The following post is the second in a three-part series that looks at how the coffee industry can become  more circular and direct across the supply chain. 

Part 1: Transparency and Traceability Across the Coffee Supply Chain

By Dr. Terry Tudor and Dr. Nicholas Head, SusConnect Ltd

The global coffee industry is growing. However, it is important that there are measures taken to ensure that this growth is circular and that small farmers and producers benefit along the way.

A direct trade model, which takes account of circular business models, along with the use of blockchain technology, offers the opportunity to realize these goals.

“Direct trade” is a term used by coffee roasters who buy straight from the growers, cutting out both the traditional middleman buyers and sellers, and also the organisations that control certifications.

Some roasters do it because they are dissatisfied with the third-party certification programs, while others want to have more control over aspects ranging from the quality of the coffee, to social issues, or environmental concerns.

Some roasters use ‘direct trade’ in more specific ways. For example:

• Chicago-based company Intelligentsia has trademarked the term Intelligentsia Direct Trade to promote its direct business relationships with growers. It pays growers above the Fair Trade price. However, specific requirements are not set for growing standards.
• While Counter Culture Coffee sets a minimum price it pays and also establishes a quality standard, however, environmental standards are not part of its four main criteria.
• Dean’s Beans promotes itself as going beyond Fair Trade standards by selling only organic coffee and its own definition of ‘fair trade’ coffee.
• In the UK, the award winning company Union Hand Roasted Coffee has been operating since 2001. It sources specialty coffee, roasts and sells.
• While Café Direct, which sells coffee, chocolate and tea, works directly with producer organisations in countries across Latin America, Asia and Africa. Most of the small farmers own shares in the company.

While there is an element of ‘circularity’ in what is currently being done in the industry (e.g. recycling coffee grounds into biofuels and ), a recent report from the British Coffee Association entitled ‘Bean to Bin and Beyond’ found that there was much more that could be done.

Indeed, the report noted that, “As the industry grows and consumer demand continues to increase, the sector must ensure that circularity of material use and re-use is central to the development of coffee supply chain strategies”.

Key issues include the use of more sustainable packaging, reduction in carbon during transport, and behaviour change around recycling and reuse.

Next post: Blockchain technology and traceability in the coffee supply chain

Dr Terry Tudor and Dr Nicholas Head are directors of SusConnect Ltd, a UK company that provides ‘circular direct trade’ services in the coffee and tea industries. For more information visit http://www.susconnect.net, follow @Susconnect, or email: nicholas.head@susconnect.co.uk