September 1, 2021

Growing sustainability in the coffee supply chain

In recent years, sustainability has become something of a buzzword. In some cases, it’s easy to argue that this has caused its meaning and weight to become somewhat confused. Either way, it is becoming a tricky landscape to navigate for both businesses and consumers.

The coffee industry is no exception. As each day passes, it faces a growing web of environmental, social, and economic challenges that are putting the livelihoods of many and the future of the sector at risk. Enter “sustainability”: a way to spare the environment and reward stakeholders fairly, all the while creating a durable, thriving coffee sector.

But what does it really mean? And how can we become sustainable as an industry? To learn more, I spoke to Olivier Laboulle from Louis Dreyfus Company (LDC), Mario Cerrutti from Lavazza, and Dr. Martina Bozzola from Zurich University of Applied Sciences and Queen’s University Belfast. Read on to find out what they told me.

You might also like our guide to green coffee auctions.

coffee farmers sorting cherries

Defining sustainability

Before we can discuss the why and how of sustainability, it is crucial to first pin down its true meaning. The most frequently quoted definition is from Our Common Future, also known as the Brundtland Report.

The report says: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

While this summarises the essence of the word and its objectives, it remains vague. Sustainability is a concept that can mean different things to different people. So, I asked each of my three interviewees what it means to them. 

Olivier Laboulle is the Global Head of Sustainability for Coffee at Louis Dreyfus Company. He sees sustainability as a model of production and consumption that is financially profitable for all value chain participants, without negatively impacting people or the planet. 

“In agriculture, and coffee in particular, we have an opportunity to go beyond preventing negative impacts and actually repair damaged ecosystems,” Olivier says. “Imagine if each cup of coffee consumed around the world was actively contributing to the fight against climate change, for example.”

For Mario Cerrutti, Head of Sustainability at Lavazza, the word carries a weight of responsibility. “We need to be careful about creating any possible confusion,” he says. “When we tell consumers something is sustainable, what does it mean? We need to be clear about that and how we are achieving it.”

Finally, Dr. Martina Bozzola is an environmental economist at the Zurich University of Applied Sciences and Queen’s University Belfast. She is also a partner of the International Trade Centre’s Alliances for Action programme, as an expert in livelihoods and sustainability.

“To me, the first thing that comes to mind is the long run; the capacity to make a supply chain that can last,” she says. “It boils down to consistently engaging all three pillars of sustainability: social, environmental and economic.”

For example, if you carry out a project to maximise profit and use cheap production methods, you will most likely trade off by harming the environment and/or exploiting workers. This will be categorically unsustainable.

farmer holding coffee cherry

The gradual path to reforming a supply chain

Concerns about socioeconomic disparities and harmful environmental consequences in coffee production are not new. In the 20th century, the sector embraced a certain level of environmental sustainability through organic certification; ethical trade practices soon followed with the adoption of Fairtrade certification. 

This, in turn, has spurred the creation of other certification labels oriented towards sustainability through the 21st century.

Olivier tells me about the sustainability context in which LDC operates, looking first at when the company started trading coffee in Brazil in 1989.

“At the time, there was less consumer awareness about sustainability,” he explains. “The Rainforest Alliance had only just been founded in the US and coffee sustainability standards were relatively niche. It was mostly confined to a small number of devoted, activist consumers. 

“Today, sustainability is a minimum standard. It is estimated that more than a quarter of all coffee worldwide is produced according to a certification.”

While certifications can carry a host of issues, they do mark a formal step towards a global, collective push for more sustainable supply chains.

Mario recognises the positive change that has taken place over the years. However, he remains wary of issues that have persisted over time, despite stakeholders’ efforts. 

He points to continuous issues like low producer compensation, a lack of a living wage, and long-lasting difficulty in building knowledge and raising awareness about quality and socioenvironmental issues. 

“Climate change, pests, and diseases have increased,” he adds. “The suitable land adapted to production is decreasing, the generational issue is deepening, and the impact of unsustainable coffee production on our natural resources is problematic. 

“New challenges are not minor or less concerning than in the past, and neither should be our resolve to address them.”

coffee and other crops

Is there profit in sustainability?

Consumers are holding brands increasingly accountable for sustainability and fair trade as public awareness of these topics has shot up in recent years. This is thanks in no small part to social media and online platforms. This is driving change across the supply chain, as demand helps drive more respect for both farmers and the environment. 

But does it mean that brands can be simultaneously profitable and sustainable?

In recent years, we’ve seen that brands and manufacturers have identified sustainability as a form of marketing and a powerful means of product differentiation. This enabled them to promote sustainability and fulfil their corporate social responsibility objectives while also remaining competitive. 

Olivier says that going forward, companies who are unable to deliver on roasters’ sustainability commitments will be edged out. He notes that LDC is “proud to be part of this positive change in our industry”, and says that it will “benefit current and future generations of coffee growers, merchants, roasters, and consumers”.

For Mario, being sustainable is becoming a real competitive asset. But he notes that this change is “both good and bad”.

“The more competition there is, the more incentives there are to greenwash and mislead consumers with vague information,” he says.

He highlights the importance of leveling the playing field with a serious approach to sustainability and remembering the end goal: impact on people. 

“If you start out with competition and profit as your incentive or intention, it will be a disaster,” he says. “If nobody cares, why should people commit?”

bags of coffee stacked up

Is a shift from voluntary to mandatory due diligence a good thing?

For a while, supply chain sustainability has mostly been driven by consumer demand and voluntary standards. However, going forward, mandatory due diligence is likely to become more widespread. But is this a good thing?

On the one hand, it could help to mainstream sustainability across the sector.

“Having legislators set standards is helpful,” Olivier says. “It creates a level playing field and ensures all stakeholders are pulling on the same rope.”

For instance, in the EU, there has been a long-term debate around voluntary and mandatory due diligence rules. Companies that have implemented modern sustainability practices are increasingly calling for legislation, arguing that competitors should not get away with being unsustainable.

However, today, it’s clear that the coffee value chains supplying Europe will increasingly be influenced by the European Green Deal.

This is a growth strategy aimed at transforming the EU into a modern, resource-efficient, and competitive economy. It aims to create an inclusive, competitive, and environmentally friendly future for Europe through targeted strategies and mandatory due diligence. 

Ultimately, though, these new regulations will have both positive and negative impacts on the producer community. Martina stresses that accompanying measures will be essential for the new legislation to work.

“On one hand it’s great to see that there is serious commitment at policy level to honour the commitment we took at the Paris Agreement,” she says.

“On the other, mandatory due diligence and increased transparency and requirements inevitably generate higher expectations for producers. Technical assistance and capacity building will be key to support this transformation.”

While Mario supports the concept of mandatory due diligence, he believes that consumer choices will be a far more powerful catalyst for change. 

“A compulsory method can exclude the involvement of actors and a bottom-up approach,” he says. “It’s better for people to truly understand why one way is better than another. An educated consumer can make an incredible difference and hold companies accountable.”

farmer holding coffee cherries

Collaboration and a collective push for systemic change

There is a growing realisation that the modern world is becoming increasingly collaborative. Working separately on single issues or value chain levels will not achieve an effective transformation. Public-private partnerships, alliances between supply chain operators, and policy will all be instrumental in driving the coffee industry forward towards widespread change.

Olivier is optimistic. He says: “If the actions of each supply chain link are responsible – as when regulators set new policies, or consumers shift their purchasing behaviour, or roasters make sustainability-related commitments – then we enter a virtuous cycle.”

While this sounds great in theory, it requires hard work and dedication in practice. Martina explains that partnerships do not happen spontaneously. Engaging producers, for example, requires a raising of awareness and an effort to share technology and resources. 

“You can’t ask a producer to adopt dynamic agroforestry practices if there is no capacity to back it up,” she says. “Where do they access the seedlings? How do they implement it? How do they profit from it? People need an incentive to embrace sustainability.”

She also notes that the role of the public sector is important. “You can’t implement measures without solid foundations,” she says. “You need healthy, well-functioning institutions that can carry the drive for sustainability and support implementation.”

lavazza coffee machine

Tomorrow’s supply chain: What’s next?

I asked my interviewees how they see the future of the coffee sector, and how sustainable they think it will be. 

Firstly, Olivier is confident that key industry participants have a clear and concrete roadmap for shaping a sustainable future. 

“The European Union and major roasters pledged to cut carbon emissions in half by 2030, due diligence laws are being passed, and consumer-oriented companies have committed to 100% responsibly-sourced coffee.”

Martina says that she thinks sustainable practices will become the norm. “They will no longer be a niche, but a requirement and a consumer expectation,” she says. 

However, she warns of the need for an inclusive conversation and collaborative action on sustainability that extends to everyone.

“We are seeing a shift,” she explains. “Some producer countries are becoming consumer countries, and we have emerging markets in East Asia where consumption is rising. 

“What are the trends there? This needs to be monitored and discussed as new markets open up and grow.” 

Finally, for Mario, the consumer’s right to products’ traceable environmental and socioeconomic information will be of major importance. 

“Things like the characteristics of the growing area and of the growers’ conditions will be increasingly necessary,” he says. He says that Lavazza has a partnership with the Slow Food Coffee Coalition to help build consumer awareness. “The manifesto of the Coffee Coalition is to create the obligation to learn and know and ask.”

indonesian coffee farmers

Sustained efforts and new, more sustainable practices across the supply chain can help mitigate the challenges the global coffee sector faces.

Mandatory legislation to regulate the sector is a move that demonstrates commitment to sustainable goals. However, it is a tool, not a solution – and one that requires careful use. 

“Finding a balance between establishing minimum requirements while not over-prescribing will be key,” Olivier concludes.

We cannot order people to be efficient or ethical. But as a collective, we can improve understanding, knowledge, and ultimately create incentives to contribute to a fairer and more sustainable coffee supply chain.

Enjoyed this? Then read this article on the environmental impact of coffee roasting.

Photo credits: Lavazza, LDC, Martina Bozzola, Unsplash

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