Coffee in Crisis: A Call and Response

This year, the coffee “C” price fell to its lowest point in 12 years, pushing below US$1.00/lb for the first time since Re:co’s inception. This price is a potent symbol of a shocking reality: coffee farming has been an unprofitable business for many producers for many years. Leaders in the coffee industry recognize that a crisis is underway, that its casualties are our partners, and that without them, there is no specialty coffee industry.

But there is hope: individuals, companies, and organizations are addressing this crisis using new tools and different approaches to understand and confront the complex problems we face. This year’s Re:co will be about coming together to learn, collaborate, and act to address this challenge that faces all of us in specialty coffee.

We’ll explore:

  • Macroeconomic Dysfunction in the Coffee Trade: What are the mechanisms behind the volatile shifts in the coffee market? We’ll convene with experts to understand the functions and challenges of the coffee system.

  • Cost of Production and Profitability for Coffee Producers: Do we really know what specialty coffee costs? Buyers and producers alike need to understand what it takes to produce specialty coffee so that it can be priced sustainably. New research helps us to better understand the cost of production and integrate these learnings into our trade strategies.

  • Value Chains, Transparency, and Market Linkages: This isn’t the first coffee price crisis – what tools did we employ previously? How successful were they? What new tools are offering potential solutions? We’ll evaluate traditional tools like certifications and cooperatives and explore new tools like transparency systems and market-linking approaches.

  • Growing Consumption: Letting Go of Sameness: We've become accustomed to specialty coffee consumption growing at a fast pace, but some signs indicate adoption may be slowing. Have we hit peak consumption within our target customers? What could we stand to gain if we became more diverse in our approaches and offerings?

  • The Role of Innovation and Technical Advancement: How can new technologies fuel change and increase efficiencies? What role does new technology have to play in the resolution of the crisis? We’ll explore and evaluate advances in innovation positioned to make an impact.


Program Overview

Session One

MACROECONOMIC DYSFUNCTION IN THE COFFEE TRADE

SESSION HOST: Ric Rhinehart

Prices and Antitrust Law; Where’s the Line? Presented by Jefferson Glassie

There is a lot of discussion about coffee markets these days, and a desire to discuss both micro and macro economic implications. But, the antitrust laws impose significant liability for impermissible agreements on prices, boycotts, or allocations of markets. Jeff Glassie is an attorney for trade and professional membership associations, which have to regularly deal with the antitrust laws, and he will address legal concepts to help guide actions and conversations that are important for the industry with the goal of avoiding illegal conduct and ensuring pro-competitive action.  

From Band-Aid Solutions to Sustainable Systems: Overcoming the Single Exit Fallacy Presented by Janina Grabs

Despite the best efforts of industry actors and producing-country governments over the past decades, the coffee sector continues to suffer from recurring crises that affect the livelihoods of millions of smallholder producers. Why are our solutions not working as intended? In her talk, Janina Grabs argues that there is a need to closely consider the scale at which different initiatives may create positive change. In particular, scaling up initiatives that are based on differentiation, or on productivity increases, is likely to have counterproductive results unless carefully managed. In addition to such solutions that may work well in niche markets or local settings, there is hence a need to fundamentally reconsider the systemic problems of the sector, such as the cyclical volatility of the free market system, and rethink the possibility of systemic solutions.

The World Coffee Producers Forum: What To Expect Presented by Vanúsia Noguiera

The presentation will cover the motivations for realize the first WCPF as an event, the motivations to organize the Forum’s committee, what the committee has been doing over the last 18 months and what to expect for the next event in July in Campinas, Brazil and for the future.

Session Two

COST OF PRODUCTION AND PROFITABILITY FOR COFFEE PRODUCERS Session host: KIM ELENA IONESCU

Beyond the Price: Supporting Smallholder Entry into the Specialty Coffee Market Presented by Taya Brown

Taya Brown will discuss her experience working with several communities of smallholder coffee farmers in Yepocapa, Guatemala to better understand the obstacles they face in uptake of new technologies. Profitability was found to be the main constraint, affecting nearly all aspects of production, sale and innovation. Addressing low profitability, however, isn’t as straightforward as one might think. To gain true autonomy, farmers need more than just higher prices - they need to better understand how their own field, harvest and post-harvest management affects their coffee’s quality, value and potential to reach higher paying markets.

Producer Cooperatives: Supporting Smallholders (and the Specialty Sector) Since the Last Price Crisis Presented by Merling Preza

What role do cooperatives play in the resilience of the specialty coffee sector? Merling Preza, who was one of the founders of PRODECOOP in 1993 and now serves as its General Manager, will reflect on the experience of farmers in Estelí, Nicaragua, and surrounding areas during the current price crisis, the crisis of the early 2000s, and the years in between. 

Profitability from the Ground Up Presented by Enrique Magana + Danielle Kneuppel

Almost everywhere we go, we find that coffee farmers are shouldering all the risk in coffee production because there is little information on the best varieties and agricultural practices, no access to the right plants, or not enough knowledge on how to prepare for the next drought or epidemic. Because of these seemingly simple barriers, many farmers that could be profitable aren't. World Coffee Research, together with dozens of partners, is building an unprecedented network of global on-farm trials to discover which varieties and agricultural practices are most profitable for coffee producers around the world. The Global Coffee Monitoring Program addresses one of the most important decisions farmers make: Which plants and practices are right for my farm? For my climate? For my buyers? We'll explore the platform's aim to use rigorous, on-farm science to create a global data set that addresses the profitability of coffee farming from the ground up.

Using Technology to Help Smallholder Farmers Presented by David Browning

What we know and what can we do?

David looks into some of the important empirical underpinnings of the coffee industry such as How many coffee farms are there, how many of worlds farmers are smallholders and how valuable is the coffee industry. Sharing results from robust statistical research conducted by Enveritas across 20 countries, David looks anew at coffee industry facts as we know them.

How to improve education for coffee children?

How do we improve education outcomes for children of coffee farmers. Are children not in school  because there aren't enough schools or are children not in school because there are not enough teachers and class sizes are too big. Or is it more teacher training thats needed or better access to textbooks. There are no shortage of opinions when it comes to education, whether its here in our own zip code, or in coffee communities. But what are the facts that we are basing our opinions on and can we gather better data to inform decision making, with the use of new technological tools that weren't available a decade ago.  David will share new ideas to look at old problems that Enveritas will test in the cocoa sector, but could have applicability in coffee.


Beyond certification

I believe in creating a sustainable coffee industry but certification doesn’t work well for my business. Its too expensive, or it isn’t suited to the coffee I buy, I cant be tied down to a set of specific sources I need to be able to optimize coffee buying for my business, or i want to have a direct relationship with my suppliers, or one of any other challenges What if there was a new way, using technology to address these concerns. A system where the farmer didn't have to pay for the audit, the cost was reasonable, the audit robust, and you could keep the direct relationship that you have built and have the reassurance that sustainable actions were being taken to protect the environment and ensure social protections were being upheld.

David will share Enveritas' new approach to sustainability assurance

Alarms & Leadership toward Change Moderator: Chad Trewick Panel: Rene Leon Gomez, Michelle Bhattacharyya, Herbert Peñalosa, & Peter Dupont

This panel will start with information from PROMECAFE about the impacts of lasting low coffee prices within the 10 countries it represents. Socio-economic impacts, as well as information about weakened and underutilized coffee processing infrastructure, will ground our conversation. Leaders--one producer and one roaster/retailer--will tell of their own actions as businesses that drive toward positive change in spite of dominating free market forces that keep values for coffee low. We will conclude by hearing an example of how the banana industry was able to feel safer engaging in critical dialogue that includes the entire value chain to address its challenges--which are parallel to our own in coffee.

Session three

VALUE CHAINS, TRANSPARENCY AND MARKET LINKAGES SESSION HOST: PETER GIULIANO

The Coffee Barometer and Its Relevance to the Speciality Sector Presented by Andrea Olivar

Published every four years, the Coffee Barometer highlights emerging trends and provides a critical look at progress made by the coffee sector on sustainability. Researched and written by a consortium of organizations that specialize on sustainability, including Solidaridad, Hivos, Conservation International, Oxfam Belgium and COSA, the 2018 report paints a startling picture of today’s coffee sector.

I’m Loving It: An Exploration of a Sustainable Value Chain Presented by Michelle Johnson

Michelle Johnson is a coffee industry thought leader, writer (Sprudge, Standart, Pour Over), and public speaker (Nordic Roaster’s Forum, Re:Co, World Coffee Leader’s Forum) on the intersection of identity and coffee culture. She’s notably known as The Chocolate Barista and debuted the live podcast show, Black Coffee in 2018. Her career has expanded from barista and manager to marketing profes- sional and consultant between the United States and Australia. Most days, you can find Michelle in the corner of your favorite coffee shop working on her next article. This is her second time speaking at Re:Co Symposium.

Coffee and Values: Specialty Coffee, Social Capital, and Maya Farmers Presented by Ted Fischer

This talk takes a different look at the coffee value chain. Fischer, a cultural anthropologist, studies how people give worth to things. He shows how coffee acts as a vessel for all sorts of values (economic, but also social, moral, and ideological), and how the coffee trade involves balancing different metrics of value. Building on fieldwork with Maya farmers, he shows how smallholders have benefited from the specialty coffee revolution, but lack the social capital to tap into the most lucrative segments of the market. He concludes by illustrating opportunities to build human and social capital among growers.

Quality Foundations for Success: 20 Years of Lessons Learned Presented by Ellen Jordan Reidy

For over 20 years, the Coffee Quality Institute (CQI) has worked to improve coffee quality through a diverse set of programs addressing foundational issues affecting the value chain. These programs have been aimed at improving the lives of people and communities who produce coffee. During this time, CQI has had a front row seat to a multitude of private and public sector projects that have sought to resolve the serious issues that face our industry. Certainly, there have been both challenges and successes. Do global training and quality improvement programs result in positive changes? Which strategies have worked, and which have met road blocks? CQI will discuss lessons learned which are relevant in today’s coffee world.

Financing Resilience Presented by Greg Lowe

Insurance is a common financial instrument, but often misunderstood. What is it’s role is building resilient business models? New developments in insurance solutions can transform how risk is managed, understood, and priced. From crop insurance, to weather insurance, new financing models are unlocking possibilities for agricultural supply chains.

Session Four

GROWING CONSUMPTION: LETTING GO OF SAMENESS SESSION HOST: PHYLLIS JOHNSON

Creating a Space that Empowers and Brings New Consumers to the Table Presented by Keba Konte

Red Bay Coffee is at the forefront of what is believed to be the fourth wave of coffee – a firm commitment to ensure coffee production is not only high quality and sustainable, but a vehicle for diversity, inclusion, social and economic restoration, entrepreneurship and environmental sustainability. The company provides the opportunity for many non-specialty coffee consumers to experience the beverage in a different way. Some customers come in the door as commercial coffee drinkers, tea drinkers, or non-coffee drinkers. Red Bay offers an opportunity to participate in the lifestyle around coffee which is rich in culture and history. We like to think that we are having an impact in the overall market in our own small way. We get more people excited about specialty coffee along with helping them to see a possible career path in the industry. Many of our customers are connecting with coffee on a cultural level that they may not have known about in the past. Our tag line, Coffee, Africa’s gift to the World” gets our customers thinking and it offers the African American a connection to the beverage. A connection that allows engagement with the product and a sense of ownership and pride that they may not existed prior to them engaging with our coffee or business. We create welcoming spaces making the customer feel comfortable, we do our best to demystify coffee.

Markets in Producing Countries Presented by Vera Espindola Rafael

The market strategy of most producing countries has been solely focused on export as the majority of the consumption lies in the United States, European Union and East Asia. Producing countries have therefore invested strategically to position the coffees of their origins in different manners, with the intention to increase demand of buyers and consumers of these consuming countries. The main cities of producing countries, such as Brazil, Colombia, Mexico and Rwanda, have seen an increase in coffee shops and overall coffee culture, and coffee is increasingly consumed out of home. The places of consumption have followed the steps of the waves of the coffee industry, being now the third wave. With the current low coffee prices, cases have popped up where for some producers it has become more attractive to sell their coffee on the national market as the price they receive for their coffee is higher than or equal to exporting. Are these markets (enough of) an opportunity for specialty coffee growers? What is the real potential? Should producers invest their efforts in their countries? What can the sector do to facilitate these opportunities? What needs to happen (more) to create a specialty coffee environment?

Session 5

THE ROLE OF INNOVATION AND TECHNICAL ADVANCEMENT

SESSION HOST: VAVA ANGWENYI

The Coffee Science Foundation Presented by Peter Giuliano

The biggest theme of last year’s Re:co Symposium- and throughout the history of our conference- is the value of information and knowledge building. What is the value of knowledge and of expanding understanding in coffee? How can it positively influence consumption, economic performance, and coffee policy? The SCA has been driving its research initiative forward over the past few years, and this year, has launched the Coffee Science Foundation as a tool to drive research, science, and increased knowledge about coffee.

Unlocking Coffee’s Flavor Code Presented by Hanna Neuschwander

How does a living thing get to be the way it is? How does a coffee come to taste the way it does? How does the plant's blueprint for what's possible—it's genetics—interact with complex and changing environments to produce flavor in the cup? Hanna Neuschwander will describe a major global trial underway designed to help us understand how coffee genetics interact with the environment, and a new study that will let us see how these things impact coffee flavor and chemistry. She'll explore how we we harness that understanding to "make coffee better" and open up new avenues for farmer profitability.

The GCP and Country Platforms:  Scaling Local Action for Global Sustainability Results Presented by Carlos Brando + Veronica Herlina

Global Coffee Platform members and Country Platform stakeholders have united in new ways to tackle the economic viability of coffee farming at scale.  Innovative collaborations, including National Coffee Sustainability Curricula, the Country Platform Global Congress and GCP Member Initiatives are bringing sustainability champions together in pre-competitive partnerships to amplify investments and achieve more resilient, productive and profitable coffee farming communities.  We all rely upon profitable coffee farming to support our thriving global industry.   Global Coffee Platform members are pioneering a neutral, pre-competitive organization where both private and public sustainability stakeholders actively create a common roadmap and actionable agendas to move our shared, critical sustainability strategies forward faster.    

Empowering the Specialty Coffee Sector to Look Beyond the “C” Presented by Peter Roberts

Producers of specialty coffees face serious questions about whether and how the market values their products. These questions are symptoms of long-term, structural problems rooted in inequality and information asymmetry. For the specialty coffee industry to survive, these questions need to be answered.

To be clear, the continued growth of specialty coffee is creating opportunities for some farmers as consumers learn to value cup quality, along with origin features like farm elevation, plant varieties, and green coffee processing methods. However, before farmers can get excited about the promise of better compensation, we must recognize that they remain beholden to a pervasive, flawed approach that tethers specialty coffee prices to the commodity futures market.

As the New York C price continues to fluctuate around $1 per green pound, many people are talking about the need to buffer the women and men who grow specialty coffees from these commodity price references. However, this requires another set of benchmarks that are more relevant. The Specialty Coffee Transaction Guide relies on an expanding group of roasters, importers, exporters, and others who donate contract data covering specialty coffee transactions from recent harvests. Researchers at Emory University use this information to prepare and distribute annual Transaction Guides that report on the distributions of green specialty coffee prices from recent harvests.