In recent years, direct trade has become increasingly prominent in specialty coffee. The idea is simple: by reducing the number of intermediaries in the supply chain, the farmer receives a higher percentage of the final sale price.
However, there is no official definition of direct trade, which leaves the model somewhat open to interpretation. There is also no specific “direct trade” certification for coffee – and as such, the definition of it can be used rather loosely in the coffee industry.
That said, a number of certification programmes in the coffee sector establish some ethical and environmental requirements that are not mandatory for direct trade, but certainly associated with them. So where does that leave us?
To learn more about the relationship between direct trade and certifications in the coffee industry, I spoke with two coffee professionals who work with private certification initiatives. Read on to find out what they had to say.
You may also like our article on what “direct trade” really means.
What are certification programmes?
In the coffee industry, certifications are generally used to prove that a specific coffee was grown or purchased in an environmentally, socially, or financially sustainable way.
This could mean producers adhering to specific farming practices which respect the local environment, or green coffee buyers proving that all of their lots have been purchased at or above a “fair” market rate.
There are many certification programmes in the coffee sector. Some of the most popular include:
- USDA Organic
- Rainforest Alliance
For instance, Rainforest Alliance works with more than 400,000 certified coffee producers in Latin America, Asia, and Africa, with a major focus on sustainability and climate resilience in coffee production.
Through its certification programme, the organisation helps to train coffee producers in regenerative agriculture and climate-smart farming practices. In addition to this, Rainforest Alliance helps to connect smallholder farmers to international markets.
However, the certification doesn’t necessarily guarantee a minimum price paid for coffee. Instead, it assists farmers in improving coffee quality and yields so that they can sustainably receive more money – improving their livelihoods in the long term.
The UTZ certification, meanwhile, was launched in 2002 before joining Rainforest Alliance in 2018. UTZ also focuses on sustainable farming practices to provide more opportunities for coffee producers around the world.
In order to receive an UTZ certification, producers need to comply with strict requirements. These include safe and healthy working conditions, environmental protection schemes, and no forced or child labour practices.
Certification programmes in direct trade
Although there is no formal certification for direct trade, certain certification programmes are often involved or found prominently when the model is used.
This is largely because direct trade is most popular among those who both grow and buy high-quality coffee produced in transparent and traceable ways. As such, the producers growing these lots and the buyers who purchase them are often already compliant with the various requirements for a number of certifications.
In theory, direct trade also promotes clearer lines of communication between buyer and producer to shorten the distance between the two. This is a concept often referred to as “relationship coffee”, which is where roasters and coffee farmers work together and build long-term, mutually-beneficial working partnerships.
Through this clear communication, buyers can tell farmers more about what they might need to do to meet specific certification requirements. In turn, this can open the coffee up to a wider market.
However, as it stands, there is no widespread formal certification exclusively to guarantee that a coffee has been bought through direct trade.
Exploring private certification programmes
While many of the certification programmes in today’s coffee industry are well-established, there is a growing number of private certifications in the coffee sector.
Humberto Florezi Filho is the CEO of Falcafé in Brazil – a green coffee trader which operates in more than 70 countries. The company has its own certification, Falcafé Certified, which is a private programme used to certify high-quality coffee sold through direct trade.
“One of the biggest determining reasons we created our Falcafé Certified programme was because our buyers required more transparency,” Humberto explains. “Minimising the distance between the producer and the consumer is becoming increasingly necessary for any coffee business.”
He explains that when used properly, private certification programmes can support smallholder producers to become more profitable and drive up their income.
“Falcafé Certified largely benefits smallholder producers whose coffee is the main source of income for them and their families,” he says. “These farmers are more likely to need support to be able to market their coffee [and receive fair prices].”
Humberto also points out that quality is a crucial factor, and says that private certification programmes can actually help to increase quality.
“One of the ways that we help to improve coffee quality in the regions where we operate is through our quality contests, which involve farmers in the states of São Paulo and Minas Gerais,” he tells me.
“Throughout each year, we assess the best coffees in both regions. We are currently in the seventh year of our quality contest, and through these competitions we have achieved continuous improvements in coffee quality by encouraging farmers to implement more sustainable farming practices,” Humberto adds.
Humberto also notes that data collection and access to technology can also support producers involved in these private certification programmes.
“Falcafé Certified offers detailed technical reports on each coffee, including an analysis of the processing method and any issues that may have led to a drop in quality,” Humberto explains.
How do certification programmes benefit roasters?
Generally speaking, certification programmes have a number of simple, clear benefits for roasters. Environmental and social certifications can communicate to the roasters’ customers that a coffee has been grown in an ethical and responsible way, and therefore can access a wider market.
Consumers are becoming more discerning than ever about the products they buy, and increasingly look for a number of labels which indicate just how sustainable a coffee is.
These certifications can also give roasters a certain amount of trust in their suppliers, giving them a good foundation on which to build a long-term trading relationship. This gives them stability, which can also benefit the producer in the long term – it may mean, for instance, that they can commit to buying a certain coffee year-on-year.
But what about private certification programmes like Falcafé Certified?
Jiwook “Henry” Kim is a green bean buyer for Coffea, a roaster and direct trade importer in South Korea. The company uses the Falcafé Certified programme to purchase coffee. He says that as well as providing sustainability, he uses it as a guarantee of a certain minimum quality level.
“When we choose a producer partner, we always visit their farm and office first before committing to buying any coffee so that we can establish a relationship,” Henry explains. “We are located far away from coffee farms, so it is important to establish trust.
“It’s about clear communication, not just selling or buying products,” he adds. “Over the past two years, Coffea won several awards from the Brazilian Specialty Coffee Association. In 2020, we won in the ‘farm’ category for our coffee from Fazenda Santa Izabel-MG.”
Connecting with producers
Bridging the gap across the supply chain is becoming an increasingly prominent topic in the coffee industry.
Humberto tells me that to this end, Falcafé’s Neighbours and Friends programme helps to connect roasters with farmers.
“Through the programme, we offer smallholder producers the opportunity to market their coffees in a more accessible way,” he says. “But our work goes even further than this.
“As part of the Neighbours and Friends programme, we assess quality based on a number of criteria, including coffee variety, farm management methods, and processing techniques,” he adds. “By doing so, we can disseminate our knowledge with other local producers, in addition to encouraging them to adopt more sustainable agricultural practices.”
Humberto explains that for a growing number of specialty coffee consumers, it is becoming more and more important to learn about the story and the farmer behind each coffee.
“We tell the story of each producer and share the value of their work by taking photos and videos of their farms,” Humberto explains. “Falcafé also shares information with each producer on where their coffee ends up, and sometimes we are able to share feedback from buyers after they have tasted the coffee.
“With this level of transparency, we can reduce the distance between roasters and producers, and help to showcase the [characteristics of Brazilian coffees], which are of particular interest to consumers especially,” Humberto adds.
Henry also reiterates the importance of information sharing between roasters and farmers.
“Communication is even more important these days; both roasters and producers are experiencing issues related to the pandemic and the impact of climate change,” he says. “For example, [because of the frost in Brazil in July 2021, Coffea took earlier measures earlier to prepare for the situation.”
When implemented effectively, certification programmes and direct trade models can have a number of benefits for producers, roasters, and consumers. Shortening the gap between stakeholders in the coffee industry allows for clearer communication and gives everyone the chance to set expectations.
And while it’s clear that direct trade has never been formalised with an industry certification in previous years, private certification schemes are stepping in to fill that gap. Whether or not they’ll become more prominent in the years ahead remains to be seen.
Enjoyed this? Then read our article on overcoming logistical hurdles to strengthen direct trade relationships.
Perfect Daily Grind
Please note: Falcafé is a sponsor of Perfect Daily Grind.
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