A new initiative will help UK grocery retailers selling coffee to collaborate on sustainability in their supply chains, says Max Milward.
“Every year the rains start later and the average temperature is higher,” Silvia explained. “When you talk to elder farmers, they always say that coffee has changed, that 25 years ago it needed way less work than it needs now”.
Silvia Herrera, a second-generation coffee farmer from Chiapas, southern Mexico, is just one of many the Fairtrade Foundation works with around the world who has told us about the concerning impacts of climate change on their crops. Silvia and thousands like her are responsible for producing the coffee beans sold in UK high street coffee shops.
Elsewhere, recent prolonged heatwaves in Vietnam and heavy rainfall in Brazil have created coffee shortages causing the price of both arabica and robusta to soar. Decreasing yields from climatic disruptions and crop damage are directly causing price volatility and uncertainty for farmers, which in turn place an unprecedented strain on the whole coffee supply chain.
The high street coffee drinker is not immune to these impacts either, with the average price of a cup of takeaway coffee now costing close to £5 per cup.
Sudden price rises may appear beneficial for coffee producers, but the reality of fixed, short-term contracts means that surges and drops in price can lead to cooperatives being unable to fulfil contractual obligations, risking fines and reputational damage.
The situation is urgent but efforts to tackle ongoing climate-driven challenges remain painfully slow. There is still relentless pressure to prioritise quick, short-term gains over long-term sustainability. The biggest risks in supply chains require collective action and the need for shared responsibility is, therefore, essential.
In order to address these challenges, Fairtrade has launched a pioneering new initiative called Shared Impact, which promises to be transformational for coffee businesses, out of home consumers, and farmers alike.
Shared Impact – which is the first initiative of its kind in the UK to go through the Competition and Markets Authority’s (CMA’s) new open-door policy for green agreements between businesses – encourages coffee businesses to come together and commit to paying farmers the Fairtrade Minimum Price and Fairtrade Premium under longer term contracts. The new initiative will focus sourcing into specific pools of producers who are currently only able to sell a relatively small proportion of their total crop production on Fairtrade terms.
For the first time, Shared Impact creates a forum for coffee businesses of different stripes – whether in hospitality or the grocery sector – to take collective action through sourcing to enhance sustainability and resilience in supply chains.
The collaborative nature of Shared Impact means stronger relationships with coffee producers. We have heard how important this is for coffee farmers. “There are times when it feels like we are not selling, we are being bought”, Sivia told us. “But Fairtrade feels like a partnership, caring about people and environment”.
It also allows coffee businesses to target salient risks in their supply chain, drive forward a more resilient coffee industry, and fund real, lasting change in partnership with farmers.
With changing legislation and growing customer demands, businesses face increasing pressure to adopt and enhance sustainability initiatives within their supply chains. Shared Impact presents an opportunity for coffee businesses to do just that – to transform their supply chains.
Silvia and her coffee cooperative are already onboard. Together, with Fairtrade, we can start the journey to a more resilient and sustainable future for the coffee industry. The time to act is now.
Max Milward is sustainable sourcing manager at the Fairtrade Foundation
