By Nora Johnson, Commodities Manager, Massimo Zanetti Beverage USA

To kick off the 2021 NCA Virtual Convention, the Next Generation Council was proud to present the panel discussion: “Ideation to Action: Sharing the risks and rewards of sustainability in the coffee value chain.” Organized by the NCA Next Gen’s Events Committee, this panel discussion was an attempt to bring the supply chain together for an earnest conversation about sustainability.  As the Events Committee’s Chair, Eric Mitchell, explains “It is clear to this generation that when it comes to sustainability, we must act united as an industry—individual initiatives will only get us so far.”

Thus, NCA Next Gen invited participants from each part of the value chain: Francisco Lacayo (L53 Estates), Hugo Valdivia (HVC Exports), Esteban Jaramillo (S&D Coffee and Tea), Nathalie Gabby Huddleston (RGC Coffee), and David Browning (Enveritas). And the panel was moderated by Olivia Bartelheim of the Rainforest Alliance.

Sustainability is one of the “hottest topics” in coffee, yet, despite the topic’s forefront position in conversations across the supply chain, getting from conversation to application has proven to be challenging. These knowledgeable panelists provided experienced-based insights into how the risks and rewards of implementing critical sustainability initiatives can better be distributed and how the next generation of coffee leaders can help forge the way.

We have highlighted some key insights from each of the panelists below, but if you missed your first chance to watch the panel live or think you would benefit from a second viewing, be sure to check out the recording above.

The responses below have been paraphrased and lightly edited for clarity.

Nathalie Gabbay Huddleston, President RGC Coffee:

In response to the opening question of the panel, Nathalie shared three themes to keep in mind in order to ensure a balanced risk and reward for all stakeholders in the value chain:

1. Collaboration is critical – you can’t tackle the world’s challenges alone.
2. Listen to your partners along the supply chain and then build something that makes sense. Use a ground up approach on a wash-rinse-repeat cycle of trying, testing, and measuring as every solution is going to be different based on the situation and the community.
3. Start small and scale up but think big! Practice sustainability at scale.

When it comes to engaging other producers, workers, and customers, Nathalie said to “inspire the why.” Feel inspired about the initiative and the project and why it matters, then inspire others to understand the need to make these changes while backing it all up with the data-supported business case.

David Browning, CEO – Enveritas:

When asked about how companies should be using data to take on responsibility in accelerating progress towards the most urgent issues, David explained that “you can’t manage what you can’t measure.” 

David contextualized this issue by metaphorically contrasting the reactions that occur in sustainability with the more proactive measures that are part of most organizations’ day-to-day business practices. Quality testing and measurements are part of the standard practices within most companies, yet oftentimes it takes a media story to trigger actions in sustainability. The scientific process with quality testing works, so apply it to sustainability in the same manner.

Francisco Lacayo, Industrial Manager – L53 Estates:

As a young professional in coffee and seeing the struggles that many generations have faced due to both price and production cycles, Francisco invested additional capital to have a higher yield despite the higher risk on his side. This translated to a lower cost per pound in the long term. In order to support the higher yield, additional labor was required resulting in a more sustainable income for workers. The increased capital investment allowed for more consistent production cycles, yielding more consistent relationships with customers as well.

When speaking on the climate crisis, Francisco encouraged others within the supply chain to visit the regions where there is less mechanization. He elaborated, sharing that we need to create more awareness for the most vulnerable populations at origin as to what climate change is and how it can affect them. We need to increase awareness through education which requires added capital investment from throughout the supply chain.

Francisco shared that although the word “sustainable” is beautiful, sharing profits across the value chain is how we will be able to sustain lives. We cannot talk about sustainability when prices are staying the same or decreasing year after year.

Hugo Valdivia, COO – HVC Exports:

Based in Peru, Hugo spoke about the importance of the price to quality ratio and of how efforts get placed on volume over sustainability initiatives and quality. As an example from his experience in Peru, by focusing on specialty and certified coffees as opposed to commercial grades, his organization was able to increase the price to quality ratio in order to deliver a fair price to the farmer.

When asked about what the sector can do to support young professionals as they confront the climate and price crises, Hugo described of how the next generation of farmers are transitioning out of coffee and into other products with less volatility. He explained of how coffee in Peru is viewed as a cash crop, resulting in limited reinvestment. In order to support young professionals, Hugo encouraged the development of shared value relationships across the supply chain.

Esteban Jaramillo, Sustainability Manager – S&D Coffee and Tea:

Sharing the risk and reward depends on the customer – not all organizations understand the coffee supply chain. We need to start by talking about the risk of not engaging in a sustainable supply chain.

Climate change is getting more attention from consumers, nonprofits, and government institutions, yet there is a gap between the understanding and the willingness to invest in sustainability. We need to make companies accountable while sharing that accountability with consumers. Risk means something different to every company – try to understand how risk impacts each company. Sustainability needs to be understood holistically, not by only one angle.

Hope for the future:

It wouldn’t be a Next Gen panel without asking panelists to share of what gives them hope about the Next Generation of coffee professionals. From increased awareness to a greater sense of empathy and innovation, our panelists guaranteed that there is much hope to be had.

To all Next Generation professionals, David Browning left us with a challenge to harness the enthusiasm and awareness of industry and organizational leadership as it relates to sustainability. The enthusiasm from leadership is there, but it is up to us now, this next generation, to be the ones to take us from Ideation to Action.