext stock exchange in Amsterdam. Based on the revenue
figures of 2019, JDE Peet’s is expected to have a combined revenue of approximately
Euro 7.8 billion a year. JDE Peet’s brand portfolio will offer consumers a broad rangeof choices that include traditional roast and ground coffees, soluble coffee, on-demand systems such as Senseo and Tassimo, and products compatible with otherpopular coffee systems. JAB Holding’s other crown jewel is Keurig Dr Pepper (KDP),
with KDP-manufactured single serve coffee pods currently representing 81% of US
coffee pod sales. The company entered into a licensing agreement with McDonald’s
to manufacture and distribute McCafé-branded coffee pods. In February 2020 it
signed a long-term partnership with Nestlé USA to manufacture and distribute Starbucks-branded K-Cup pods (FBN, 2020).
Lavazza In mid-2019, Lavazza entered into a partnership with Pepsico to launch apremium RTD coffee in the UK in mid-2019. As a result of its acquisition of two prominent self-serve and vending coffee businesses (Australian coffee pod firm Blue Pod
and Mars Drinks’ coffee vending machine business) Lavazza is seeking to consolidate
its reach across international retail markets as part of a growth strategy. The company announced strong annual results with a rise in revenues to €2.2 billion in 2019.
Recently, Lavazza announced a partnership with Yum China, with the intention toinitiate a Lavazza’s retail coffee shop model in China (WCP, 2020b).
Starbucks Starbucks is the leader in retail coffee, selling its products through morethan 32,000 stores in 83 markets around the world. In 2019, their beverages productcategory generated U$ 16.5 billion. Currently, the company is reporting significant
quarterly revenue losses after years of strong growth. The US and China are crucial markets for the Seattle-based firm, containing 61% of its global store portfolio(Forbes, 2020). While Starbucks dominates the US market, it increasingly faces
tough competition in international markets, including from Dunkin’, McCafé and Costa
Coffee, a subsidiary of The Coca-Cola Company and China-based Luckin Coffee.1 Dueto the effects of the pandemic, the rise of international chains such as Starbucks andCosta’s, might set to go into reverse in China, South-East Asia and Eastern Europe.
Recently, Starbucks announced it will be closing up to 400 stores in the US and up to
200 stores in Canada as part of its restructuring plans (WCR, 2020a)

JDE Peet’s Offer Price has been
set at €31.50, implying a market
capitalisation of €15.6 billion.
(Euronext, 2020)9

Figure 1: Top 10 roasters’ volumes and revenues, 2019

907

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$ 16

$

$

10

730

$

$

$

$

$

$

$

$

$

8.7

$

$

$

$

$

360

$

$ 2
310

$

$

$

$

$

282

$ 1
267

$

$

$ 2.5
195

$ 0.7
190

$

$

$ 3
180

$

$ 2.2
153

$ 1.3

x 1000mt$

x 1 US$ billion

US$ conversion rate 31.12.2019$ 19.5

3
Production and marginalisation
The coffee sector’s extractive model ofproduction -relying on rural poverty,
devalorised work and the depletion ofnatural resources- denies that a price has
to be paid for labour and land use at origin.

11

3 Production and marginalisation
3.1

The pandemic
While the effect of the Covid-19 pandemic on coffee production is yet to be determined,
it is fair to say it has increased volatility in the coffee market. Supply has been affectedby disruptions of logistics systems and international trade, as well as by labour shortages due to local lockdowns and other safety measures (ICO, 2020a). Coffee farming

12

families have lost income primarily due to disruptions of their non-farm businesses
and employment, coupled with difficulty in selling food crops. In countries like Brazil
and Colombia, workers in the coffee sector have been defined as essential workers who
must continue to work during the Covid-19 pandemic (Verité, 2020). In other countries,
the pandemic has reversed the tide of migration to rural communities as millions ofpeople (urban and migrant workers) have decided to return to their areas of origin. In theabsence of tracking, testing, and implementing quarantine regulations, this also meansthat it is likely to be a major contributor to the spread of the coronavirus, as has alreadybeen observed in India. In addition, field visits by extension services have been cancelledin many countries, thus reducing the farmers’ access to technical assistance in a timeof great need (Guido, 2020).
3.2

Production and trade
Coffee is produced on approximately 12.5 million coffee farms (Enveritas, 2018). The
structure and size of the farms varies by production country. Almost 95% of these aresmaller than 5 hectares, and 84% of all coffee farms are smaller than 2 hectares.2 It isestimated that smallholder farms produce up to 73% of all coffee, the remaining 27% is
produced by large coffee estates. Estates bigger than 50 hectares are only a common
feature in Central and South America (Enveritas, 2018). Figure 2 emphasizes the significant differences in the scale and context in which coffee is produced around the world
and is a strong reminder about the need for pre-competitive collaboration to address
the economic viability of coffee farming.
Amongst all coffee producing countries, Brazil is the largest origin for both Arabica andit Robusta varieties. The leading Robusta producer is Vietnam. In 2019 these two countries accounted for almost half of the global coffee production. World coffee production
in 2019/20 is projected at almost 169 million bags with a decline in Arabica output to
96 million bags, while Robusta production is expected to rise to 73 million bags (ICO,
2020e). Despite the pandemic, there are no serious coffee supply shortages reported in
the 2020 statistics. On the contrary: the projection shows a global surplus of 1 million
bags by the end of the year (ICO, 2020e).3 There is a widening gap between highly efficient producing countries like Brazil and Vietnam, which produce on average 1.5-2 metric tons of coffee per hectare, and nearly every other region in the world (WCR, 2020).
Just three countries are responsible for another quarter of the global coffee output:
Colombia, Indonesia and Honduras. This tendency – concentration of production – will
make future access to volume, quality and diversity of coffee increasingly vulnerable,

given the risk of climatic and geopolitical events.4 Figure 2 gives an overview of the top
10 origin countries, and include key Arabica producers like Ethiopia and Peru, as well as
important Robusta producers India and Uganda.
Most coffees from individual small farmers are blended and homogenised before
shipping, to comply with the quality definitions and standards set by clients in Europe or the US. A large proportion covers the demand for commercial coffee, which isaverage-quality coffee either for roasted or ground products and instant coffee. Large
coffee plantations and cooperatives are active as coffee exporters, but international
export-import firms dominate the trade. These international trade houses buy coffee
directly from farmers, cooperatives or local traders.
Only five companies handle a total of 62.5 million bags, an equivalent of half of the total
green coffee export production in 2019. In the last decade, Switzerland has emerged asa leading hub in the global trade of coffee, probably because of a combination of favourable tax and trade regulations (Public Eye, 2019).5 Most of the trade houses have theirhead office -or at least its trade administration office- in this landlocked country. They
typically buy future coffee contracts from suppliers abroad and resell them to clients
who are also abroad, meaning the coffee never touches Swiss soil. Like this, the members of the Swiss Coffee Trade Association (SCTA) handle a volume of more than 50% of
global coffee exports (SCTA, 2020).

Figure 2. Top 5 coffee traders

Neumann
Kaffee Gruppe

13

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

85%
Percentage
FOB price

Exportvolume20191700 kHa

35% 18/19
36% 10/11

smallholders

Arabica

40.7 mExport volume growth
2010/11 — 18/19$

281.100
Farms 14.000$ 5.1 bn

Brazil14

Export value 2019

9.9 m

Figure 3: Country overview – production, hectares, farmers

410 kHa
Robustaof world
production

$

$

$

$

$

$

$

$

$

$

$

$

$

88%
Percentage
FOB price

Export volume 2019

$

$

$

$

$

$

$

$

$

Exportvolume
2019

$

310
kHa

2.1 m

$

Arabica

930 kHa
Robustasmallholders

$

6.3 m

Indonesia$ 1.2 bn

7%
7%

18

/19

10

/11

of world
production$ 660 m
$

$

$

$

$

$

Exportvolume
2019

$

2%
3%

18

/19

10

/11

of world
production

Export value 2019
Export volume growth
2010/11 — 18/19

1.342.500

Arabica

Export value 20199%6%

smallholders

940 kHa

Export value 2019

Export volume growth
2010/11 — 18/19$- 0.2 m

$

18

/19

10

/11

of world
production$ 950 m
$

$

$

$

$

$

$

$

$

75%

$

Percentage
FOB price

Export volume 2019

342
kHa

Arabica4%3%Export volume growth
2010/11 — 18/19

$

1.9 m

$

120.400$

4.000 Farms
175.100 smallholders$

kHa

Arabicasmallholders

$

305

3.6

$

Guatemala

$

6.8 m

$

Honduras$

Export volume growth
2010/11 — 18/19

$

5.6 m

$ 2.6 bn

554.500$

13.7 mColombia

Export value 2019

18

/19

10

/11

of world
production

2.200.000

Export value 2019

$ 2.7 bn

95%

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

Percentage
FOB price

Percentage
FOB price385
kHa

Arabica$

227

Exportvolume
2019

kHa

kHa

Arabicasmallholders

Robusta

234

Export volume growth
2010/11 — 18/19

0.2 m
smallholders

18

/19

10

/11

of world
production

Export value 2019 in U$D
Export volume 2019 in 60kg bags x million

70%

FOB price in percentage paid to farmer
Arabica & Robusta coffee lands in kilohectares
Export volume growth in 60kg bags x million
Smallholders

/19

10

/11

4%
4%

18

/19

10

/11

of world
production$ 500 mUganda$Arabica5%
6%18

Export volume growth
2010/11 — 18/19

$

1.0 m

$

525 kHa

Export value 2019185.100

$

6.0 m

India

$

Exportvolume2019

Percentage
FOB priceof world
production$ 820 m$$$Export value 2019

$

$

3.9 m

Export volume growth
2010/11 — 18/19

2%
3%

$

$

$

$

$

$

$

77%
Percentage
FOB price

105

Exportvolume2019

Arabica245
Robusta3%
2%

Export volume growth
2010/11 — 18/19

Exportvolume
2019

$

2.1 m

$

$

70%

smallholders

$

$

4.5 m

$

85%

202.100$

smallholders

$

3.7 m

Peru

$

$ 740 m1.800.000

Export value 2019

$ 620 mof world
production- 0.08 m

Arabica

19% 18/19
15% 10/11

Export value 2019

Ethiopia

90

Robusta

15

Export volume growth
2010/11 — 18/19

600 kHa

smallholders

27.4 mVietnam

Exportvolume2019

600.500

11.3 m

$

18

/19

10

/11

of world
production

3.3

Income and value distribution
In the vast majority of producing countries, coffee is primarily seen as an export cash
crop. Around 75% of the global coffee production is exported to international markets.
This generated a total value of US$20 billion on average in the period 2015-2020(Samper et al., 2017). Figure 2 illustrates the exact export value per country in 2019.
Almost all coffee is exported as green unprocessed coffee beans. Roasters and retailers

16

in importing countries capture the largest share of the value addition (see figure 1). It isestimated that currently the average green coffee export value accounts for less than
10% of the US$200 to US$250 billion of revenues generated in the coffee retail market(Samper et al., 2017; Sachs et al. 2019).
For the most part of 2020, coffee prices have remained up to 30% below the average
price level in the past ten years (ICO, 2020b). Figure 4 illustrates the average of the
ICO composite indicator price in the last decade, in relation to the global production
and consumption of coffee (also see Box 3). Actually, this is the third year in a row thatcoffee farmers are experiencing a commodity price of coffee negatively impacting the
profitability of all producers (ICO, 2019b). At these low prices coffee production is not
economically viable for the majority of coffee farmers. Multiple factors can influence a
farms’ profitability, including farm size, exchange rates, labour costs, market access,coffee plant diseases, fertiliser costs, or lack of access to capital and insurance (Sachs
et al., 2019). Yet the impact is felt differently in the high-productivity countries where
the more productive farms remain profitable, compared to most of the other countries

If coffee were a product of thedeveloped world there would havebeen some price stabilisation
mechanism put in place or, at thevery least, there would have been
subsidies at low prices. (OLAM, 2019)

where producers are operating at a loss. This threatens famous quality origins in countries like Kenya, El Salvador and Mexico (WCR, 2020). Recent research in 13 countries
indicates that coffee producers’ average annual income decreased significantly overthe last 2 years (ICO, 2019b). As a result, the proportion of producers living below theextreme poverty line of US$1.90 per day has increased dramatically by as much as 44%
in Cameroon and 50% in Nicaragua. In 2019, with an average price of US$1.80 per kg ofgreen coffee, a Colombian producer with 4.3 hectares coffee land could only reach a living income with a production of 1.46 metric tons per hectare (Solidaridad, 2020). Even
under a very optimistic scenario with a simultaneous increase in yield and farmgate
prices, a producer with a small plot of land would not reach an income level above thepoverty line (TFCLI, 2020). The development of economically viable coffee production isvital to many countries’ efforts to combat extreme poverty (CABI, 2019).6 Although Africa accounts for about 10 percent of global coffee production, these figures understate
the importance of coffee production in terms of its contribution to a country’ GDP, rural
employment, tax incomes and export earnings. For instance, in Ethiopia and Burundi
coffee is the largest single exported product by percentage in 2019.7

BOX 3 Price of coffee: farmgate, FOB, futures, ICO indicator

Farmgate price: A farmers’ revenue depends on the quantities sold and the farmgate prices(volume x price = income). Farmgate price varies by variety, quality, and market destination.
Due to many reasons — low volumes, poor market information, lack of infrastructure —producers are predominantly price takers. The farmers’ revenue also depends on operating
costs, which often outpace inflation and the exchange rate of the local currency versus the
US dollar.
Free on Board price (FOB): Exporters sell green coffee on FOB prices to importers, supplying
qualities graded according to business specifications.
Futures price: The coffee futures markets in New York (for Arabica coffees) and London (forRobusta coffees) project the future prices for standardised coffee qualities. This is a classic
method for pricing commodities and reflect the estimated availability and demand of coffee
of the Arabica or the Robusta type.
ICO indicator price: For research purposes and to get a better overview of the worldwide pricedevelopment for coffee, the ICO indicator prices represent and track prices of four main typesof coffee qualities: Colombian mild Arabicas, other mild Arabicas, Brazilian and other natural
Arabicas, Robustas. Arabica coffees are generally perceived as a better quality product compared to Robusta coffees. This is also expressed in the Arabica price level leading to comparatively higher value of exports with Robusta coffees.

17

3.4

Social marginalisation
Coffee production is highly labour-intensive because most work is manual. Smallholder
farms employ farmers and their family members, as well as hired workers. Larger plantations employ many (seasonal) workers. It is difficult to pinpoint the total number offarm workers due to the rural and seasonal nature of the work and the widespread informality of employment.8 The allocation of tasks can vary by gender. A substantial partof weeding, harvesting and processing is often performed by women, while men are

18

more involved in pruning, application of pesticides and logistics. Coffee production andharvesting has several specific health risks, like injuries from sharp tools, injuries from
repetitive movements, lifting heavy loads, pesticide exposure or poisoning, respiratory
illness from exposure to coffee dust, and exposure to sun and heat (ILO, 2019).9
Labour is generally by far the largest expense and may account for as much as 60% of thetotal cost of coffee production. For example, labour accounts for 51%, 57% and 56% of total
costs in Colombia, Costa Rica, and Honduras respectively (ICO, 2019b; Solidaridad, 2019).
A notable exception is Brazil, which is characterized by a higher degree of mechanisation
and use of agro-chemicals (ICO, 2019b). Against this backdrop, production shocks reduce
worker productivity, and low and volatile prices in international coffee markets squeeze
grower margins that are already narrow. All this puts pressure on workers’ wages, quality

250

200
World
production

$
$

$

$
$

$

$

$

$

$

$

$

$
$

$
$

$

$

$

$

$

$

$

$

$

PRICE
$

2018

2017

2016

2015

2014

2013

2012

2011

100

$

$

$

$

100
2020

$

$

2010

PRICE in US$ cents/LB

150

$

$

150

World
consumption

$

2019

200

World production + Consumption in million bags

Figure 4: Production, consumption, priceof housing, food, and benefits. Child labour is prevalent in the informal coffee economy,
where children can easily step in as unskilled labourers. These children are likely to work onfamily farms and plantations, working alongside their parents either to supplement theirfamilies’ income, to help parents meet their production quotas, or because the children of
migrant parents have nowhere else to go during the day if they are not enrolled in school(USDL, 2020).10
3.5

Climate change
The growing economic inequality and deteriorating living and working conditions areaggravated by environmental problems and the impacts of climate change and thedestruction of biodiversity. As stressed by the UN Intergovernmental Panel on Climate
Change (IPCC), we only have 10 years left to stop irreversible damage from climatechange and embark on a track to meet the targets as set out in the Paris Climate Agreement.
It is well documented that climate change is increasingly impacting the livelihoods ofcoffee producers. For instance, coffee pests and diseases, which are already troublesome under the current climate, are aggravated by the effects of higher temperatures(Bouroncle et al., 2017). Also, coffee producing regions are increasingly experiencingchanging weather patterns, which for instance is exposed in countries like Honduras,
Nicaragua and Guatemala where a combination of droughts, hurricanes and the El Niño
phenomena are causing devastating impacts on communities (Germanwatch, 2020).
What is less well documented and reported is that changes to land suitability for coffee
production is increasingly driving deforestation and forest degradation in coffee landscapes. While to date coffee has played a relatively small role in global deforestation(compared to commodities like palm oil and soy or extensive cattle farming), climate
models and field evidence show that climate change will gradually drive production into
new areas that will become suitable in the coming years and decades. Expanding coffee
cultivation into these new areas – often at higher altitudes – threatens some of the lastintact primary forests on our planet as well as the irreplaceable habitats of particularlyhigh biodiversity value and may damage critical ecosystem functions. For instance,
according to the Peruvian national census, 25% of deforestation in Peru is linked tocoffee production due to abandoning of lands and subsequent expansion of agriculturalborders. In several coffee producing countries a large part of the projected suitable area
for coffee in 2050 is currently forested and often unprotected (SCC et al. 2019). However, detecting coffee-driven deforestation (especially when grown under the canopy)
has been proven difficult without eye-witness accounts by people familiar with specificlandscapes.

19

The growing global demand for coffee adds to this increased threat that forested
lands are being converted into crop land for coffee production (IDH, 2020). The business-as-usual scenario would require doubling or even tripling coffee production tomeet demand in 2050 (WCR, CI). This could mean an additional 10–20 million hectares
would be needed, if we cannot meet this growth in global demand on current coffee
lands. It is estimated that the loss of 10-20 million hectares of tropical forest results
20

in approximately 1.65 - 3.3 gigatons of additional carbon emissions. This will have adevastating impact, not only on the ecosystems and biodiversity, but also on the communities – and the industry at large – that rely on these natural resources for a resilient
coffee production. This scenario directly undermines the climate commitments andemission reduction targets of traders and roasters like Olam, Nestlé and Starbucks.11

4
Private Sector self-regulation
A switch from focusing on costs to values canpotentially ensure that sustainable development
issues are factored into business decision-making
on a more disciplined and systematic basis.

21

4 Private Sector self-regulation
4.1

Corporate accountability
A future in which coffee production, livelihood aspirations and climate change impact are accounted for, requires radical and systemic changes in the coffee industry’s
business model. The transition implies a shift of focus from costs to values. The specific22sustainability choices made by the main roasters and traders, with their global market
and supply chain power, deep pockets and lobbying muscle, could leverage investments
in line with their economic size and shareholder values (see Figure 1). Accountabilityof these companies, as drivers of the global coffee market, must extend beyond theirshareholders and consumers, to include clear objectives for sustainable developmentin producing countries (Grabs and Ponte, 2019). The majority of roasters and tradersin this Barometer have publicly committed themselves to reduce, mitigate or eliminate their negative social and environmental impact -or even to contribute to positive
societal change- in their supply chains. They have adopted a combination of voluntarily
sustainability strategies, which help to reduce regulatory risk, fill a policy vacuum, meetstakeholder expectations, protect their brand and reputation, or differentiate themselves from competitors (Bager and Lambin, 2020).
In this context it is important to reflect on the coffee industries’ contribution to two
post-2015 agendas for action: the Paris Agreement and the UN 2030 Agenda for
Sustainable Development. Together they provide the international framework forsustainable development under a changing climate. Achieving the primary goal of theParis Agreement - to keep the average global temperature rise well below 2 degrees
Celsius and as close as possible to 1.5 degrees Celsius (above pre-industrial levels), is aprerequisite for sustainable development.12 Climate change adaptation and mitigation is
also reflected in the SDGs, which were agreed on by the UN member states, civil society
and the business community in 2015. As a complex set of 17 goals and 169 targets,
the SDGs created a blueprint to achieve a better and more sustainable future for all by
2030. For instance, the SDG 12 agenda promises “fundamental changes in the way that
our societies produce and consume goods”. In other words, the production and consumption of sustainable agricultural commodities will only materialise with the direct
engagement of the private sector (ICO, 2019a).
In many coffee producing countries, multinationals rather than the national government are significant for compliance with SDG requirements in coffee sector planning
decisions. With agriculture on the top of international development agendas, there areopportunities for producers to gain real benefits from the growing demand for sustainable coffee. These policies shape the availability, as well as the distribution, of financial
resources that directly or indirectly impact sustainable development. At the same time,
there is also the risk that poorly designed sustainability policies and business strategies
will only cover up a ‘business as usual’ approach.

4.2

Voluntary Sustainability Standards
Voluntary Sustainability Standards (VSS) in the coffee sector are key elements ofcorporate sustainability and CSR strategies across the coffee industry. VSS have a long
history and promote better conditions in international trade and production. Althoughcontent and scope vary, they all aim to offer guidelines for producing, selling and purchasing coffee identified as “sustainable”, “responsible”, “ethical”, etc. They can differ
on a great number of characteristics, such as standard criteria, audit methodologies
and consumer marketing. The main sustainable coffee production standards present in
the market are: 4C, Fairtrade, organic, Rainforest Alliance & UTZ, and the private sector
standards of Starbucks’ C.A.F.E. Practices and Nespresso’s AAA Guidelines. The VSS
are constantly updated by periodic reviews, so it remains difficult to make a general
assessment of their results over time as well as understanding the impact of multiple
certifications at farm level. The merger of Rainforest Alliance and Utz led to the development of a new Sustainable Agriculture standard in 2020, which focuses more on
continuous improvement at farm level, in combination with a data driven and contextualized approach (Rainforest Alliance, 2020). Fairtrade International is in the processof revising its coffee standards and will probably release a new version by mid-2021(Fairtrade, 2020). 4C Certification presented its revised standard system, applying
new audit risk assessment procedures and a strenghtened compliance and integrity
programme (4C, 2020). In addition, a new VSS, Enveritas, has emerged which harnesses the power of machine learning and “big data” in an attempt to build a larger scale
solution (Enveritas, 2020). While several roasters and traders developed or expanded
their in-house verification systems, an important distinction needs to be made between
the assurance systems that provide independent third party auditing or basic company
schemes which essentially ‘mark their own homework’ (see Box 4).
The market credibility of VSS relies heavily on “the assumption that training of farmers
in good agricultural practices (intervention) leads to higher yields and better quality
products (outputs), which results in increased productivity and profitability (outcomes),
ultimately improving incomes and livelihoods for certified farmers (impact)” (Bitzer,2019). Fairtrade and Rainforest Alliance have received most academic attention whenit comes to impact measurement. In contrast, 4C and the private sector standards
have remained largely understudied. The studies emphasize that impact is highly
context dependent, shaped by how production is embedded within local landscapes,
supply chains and social systems (Oya, 2018; Neilson, 2020). Although this seems likean obvious observation, it actually points to the importance of studying the relative
contribution of certification to promoting sustainable livelihoods of producers. Available
evidence suggests that coffee certification can have moderate positive effects (Giuliani, 2017; Kathryn, 2016; Oya, 2018). In several cases, the adoption of sustainability
standards leads to an increase of coffee price levels, which is also the primary incentive
for farmers to enroll in certification (Oya, 2018; Tayleur, 2018). However, higher prices
do not necessarily translate into higher incomes, considering the cost of certificationand compliance, and many studies only find marginal improvements (Neilson, 2020).

23

Figure 5: VSS production and demand: 2013 / 2017 / 2019

145

440

192

560

24

307

770

133 249
160

370

252 412

168

455

230

558
394

670

224

727
859

365
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1084

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2228

536

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594

1607

170 300
285 400
310 450

55 75
77 10087 115Figures are not adjusted for
double or triple verification/certification

2013

x1000MT20172019certified/verified Total certified/
actually sold part verified produced

Figure 6: VSS procurement by roasters

606

153

36
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730

907

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310

11

2

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36

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volume certified/verified

conventional

Total
x 1000 MT

Environmental impacts seem to be clearer, with studies reporting some positive environmental effects of organic and Rainforest Alliance certification and improved use ofagrochemicals and water resources (DeFries, 2017; Haggar, 2017).
Overall, the results of academic studies indicate that the implementation of VSS is not
an adequate solution to improving the incomes and livelihoods of smallholder farmers.
Figure 5 illustrates that all VSS have managed to grow their volumes of certified coffee

26

at farm level. But the rapid growth rates have slowed down, while in some instances
there is even a noticeable decline in volume. The total volume in 2019/20 covers 55%
of global coffee production (this figure is not adjusted for double or triple verification/
certification). Despite this impressive figure, the direct benefits to farmers -like pricepremiums or access to new markets- are limited by the extent to which markets absorb
the total volume of certified coffee. This is a critical factor: in 2019 less than 25% is
procured as standard-compliant coffee by the industry. In other words: 75% of coffee
is still sold as conventional coffee. It does not help that roasters’ long-term purchasing
commitments are unclear and VSS lack the capacity to manage the supply of certified coffee. The consequence is a decline in both price premiums and the volumes ofcertified coffee producers were able to sell. This loss of differentiation potential negatively impacts the profitability of certified producers who made upfront investments forcompliance. It reduces their financial capacity and motivation to invest in continuous
improvement practices.13
4.3

Transparency and accountability
There is growing consensus across the industry as well as in civil society that procuring certified coffee alone is not enough to address the sustainability challenges in thecoffee sector. Looking at the limited market share of sustainable certified coffee, theprivate sector aspires other ways to capture and monitor the envisioned transition to asustainable coffee sector. However, all of the adopted governance mechanisms by coffee companies have one thing in common: they generally depend on voluntary (versus
regulatory) measures to ensure disclosure of information. The latter is particularly important to understand the continued lack of transparency regarding many dimensionsof commodity production, trade and consumption (Gardner et al., 2018). Transparency
is a crucial element and critical to the credibility of any corporate sustainability strategy.14 While there is a minority of coffee roasters and traders providing comprehensive
Environmental, Social and Governance (ESG) related information, in general the quality
and comparability of the companies’ sustainability reporting is not sufficient to really
understand and benchmark their policy strategy (Bager and Lambin, 2020). Often there
seems to be no link between the identification of the main sustainability risks and working towards tangible results by combining VSSs, company codes of conduct and CSR
activities.15 Since there are different reporting frameworks and standards (eg. GRI, UN
Global Compact, etc.), companies still have the possibility to choose their sustainability
disclosures as they see fit (Fransen et al., 2019).

This lack of private sector transparency and accountability is also noticeable in several
multi-stakeholder initiatives (MSI) in the coffee sector, like SCC and GCP. For instance,
the SCC has been requesting its 160+ partners to publicly state and report their efforts through their online ‘Commitments Hub’. The Hub currently captures nearly 120
commitments, but these are mostly vaguely formulated and lack reporting on progress(SCC, 2019). In 2020, the GCP published its first ‘Sustainable Coffee Purchases Snapshot 2018’. In this publication, only five roaster and retailer members provide someinsight in the origins and volumes of their sustainable coffee purchases (GCP, 2020).
While the importance of increased transparency is widely shared across the industry,
the results of these sector-wide instruments are disappointing. Of course, the numberof companies publicly stating sustainability commitments and publishing CSR reports is
not a good proxy for the extent to which these commitments are being met.16 Furthermore, it is not about what is easy to monitor, it should be about what actually mattersand is relevant in the context of coffee production, trade and consumption. But what
is challenging about a sustainability focused analysis of the results, is that companies’
sustainability reports do not have to be compliant with a systematic set of shared andmeasurable standards (contrasting the procedure with their financial disclosures). To
address this, accountability to actually achieve reductions in climate risk, deforestation,
and an array of human rights will only be possible with clear and standard metrics inplace (COSA, 2020).

We are convinced that businessmust not be at the expense ofpeople and the environment.
To achieve this, we need a legal
bottom line for corporate due
diligence. Responsibility andsustainable management mustno longer be an option, but thestandard. (Tchibo, 2019)1727

In recent years, several attempts have been initiated to create sector-wide consensus
on sustainability indicators that can be used to report on achieved progress.18 In 2017,
the SCC and the GCP, rolled-out a ‘Sustainability Framework’ for the sector, which has
been updated and fine-tuned ever since (SCC and GCP, 2019). Surprisingly, none of thecompanies’ CSR reports refers to this Sustainability Framework to disclose their information. The private sector has actively participated in the design and formulation of thismulti-stakeholder effort to introduce a common language to navigate coffee sustain-

28

ability. It would be reasonable to expect an active contribution of companies to create
clarity on their individual progress in any of the “15 Intervention Pathways” and related
SDGs. To enhance transparency and accountability and to stimulate the discussion, figure 7 presents our findings in the 15 priority sustainability topics and related SDG goals
and targets. The SDGs are fueling demands for impact data. Simply ticking the boxes
and linking corporate responsibility activity thematically to the SDGs is not sufficient.
The point is to know how companies are contributing to achieving the goals and what
the actual impact of their contributions is. Similarly, as a sector we need to know how
company activities are exacerbating the challenges the SDGs seek to solve, and whatthat negative impact is in real terms. Doing so at sector level would allow every company to demonstrate clearly how their own actions contribute to achieving the SDGs
and benchmark their success rate to that of their peers. It is not just civil society andNGOs that want this information; institutional investors are also exploring how they canalign their investment policies with the SDGs. Such investment strategies will inevitably
require impact disclosure from business (PWC, 2018).
4.4

Regulating tropical commodities
The voluntary approaches to responsible business conduct and addressing sustainability challenges in company supply chains have clear limitations. Concerns include
limited impact and market uptake, and lack of a level-playing-field across the market.
Increasingly, governments, civil society, but also companies, investors and businessgroups have recognized the need to complement voluntary approaches with regulations. In Europe this process accelerated and governments have put in place – or are
actively exploring – regulations to address issues such as human rights violations anddeforestation in supply chains. Examples include the UK ‘Modern Slavery Act’ (2015)
and the French law on the ‘duty of vigilance’ (2017). The latter requires parent companies to identify and prevent the potential negative impacts on human rights and theenvironment of their activities and of their subsidiaries’ and suppliers’ activities. Anotherexample is the Dutch ‘Child Labour Due Diligence Act’ (2019) which makes it obligatory
for companies to prevent child labour in their supply chains. The UK introduced a due
diligence law on forest risk commodities to prevent large businesses to source and use
commodities that have not been produced in compliance with local laws in producer
countries. In Germany and Switzerland, the introduction of similar legislation is in anadvanced stage.

Meanwhile, the corporate sector itself is asking for clear rules. In September 2020, 26
companies issued a joint statement calling for EU-wide, cross-sectoral mandatory human rights and environmental due diligence legislation. Nestlé is one of the signatories,
as well as Tchibo and Paulig (BHRRC, 2020). At the European Union level, the European
Commission (EC) is committed to proposing a legislation on sustainable corporate governance in 2021, including mandatory human rights and environmental due diligence. In
parallel, the EC will also develop a legislative proposal to prevent market entry of products associated with deforestation or forest degradation in the EU in 2021. This is as a
key measure to implement its plans on ‘Stepping up EU Action to Protect and Restore
the World’s Forest’. A total of 15 (non-exclusive) measures are currently being assessed,
including mandatory due diligence (RBC, 2020). This future legislation is likely to cover
key commodities such as coffee, cocoa, palm oil and soy.19

Box 4 Overview companies’ sustainability strategies

As the governance mechanisms to address economic, social, and environmental consequences of coffee production, trade and consumption have expanded, so have demands on
the quality of reporting.20 The SDGs are fueling demands for impact data. Simply ticking theboxes and linking corporate responsibility activity thematically to the SDGs is not sufficient.
The point is to know how companies are contributing to achieving the goals and what theactual impact of their contributions is in practice. In our research we use a combination ofsources to assess the strategy and progress of each company: documents published bycompanies relating to their sustainability and sourcing activities in 2019 and 2020, recent
companies’ sustainability reports (if available) and/or sustainability sections on their websites. We invited all companies to share additional information to critically examine the link
between their identification of sustainability risks and tangible results of the combination ofcompany codes of conduct, certified coffee procurement, CSR projects, and other pathways
to sustainability (Coffee Barometer Private Sector Questionnaire 2020).21
Based on market size in coffee volumes and value, the 15 companies in our overview are theleaders in the coffee sector’s roast and trade segment. All of them publicly agree on the factthat they have to play their part in the transition to a more sustainable coffee sector. It would
be reasonable to expect an active contribution of all these companies to create clarity on
their individual progress in any of the Sustainability Framework “15 Intervention Pathways”
and related SDGs. To enhance transparency and accountability and stimulate the discussion,
figure 7 presents our research findings.

29

Figure 7: Sustainability Framework SDG overview

Improve well-being &prosperity

30

SDG number

JDE Peet's
Lavazza
Massimo
Zanetti
Meiltta
NestleSmuckers
Starbucks
Strauss

1

2

3

4

Conserve nature

Resilient supply
strengthenmarket demand

5

8

6

7

13 15

9

12

•
• • • ••• • • • •• • ° • • • •
•

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••••••••••••°• • • • • • • • • • • •
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Tchibo

°

°

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°

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UCC

•

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Improve well-being& prosperity

Conserve nature

Resilient supply

strengthenmarket demand

PATHWAYS

SDG

31

Gender / youth /indigenous peoples
Education / health
Labor conditions

Climate changeStandards / certification

Water conservation

Producer country policy

Forest conservation /Access to financeSourcing policies

Access to inputs

Consumer country policy

restoration

Consumer education /awareness

Renovation

Explantion

Technical assistance

Ensure coffee contributes to improved
income and profitability
that advances sustainable development
opportunities for coffee
growers, workers andtheir families.

Conserve primary andsecondary forests, highconservation value
areas and other natural
resources for enhanced
coffee production

Implement sustainableagricultural practices tosustain supply and enable the sector to meetrising consumption andthe growing demand forcoffee in a socially andenvironmentally responsible way

Promote, support andinvest in context-relevant and specific interventions that provide
the necessary incentives and shared value
throughout the supplychain

1 2 3 4 5 8

6 7 13 15

9 12

9 12

• Not mentioned : No information available° Exploration : Public reference to SDG••

Exposures, risks & opportunities: Contribution to specific SDG
Goal setting & integration : Prioritisation, specific goals related to SDG,
SDGs integrated into strategy and investment decisions		Measurement : KPIs on the SDG related goals

32

5Multi-stakeholder decade of deliverance
While the collaborative efforts that drive
the adoption of sustainability in the coffee
sector must be embraced, it is time toask ourselves two questions: who sets
the agenda and do their priorities andmethodologies lead to positive results?

5 Multi-stakeholder decade of deliverance

5.1

Multi-stakeholder collaboration
In a decade, the mindset and organisational capacity regarding coffee sustainability has
improved in many ways. Several multi-stakeholder initiatives (MSIs) emerged as promising efforts to addressing complex sustainability challenges. Institutional guidance andcoordination is for example provided by MSIs like the GCP, SCC, ICP or SAFE. These MSIs
involve a wide range of stakeholders, including NGOs, retailers, roasters, traders, farmerorganisations and governments from both consuming as well as producing countries. Academics and other experts also contribute both directly and indirectly to the
MSI agendas. Moreover, the 2030 Agenda explicitly refers to the importance of sector
collaboration in ‘SDG 17 - Partnerships for the Goals’. By participating in these MSIs,
stakeholders acknowledge that business as usual poses a major risk to the industry andto the livelihoods of millions of coffee producers and their families. Engaged stakeholders commit to driving investment (ICO, 2020b).
The greatest challenge facing all MSIs is to incentivize companies to really collaborate
in a pre-competitive mode, thereby integrating economic activity in environmental sustainability, promotion of human rights and effective governance systems. To effectively
address fundamental issues like farm profitability, adaptation to climate change andsustainable coffee demand, the approach has to be both comprehensive - including thewhole coffee value chain- and forward looking, setting out long-term as well as shortterm objectives. Despite their potential, MSIs face many challenges (Dentoni et al. 2019;
Lambin et al. 2020). For example, the difficulty to align differences in interests andpower between members, the limited availability of resources to plan for the long-term,
and a fundamental lack of industry investments to meet the ambitious agendas andvisions for sector transformation (see box 5).
Even though stakeholders might share a general understanding of the key challenges
and constraints facing the sector at different levels and in different countries, it is muchharder to agree on the actions needed to overcome them, along with the respectiveroles, responsibilities and investments of stakeholders (Dentoni et al. 2019). Although
there may well be groupings of ‘like-minded’ stakeholders who share a common
agenda, it is a mistake to assume homogeneity within any of the coffee MSIs, as there
can be much diversity in perspective. While the urgency to act is high, the slow paceof decision-making causes frustration and significant delays. The constant search for33

consensus between stakeholders is limiting the effectiveness and scope of sustainable
policy design and implementation in daily practice (van Hille et al. 2020). Paradoxically,
this has led to the initiation of even more collaborative efforts in the form of new MSIs or
working groups to advocate for specific themes. For instance, the World Coffee Producers Forum (WCPF) has urged international action to address the devastating effectsof the price crisis (Petrich, 2019). The SCA completed its 1-year Price Crisis Response
Initiative to understand and improve value distribution in the chain. The most recent

34

initiative is ICO’s ‘Coffee Public Private Task Force’ (CPPTF), which aims to find answers
to the coffee price crisis, by aligning the public and private sector (ICO, 2020b). Oftenthese thematic collaborations fail to attract investments to ensure follow-up activities,
for instance the Coffee Global Adaptation Plan (C-GAP) of the SCTA never materialised
after an initial feasibility phase (SCTA, 2018) The USAID funded Alliance for Resilient
Coffee (ARC) has supported the alignment of a climate focused NGO agenda and action
on climate adaptation by the private sector. With the completion of the work in September 2020, ARC ceased to exist. The collaboration has highlighted the importance of
supporting science based adaptation at farm level (ARC, 2020).22

GCP
SCC
SAFE
CPPTF
SCA
WCR
ICP/c&c♦ - ♦♦♦ - - ♦♦♦♦ - ♦ - ♦ - ♦ - - - ♦ - - - - ♦ - - ♦♦ - - ♦ - ♦ - ♦ - ♦ - - - - ♦ - - ♦♦♦ - - - ♦♦ - - - ♦ - - - - - - ♦ -Volcafé EDF

OLAM

NKG

LDC

ECOM

UCC

TchiboStrauss

Starbucks

Smuckers

Nestlé

Melitta

Massimo
Zanetti

Lavazza

JDE Peet’s

Figure 8. Corporate members of MSIs

⚫ ⚫ - ⚫ ⚫
⚫ - ⚫ ⚫ ⚫ - - - ⚫ - ⚫ ⚫ ⚫
⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫ ⚫
- - ⚫ - -Box 5 Sector visions

The Global Coffee Platform believes that the economic viability of coffee farming is key toensuring sustainable livelihoods in coffee producing communities throughout the world.
However, current and persistent low international coffee prices have caused severe damages
to the viability of sustainable coffee production and are harming coffee farming families. The
GCP calls for urgent global collective action to overcome this crisis which is threatening the
lives of millions of smallholder coffee farmers, the environment and the coffee industry itself(GCP, 2019). 23
International Coffee Organisation - Coffee Public Private Task Force, preliminary long-term
vision (2030): “A sustainable and prosperous future for coffee producers and the sector as awhole” (ICO, 2020c).
• Economic resilience and social sustainability• Environmental sustainability through sustainable production• Better balanced demand and supply, responsible consumption, and diversity of origins• Effective enabling conditions
Specialty Coffee Association - Price Crisis Response Initiative, vision: “A specialty coffee
sector that distributes value equitably, fosters resilient coffee farming communities thatare economically prosperous, and values diverse producers of differentiated coffees.” (SCA,
2020).
Sustainable Coffee Challenge has the vision to make coffee the world’s first sustainableagricultural product. Its ‘Collective Commitment’ includes short-term 2025 targets, andlong-term 2050 goals: (SCC, 2020b).
• Improve livelihoods and prosperity: Coffee farmers and workers achieve a living income
and living wage.
• Conserve nature: Secure at least 1.5 gigatons of carbon by restoring 2.5M of tree cover andconserving 5M ha of forest.
• Resilient supply: Ensure a sustained supply of coffee from a diversity of origins by doublingsmallholder production on existing area.
• Strengthen market demand: Transition the entire market to sustainable sourcing.

5.2

Private sector participation
In practice, all the members of these different MSIs are shaping the dynamics of thesustainability debate and subsequent sector wide actions. As noted above, we often
conveniently assume homogeneity within groups, but a closer look at the main private
sector stakeholders reveals their different strategic choices. Almost all participate inat least one MSI, which creates much overlap in the overview (see figure 8). The active
engagement of a member in the participatory processes of any of these MSIs will be

35

driven by their inevitable constraints on time and resources, strategic choices and thepotential level of influence on the agenda and its implementation.
These partnerships allow companies and organisations to pool their resources, shareknowledge and invest in joint strategies to address complex sustainability issues. Yet,the more these stakeholders collaborate on multiple sustainability commitments, the36

more they discover how much further they need to go to prepare for a sustainable future
which is totally different from the current industry’s focus on maximising exponential
growth. This is an important awareness and also an indication of the growing understanding of the key challenges and constraints facing the sector at different levels andin different countries. The next step is to agree upon the actions needed to overcome
them, along with the respective roles and responsibilities and required levels of investment of each stakeholder.
To date, all these partnership efforts have not significantly altered the coffee production, trade and consumption patterns. Sustainability decision making too often ignored
important political questions about who wins and who loses in the current context. For
example, policies to improve living income and living wage only recently started featuring on the coffee sectors’ development agenda. Given the many uncertainties like theimpact of climate change or the concentration of production in only a handful of countries of origin, stakeholders become aware that all current efforts are remote of what
is really needed to getting anywhere close to contributing to the 2030 SDGs. Although
the discussions in MSIs about the economic, social and environmental aspects of coffee
production and disparities in the distribution of costs and benefits are sincere, the bar
has to be raised significantly.

A ‘prosperous income’ will guaranteethat smallholder farmers have enoughearnings to enable them to progress inlife and remain in the coffee production,
ensuring that future generations willcommit to a future in coffee.
(ICO 2020b)

The ideas in Box 6 are just a reflection of the sectors’ maturing sustainability agenda.
Equally important is to understand how these ideas will be translated into practice. MSIs
have to intensify their processes of responding to these challenges, set the priorities
and ensure that action is taken at the appropriate level. After all, what is the point ofengaging in endless debates where stakeholders discuss the state of affairs sharing
documents and evidence if the end result is another MOU or press release, with noactionable consequences in fostering sustainability in the coffee sector?

Box 6. Out-of-the-box ideas

1. Prosperous income
In a press release in October 2020, the ICOs’ CPTTF initiative stated its commitment
to ensure that smallholder farmers will have a ‘Prosperous Income’ beyond covering
just their basic needs. The background materials provide an outline of a new vision
document and a 2020-2030 Roadmap. The CPTTF plans to foster initiatives that
promote a prosperous income for smallholder coffee farmers, their families and theentire coffee sector. More specifically, they commit to directly support living income
benchmark projects in 4-6 countries, which are to begin as soon as possible (ICO,
2020b).
Although the widely used ‘living income’ concept is disguised here as the undefinedconcept of ’prosperous income’, the ICO (governments) and its partners (private andpublic) herewith acknowledge their shared responsibility to take action at a large
scale. The idea is to collaborate and co-finance the establishment of Living Income
Benchmarks in at least 80% of ICO member producing countries by 2025, and 100%of ICO member producing countries by 2030.24 Actually, with the intention to achieve
closing the income gap for target producers in at least 50% of the ICO member coffee
producing countries by 2030.
2. Addressing price
Toward the end of 2018, the SCA initiated its Price Crisis Response Initiative (PCR) toaddress and understand the 2018 price crisis (SCA, 2020). Their intention is to guidethe industry towards the PCR vision: “A specialty coffee sector that distributes value
equitably, fosters resilient coffee farming communities that are economically prosperous, and values diverse producers of differentiated coffees.” The PCR recognisesthat the specialty coffee sector faces many complex and interrelated challenges, andthat the sector’s longstanding commercialization systems lead to entrenched inequities and unsustainable market outcomes. Identifying unequal value distribution asa root cause, the PCR has made a series of recommendations, proposed because of
their potential to induce long-term changes in the coffee sector. Their recommendations focus on the balance of ownership, finance, risk distribution, information access,and governance. The SCA plans to continue challenging the status quo, addressing

37

the creation and equitable distribution of value, by calling out problematic businesspractices in the specialty coffee sector (SCA, 2020).
One of the targeted practices relates to pricing. Even when producers sell high-quality coffees, or coffees produced under established certification standards, the lack of
relevant price information leads to a continued reliance on the C-Price as the starting
38

point for negotiations. This can lead to dampened prices for producers. Developing
and championing alternatives to commodity-based price references will allow sellers
and buyers to agree on prices that reflect the value that is inherent in the different
specialty coffees – prices that are able to cover production costs, living wages forworkers, and the risky investments that producers make on their farms and during
post-harvest processing. In this respect, the Specialty Coffee Transaction Guide,by Emory University, presents a valuable tool that might move the specialty market
away from the C-Price (Roberts and Trewick, 2019). Summaries of recent transaction
data based on actual specialty coffee purchases equip producers and buyers withmore appropriate reference points for their negotiations. Disclosing this data to all
stakeholders along the specialty value chain informs all and challenges the validity ofC-based price discovery. It also encourages market outcomes where prices reflect
and reward the non-commodity characteristics of different specialty coffees. As
price conversations and negotiations adjust to the revised information environment,
producers will receive payments that are consistent with the end value of their contributions. The 2020 Specialty Coffee Transaction Guide, which is based on more than
51,000 contracts and cover roughly 1.1 billion pounds of green specialty coffee valued
at more than US $2.1 billion, reports an overall median price of US $2.58 per pound in
the 2019/20 harvest year. This is down from US $2.75 in 2018/19, because of shifts
away from higher priced quality coffees toward lower priced containers of regularspecialty coffees. While these reference prices are more than double the prevailing C
price, it remains to be seen how many of the 51,000 contracts are able to cover living
incomes and wages.
3. Global Coffee FundThe proposal to create a ‘Global Coffee Fund’ stems from a landmark report issued
by the WCPF (Sachs et al., 2019). The research team of Columbia University andthe London School of Economics estimates the amount of money - required for thecoffee sector to make meaningful progress in line with the SDGs - in the range of
USD $10 billion per year. The Global Coffee Fund mechanism would be used to share
more of the risks—such as price risks and climate risks—that currently only farmers
take. The largest roasters, retailers, and traders should be both the forerunners incontributing to the fund, as well as the entities that contribute the most to fulfil theirco-responsibility for achieving a sustainable coffee sector. These activities could
include: providing income support to the poorest farmers during price crises; developing affordable insurance options and disaster relief funds to help farmers recoverfrom extreme climate events; and increasing training, improving infrastructure, andsupporting other approaches that enable farmers to be more profitable and resilient.
Additional funds from international donors and coffee- producing countries` could be
invested in social goods such as water, education and healthcare in coffee-producing regions. This pre-competitive sustainability fund could be modelled after existing
examples and potentially be operated by one or more of the existing coffee MSIs.
The proposal mirrors the scope and scale of sector wide transformation in the next
decade. The idea behind this fund is to fill critical financing gaps for sustainability
investments in coffee-producing regions and multiply the existing public-private
efforts in an effort to work towards the SDGs. It is the first time a serious price tag has
been put on the economic, social and environmental cost of coffee. Although coffeecompanies invest billions in the consumers’ end of the value chain, the quoted amountof US$ 10 billion has been met with skepticism in the sector. The idea to redistributevalue or reinvest profits at the farmers’ level seems still too far-fetched for moststakeholders.

39

40

6
Conclusion
Although our knowledge is often incomplete,there is a solid foundation to address the mosturgent issues and to try and test promising
options against a range of scenarios.
Uncertainty about the outcomes is not arationale for inertia.

6 Conclusion
The seismic shock of the Covid-19 pandemic broadly impacts the global coffee sector.
On the one hand, consider the coffee roasters with their big brand portfolios whosebusiness is flourishing through the overall surge in retail sales. Similarly, shopping haschanged, since many consumers now recognise the convenience of buying their coffee
online. On the other side of the spectrum, the closure of cafes and restaurants, as well
as offices has brought the out-of-home consumption to a standstill. A significant dropin travel and tourism challenges the business model of specialty coffee in the hospitality
industry.
At the production side of the supply chain, the pandemic has triggered a cascade ofdramatic effects that are likely to change rural coffee communities for years. Several
national coffee sectors have been negatively impacted in terms of employment, revenues, exports and domestic consumption. Moreover, as countries closed their borders,
producers were confronted with a lack of labourers. It put producers under pressure,especially smallholder farmers and coffee workers whose income, health and future
prospects is threatened.
The systemic cracks in the foundation of the sector are widening, since coffee producers have experienced dramatically fallen coffee prices for years. In 2021, world coffee
consumption growth is likely to slow, as the pandemic continues to put pressure on the
global economy and greatly limits out-of-home coffee consumption. As a result, 2020is likely to end with a production surplus, which may hinder a price recovery in the near
future. Many farmers already operate well below the poverty line, and even the mostefficient producers in Brazil and Vietnam report thin profit margins. At the current pricelevel, producers are under constant pressure to cut costs, especially those related tolabour or the environment. The livelihoods of coffee farmers are under pressure as farm
revenues decrease while costs for inputs and expenditures for food and non-food items
are on the rise. The living income gap for most small conventional producers (0.5 - 5ha) is only widening and technical assistance and price support will not be sufficient toaddress the root causes. This situation is aggravated by deforestation, the destructionof biodiversity and the impacts of climate change.
Although the outlook and specific sustainability priorities vary for individual origins, thedire situation in most producing countries shows a strong contrast with the booming revenues in the global coffee category. Revenues are highly concentrated in the41

consuming countries, where the lion’s share of the value is captured by the top ten
roasters, who combined receive US$ 55 billion in revenue. Roasters and retailers havesuccessfully positioned their different brands in specific market segments to capitaliseon the growing demand of consumers. Trends suggest that an increasing number ofconsumers is willing to pay a higher price for quality coffees. Next to greater interestin the origin of their coffee, many consumers are also driven by a sense of social and42

environmental responsibility that demands much more from the companies who own
the brands. In response, companies have adopted a variety of voluntary practices to improve the social and environmental management of their suppliers’ activities, like VSS,
company codes of conduct, CSR projects and participation in collective approaches.
However, consumers may fail to differentiate the relative merits and actual value of
VSS. Especially the difficulty to deliver on their sustainability promises reduces thecredibility of these systems. While the growth in available volumes of certified coffees equals the growth of production in the sector, the market uptake of independent
VSS is stagnating. In comparison to earlier years, the percentages of the total certified
volumes procured by the main roasters indicate a decline. Some companies are evensidestepping the established VSS for their complete portfolio and promote self-regulated company codes of conduct instead. The question arises as to whether thesecompany codes are a strategy to take back control - because of limited results of VSS- or an attempt to lower the cost of sustainable coffee by removing third party auditing. Overall, there is consensus in the sector that VSS alone are not enough, since thescope of sustainability issues -being adaptation to climate change, a more equal value
distribution, or ending human rights abuses- that are directly material to the operationsof companies is very wide.
In most coffee producing regions, multinational traders and roasters - rather than thenational government – are mostly instrumental for the sustainable governance of thecoffee lands. This underlines their critical role in addressing many of the most pressing
environmental stresses and social struggles identified by the UN SDGs. By realising thatany of these issues can negatively drive the companies’ risks and returns, the sense ofurgency to act should be high. Nevertheless, companies’ sustainability policies are still
isolated strategies, mainly highlighting issues they may feel compelled to work on in theform of CSR projects. While some individual companies are no doubt doing better thanothers and should be acknowledged for their efforts, the overall sustainability reports
outshine each other in formulating vague policies and their absence of any serious
attempt to share results of meeting specific policy targets is striking.
The sustainability projects at origin tend to focus on the expansion of coffee production at farm level. Even if some specific gains are made, they are never sufficient toproduce fundamental sustainable transformative effects at sector level. The underlying structures of the coffee trade system are not altered, let alone the very legitimacyof the corporate model itself, which relies on devalorised work and the depletion of

natural resources. This clash between the race to the bottom tendencies of international commerce and attempts to assert social and environmental accountability within
the coffee industry, causes ongoing struggle and contest. Hence, collaborative andpre-competitive approaches are seen as the potential answer to the shortcomings ofindividual efforts. Through knowledge sharing and a better understanding of collective
action, initiatives like the GCP and the SSC are trying to navigate the differing interestsof coffee sector stakeholders, while attempting to link these to the broader sustainability context. All the major coffee corporations are part of one or more MSIs, and thus havea major influence on global governance of sustainability policies and agreements. Since
most of these MSIs lack binding commitments, robust enforcement mechanisms andneed to survive on shoestring budgets, these partnerships are not capable of using theirfull potential. There is hardly any evidence across the coffee industry that the current
MSI commitments are actually translating into meaningful change at scale of some of
the most important indicators like income, labour standards or adaptation to climatechange.
To achieve the goals of the 2030 Agenda and to ensure the sector’s contribution to theParis Agreement, MSIs need to play a bigger role to find real answers to the collective
challenges. It requires companies to recognise their shared responsibility – especially infinancial terms – and addresses the root causes of all challenges with substantial levels
of investment in collaborative initiatives. In doing so, it is important to realise that thesolutions will not be the same everywhere and probably have to be found in a combination of voluntary and mandatory approaches. Companies will need to intensify theirvoluntary efforts and prepare for new government policies aiming to level the playing
field – particularly in Europe – and proof that their supply chains are free from any human rights violations, as well as deforestation.
Although our knowledge is often incomplete, there is a solid foundation to address themost urgent issues and to try and test promising options against a range of scenarios.
The coffee’s sustainability agenda is maturing, however, uncertainty about the outcomes is not a rationale for inertia.

43

Endnotes

44

1

Coca-Cola’s US$ 4.9 billion acquisition of
Costa Coffee is widely perceived as a strategic
move by the US beverage giant to develop
Costa’s extensive vending machine businessas well as branded retail coffee products(Coca-Cola, 2018).

2

Coffee farming tends to be a family business,passed on from one generation to the next.
In most coffee producing countries farms
are then divided into smaller parcels throughinheritance, resulting in a gradual decrease ofplot size over time.

3

Over the last decade, production of Robusta
increased to a level up to 43% of global production in crop season 2019/20 (ICO, 2020e).

4

Roasters require a diversified set of origins todevelop the blends they need. Greater dependency on fewer origins threatens an alreadyunstable market with the potential for evengreater price volatility due to disruptions in
supply (TFCLI, 2020).

5

The coffee handled by transit traders neverphysically enters Switzerland, thereby eluding
standard record-keeping by the Swiss Federal
Custom Administration. There are no centrallycompiled and reported statistics on the origin
and destination countries, quantity, quality,
applied standards, companies, or payments
and prices, etc. involved in the Swiss-basedtransit trade. Also, noticeably absent aresystematic public data on Swiss tax revenues
from the coffee sector (Public Eye, 2019). See
also the research agenda of traders as key
sustainability actors by Grabs & Carodenuto,
2020.

6 The Inter African Coffee Organisation (IACO)
has joined forces with the Centre for Agriculture and Biosciences International (CABI) andthe ICO to launch the US$ 950 million ‘Africa
Coffee Facility’ (ACF) to boost Africa’s coffeeindustry and achieve a 40 percent increase inhigh-quality exports worth $5 billion a year.
7

In 2019, the share of coffee as percentage of
all goods exported in Ethiopia is 26.75 percent
and in Burundi 24.54 percent, in Uganda it isgood for 14.38 percent, while in Honduras it
totals 10.88 percent (ICO, 2020f).

8 A research on coffee farm workers of 2016
estimate is illustrative for the lack of reliable
data: “The total number of farm workers
involved in global coffee production numbers
must be in the tens of millions.” (SCAA, 2016).
9 For instance, the Vision Zero Fund (VZF) of
the International Labour Organization (ILO)
brings together governments, employers’
and workers’ organizations, companies, andother stakeholders to jointly advance towards
the vision of achieving zero severe and fatal
work-related accidents, injuries and diseases
in global supply chains and is active in the coffee sector of Colombia, Honduras, Mexico andEthiopia (ILO, 2019).
10 The U.S. Department of Labor’s 2020 List ofGoods Made with Forced Labor and Child Labor
highlights 17 countries with child labor in coffee production, for instance in Brazil, Uganda
and Vietnam. Because of the pandemic,
greater informal employment coupled witheconomic hardship could push many children out of school and into the labour market(USDL, 2020).
11 At the same time, coffee also has the potential
to be part of the solution and avoid at least
1.5 billion metric tons of carbon emissions by
2050 through investing in Natural Climate
Solutions. i.e. the protection and restorationof tropical forests and other ecosystems andimproved management of agricultural lands.
Examples include the increase of tree cover,promotion of agroforestry as well as providing
coffee producers access to carbon markets
through the sales of carbon credits.
12 “The concept of sustainable development is
to foster an integral ecological and societal
fairness agenda. They are equally important,and mutually dependent and reinforcing:
it is about ‘planet’ and ‘people prosperity’”(Vermeulen, 2019).
13 An industry wide commitment to sharing
the cost of compliance with VSSs would be asmall but valuable gesture. Additionally, theactual uptake of standard-compliant coffee
by the industry has to increase, as well as thetransparent reporting of yearly volumes per
VSS (GCP, 2020).

14 Corporate transparency can be defined as
the availability of firm-specific information to those outside publicly traded firms. It
enables stakeholders to better understand theprogress of individual companies in advancing supply-chain sustainability. In the context
of corporate accountability, transparency
refers to the ability of businesses not only to‘know internally’ that they are exercising due
diligence but also to ‘show externally’ that thisis the case (Gardner et al., 2018).
15 To measure only what matters metrics have to
be formulated S.M.A.R.T. (Specific, Measurable, Actionable, Realistic, Time-bound)to help monitor performance and to foster
continuous improvement. Using indicators fora sustainability assessment helps to summarise, focus, simplify, quantify, analyse,
and report complex topics of sustainability.
KPIs are necessary to provide information,and they fulfil the following three purposes:
understanding the world, supporting decisionmakers, and planning actions.
16 For example, SDG Goal 12 Responsible
consumption & production - Indicator 12.6.1
Number of companies publishing sustainability reports (UN, 2015).
17 Full statement (09-12-2019): “Since 2006
Tchibo is in transformation into a socially andecologically sustainable company. We areconvinced that business must not be at theexpense of people and the environment. To
achieve this, we need a legal bottom line forcorporate due diligence. Responsibility andsustainable management must no longer bean option, but the standard. We have to raise
the bar in all sectors. In order to guarantee
human rights and protect the environment
globally, everyone must participate - notjust few pioneers. We need a critical mass inthe world of business to solve the pressing
global issues of our times quicker and more
profoundly.” (BHRRC 2019).
18 See also the Delta Project; GCP and the Better
Cotton Initiative collaborate to bridge the gap
in measuring and reporting sustainability performance across different VSS. https://www.
deltaframework.org

19 The proposed new legislation is part of theEC’s 2021 Work Plan and the European Green
Deal (EC, 2020).
20 Bager and Lambin (2020) analyse in-depth
how the coffee sector approaches sustainability by examining the sustainability efforts of arandom sample of 513 companies. A third ofcompanies report no commitment to sustainability, whereas another third report vague
commitment. The final third of companies
report tangible commitments to sustainability(Bager & Lambin, 2020).
21 www.coffeebarometer.org
22 ARC is funded by USAID and comprised ofseven leading partners; Hanns R. Neumann
Stiftung (HRNS), Sustainable Food Lab (SFL),World Coffee Research (WCR), The International Center for Tropical Agriculture (CIAT),International Institute of Tropical Agriculture(IITA), Conservation International (CI) and Root
Capital. www.allianceforresilientcoffee.org
23 It seems the GCP’s Vision 2030 has been
replaced by the partnership support of ICO’s
CPPTF, thereby acknowledging that the entire
global coffee sector bears responsibility tofoster the path towards a reasonable living
income for coffee producers, and to help ensure the economic viability of coffee farming
worldwide.
24 We assume this will be the Anker methodology– as proposed by the TFCLI (Anker and Anker,
2018).

45

Sources

46

Figure 1: Top 10 roasters’ volumes andrevenues Ranking companies by size is dependent upon the criteria used. There are two main
criteria to measure the size of a company, namely
market capitalisation and gross revenues. Market
capitalisation is a volatile estimate of a company
size, since it is based on the price of shares in thestock exchange. Conversely, revenues are morerobust as an indicator of company size since it isless subject to quick variations.
The 2019 revenue data for the ‘coffee beverages
category’ of each company is based on financial
reports and/or investor presentations available
in the public domain. The distinction between‘total global revenue’ and ‘coffee global revenue’of a company active in different categories is notalways clear, which led to estimates based oncompany data of: The J.M. Smucker Company,
UCC and Tchibo.
Source of the company size by coffee volume:
Coffee Barometer 2020 questionnaire to all participating companies and/or additional company
data.

Figure 3: Top 5 coffee traders
The data for this infographic has been provided by
the different trading houses.
Figure 4: Production, consumption, price
Data kindly provided upon request by ICO Statistics.
Figure 5: VSS production and demand
Data kindly provided by 4C CAS, Fairtrade International and Fair Trade USA, Rainforest Alliance,
Nestlé, Organic and Starbucks (the total volume of
Nespresso AAA and C.A.F.E. Practices is our own
estimation).
Figure 6: VSS procurement by roasters
Source of the company size by coffee volume:
Coffee Barometer 2020 questionnaire to all participating companies and/or additional company
data. Although KraftHeinz is a top ten roasterby volume (estimation), the company shares noinformation.

Coffee Board of India (2020). Database on coffee,
January 2020. https://www.indiacoffee.org/
database-coffee.html

Figure 7: Sustainability Framework SDG
overview We use a combination of sources toassess the strategy and progress of each company
in relation to the SDGs: answers to the Coffee Barometer 2020 questionnaire, documents publishedby companies relating to their sustainability andsourcing activities in 2019 and 2020, recent companies’ sustainability reports (if available) and/or
sustainability sections on their websites.

ICO (2011). ICO Annual review 2010/11. http://
www.ico.org/documents/annual%20review%20
2010-11e.pdf- SCC and GCP (2019). What if… all your coffee
was sustainable. https://www.sustaincoffee.org/
framework-detailICO (2020e). Coffee year production by country,
table 2. Data as at November 2020. http://www.
ico.org/prices/po-production.pdf

UN (2020). The 17 goals. https://sdgs.un.org/
goals

Figure 2: Overview of origin countries
2019 calendar year export volume and value kindly
provided upon request by ICO Statistics.

Enveritas (2018). How many coffee farmers are
there? Global coffee farm study. (Preliminary
draft).
SCC et al. (2019). Coffee production in the faceof climate change; 15 country profiles. GCP, c&c,
CI, IDH, SCA. https://www.sustaincoffee.org/
resources/

Figure 8: Corporate members of MSIs
Coffee Barometer 2020 questionnaire to all participating companies and/or additional company
data and MSI websites.

List of abbreviations
ARC
BHRRC
CABI
CB
COSA
CPPTF
CSR
EC
ESG
FBN
FOB
GCF
GCP
GCRI
GDP
GRI
HRDD
IACO
ICO
IDH
IPCC
IPO
MSI
NGO
NKG
OCS
PCR
QSR
RTD
SAFE
SCA
SCC
SCTA
SDG
TFCLI
UN
VSS
WCP
WCPF
WCR

Alliance for Resilient Coffee
Business & Human Rights Resource Centre
Centre for Agriculture and Biosciences International
Coffee Barometer
Committee on Sustainability Assessment
Coffee Public Private Task Force
Corporate Social Responsibility
European Commission
Environmental Social GovernanceFood Business NewsFree on Board
Global Coffee Fund
Global Coffee Platform
Global Climate Risk Index
Gross Domestic Product
Global Reporting Initiative
Human Rights Due Diligence
Inter African Coffee Organisation
International Coffee Organisation
Initiatief Duurzame HandelIntergovernmental Panel on Climate Change
Initial Public Offering
Multi-stakeholder Initiative
Non Governmental Organisation
Neumann Kaffee Gruppe
Office Coffee Service
Price Crisis Response initiative
Quick Service Restaurants
Ready-to-Drink
Sustainable Agriculture Food Environment Platform
Specialty Coffee Association
Sustainable Coffee Challenge
Swiss Coffee Trade Association
Sustainable Development Goal
Task Force Coffee Living Income
United Nations
Voluntary Sustainability Standards
World Coffee Portal
World Coffee Producer Forum
World Coffee Research

Green coffee conversion
1 bag = 60 kilogram
1 MT = 1,000 kilogram = 16,67 bags

47

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Citation: Panhuysen, S. and Pierrot, J. (2020):
Coffee Barometer 2020.
Text: Sjoerd Panhuysen - Ethos Agriculture
and Joost Pierrot - Consultancy.
Additional contributors: Stefaan Calmeyn - Oxfam Wereldwinkels,
Niels Haak - Conservation International, Saurin Nanavati - Ethos
Agriculture, Andrea Olivar - Solidaridad, Juan Pablo Solis - Hivos.
Editing: Pascal Kuipers and Tijmen de Vries - Schuttelaar&Partners
Design: Roelant Meijer - Tegenwind
Copyright: Attribution-NonCommercial-ShareAlike 4.0 International(CC BY-NC-SA) 4.0
Coordination: Sjoerd Panhuysen
and Frederik de Vries - Ethos Agriculture
Contact: CB2020@ethosagriculture.com
Print: on 100% recycled paper by Drukkerij Mostert
Published by the Coffee Collective 2020:
Conservation International, Hivos, Oxfam Wereldwinkels, Solidaridad
Expression of the authors: We appreciate the effort of companies
and standards bodies in answering our questionnaire. The report
combines data and analyses produced by farmer organisations,companies, governments, international organisations, civilsociety organisations and research centers. We thank all for theircontributions and collaboration in producing the report. Additional
background information and an overview of contributing organisations
can be found on the Coffee Barometer website. The final responsibility
for the content and the views expressed in this publication lies solely
with the authors. The authors welcome any corrections to the data
provided and challenge all actors of the coffee sector to be much
more forthcoming with public data on the challenges the sector faces.

This publication was made possible thanks to the financial support from: Belgium Partner in Development, the German
Federal Ministry for Economic Cooperation and Development (BMZ), the IDB LAB SAFE Platform, USAID. All views expressedin the study are the sole responsibility of the authors and should not be attributed to any other person or institution.

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