The world’s two largest coffee trading groups are to work with the Rainforest Alliance to improve the social and environmental performance of their suppliers.
Neumann Kaffee and Volcafe have signed a memorandum of understanding with the environmental group to increase ‘co-operation on meeting rigorous standards for environmentally and socially sustainable coffee production around the world.’
The Alliance, which has worked with Chiquita since 1992 to improve the banana firm’s social and environmental performance, hopes to improve working and living conditions for coffee farmers.
Both trading groups have interests that extend far beyond trading in the commodity and are involved in almost every aspect of the coffee business, including farming, processing, exporting, warehousing, blending and distribution. The Neumann Kaffee group alone has 46 companies that operate in 28 countries. The two groups account for about 25 per cent of traded coffee.
Both already have some social and environmental initiatives in place, but will have to do much more to bring their suppliers up to the standards set by the Alliance.
Michael Neumann, chairman of German-based Neumann Kaffee, said the two companies, although rivals, will work ‘pre-competitively and co-operatively’ with the Alliance.
The intention is to improve the lives of coffee farmers, stabilize the industry, and prove to consumers ‘the entire coffee community wishes to act in a truly responsible manner’, he said.
To gain certification from the Alliance, Neumann Kaffee and Volcafe will have to ensure their suppliers improve working and living conditions and provide healthcare, education and other benefits for coffee workers.
The deal is also expected to protect habitats near coffee plantations and reduce pesticide use. Neumann said this would benefit the companies, because although intensive farming produces more beans, it has also led to quality problems.
Oversupply and lower quality produce have helped depress the price in recent years, forcing growers of all sizes to abandon farms, and the companies believe that improving the social and environmental performance of their supply chains will bring reputational benefits and provide a more stable supplier base.
Paul Moeller, chief executive of Swiss-based Volcafe, said more sustainable production ‘is the greatest chance coffee has had in many years’. The companies gave no costs, but in the banana sector Chiquita has spent $20million (£12m) over a decade on similar work.
The Alliance uses in-house auditors to monitor its standards, which have been developed with the Sustainable Agriculture Network, a coalition of nine Latin American conservation groups. Most of the work will be done in Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama.
Rainforest Alliance marketing director Sabrina Vigilante said the initiative would ‘have a stabilizing effect on a large share of the global coffee market while nudging it in a greener direction’.
Coffee is the second-largest commodity traded internationally after oil, with 25 million farmers thought to depend on the crop.
Portuguese coffee producer Novadelta-Comercio e Industria de Cafes has joined CSR Europe, a business campaign network.