The NY Times on ‘Direct Trade’
September 12, 2007
The New York Times has a fascinating piece today on Direct Trade coffee companies.
In the past few years, big coffee companies (e.g., Starbucks, who buys roughly 300 million pounds per year) have started marketing “Fair Trade” and “organic” coffees. Many customers have no problem shelling out a bit more for beans that were more thoughtfully and carefully grown. Yet, these labels - or even the methods - offer no guarantees for the actual flavor or quality of the beans. Even more recently this has given rise to Direct-trade coffee companies such as Stumptown and Intelligentsia and others, who buy their beans directly from the farms and cooperatives that grow them (i.e., not from brokers).
This gives the relatively small roasting companies an unprecedented relationship with coffee farmers, and thus unusually direct control over the quality of their coffee offering.
“It’s an exploration of coffee’s flavor, really” is how George Howell explains his mission. Mr. Howell, who runs George Howell Coffee Company, a roaster based in Acton, Mass., has had a hand in practically every lurch forward in the quality coffee scene since he started out in the business in 1974. “We’re finding flavors we’ve never ever tasted before, different fruit and floral flavors from really pristine, clean coffees. These are flavors that have been lost or diluted in the old methods of blending coffee down to an average product.”
In many ways, the direct-trade roasters are building on the foundation laid by companies like Peet’s and, later, Starbucks, which went outside the commodity system to find superior coffee. But, Ms. Blumhardt said, those companies are too big to comb over every bean in every sack the way some direct-trade companies do. Starbucks bought more than 300 million pounds of coffee last year; Intelligentsia, the biggest of this group, bought 2 million pounds.
Direct Trade companies develop a unique relationship which goes beyond the basic buyer/seller. Duane Sorenson (owner of Stumptown) recently travelled to Rwanda, and after discussing the needs of the local coffee growers, started a nonprofit group called Bikes to Rwanda. This April, 400 bikes specially engineered for carrying heavy loads of coffee over hilly Rwandan terrain were delivered to the cooperative just in time for the harvest.
“It’s not charity,” he said. “Our producers invest back into their workers, coffee shrubs, equipment and land. We know this is happening because of all the time we spend with them throughout the year, on their farms and in their homes.”
The entire article is a great read. Go check it out and while you’re there, view the From Cherry to Cup slideshow.
(via Grendel)
Even so, Starbucks “direct” purchase of Ethiopian beans resulted in just one-half the fair trade benchmark to the growers themselves for, as The Wall Street Journal described, what Starbucks said was the best in the world. [Wall Street Journal article]
It is very, very difficult to verify ethical purchasing practices for direct purchased coffee. I chatted (email) with the WSJ writer Roger Thurow and approximately 75-cents per pound made it from Starbucks to the Ethiopian cooperative members. Fair Trade certification would have earned coop members up to $1.41 per pound. The movie Black Gold cites a sustainability price for Ethiopian farmers of $1.10 a pound.
I’m not arguing at all against this direct purchase niche of the very wide coffee market but only as a cautionary note. I know of the good work that Intelligensia has done. So to has Andrew Vournas of Vournas Coffee Trading.
Thank you for the insight, Jack. We were hoping to differentiate the relatively small direct buyers (that are purchasing ethically as well as giving back to the growers) from the overblown “direct” buyers like Starbucks. We specifically noted the ways in which Intelligentsia and others were giving back to the community and ensuring fair (sustainable) prices for the coffees.
We also pointed to the news of Starbucks’ legal battle with Ethiopia, which we thought highlighted the difference in attitude between the smaller companies and their massive counterparts.
As always, deal locally whenever you can. Avoid the giants!