What is Fair trade and direct trade anyway, and do we really need to factor it in when buying our coffee?
Fairtrade was originally set up as an admirable cause to ensure farmers get a fair price for their coffee. Essentially, it is a certification that requires certain environmental and social standards from the farms. If the farm qualifies as Fairtrade, they are guaranteed a minimum price for their coffee. However, don’t be fooled! A Fairtrade certification does not always equate to good quality coffee – in fact, there are very few quality checks in place when it comes to certifying farms.
However, direct trade in coffee between farmers and roasters sounds like a good and fair deal all round. What does it really mean though? James Hansen explains all.
Like most consumer products, coffee changes hands as it passes through the supply chain. A café or restaurant will buy beans from a roaster. The roaster will have bought those beans from… well.
Traditionally, from a broker or green buyer.
However, coffees move between producers and roasters in many different ways, and one of these is “direct trade”.
This is when coffee roasters travel to producing countries, commit to buying coffee, and pay the farmer directly. They establish these relationships over years and go beyond trade: roasters may invest in production facilities or new processing methods; farmers will visit roasters to taste the final product and offer reciprocal feedback.
The core of direct trade is relationship: as Alchemy Coffee’s Joseph O’Hara says, “It is a first-person relationship with the farmer – a relationship with no hidden corporate structure. It is an eyeball-to-eyeball agreement.” Alchemy says they buy 70% of its coffee via direct trade.
Like farm-to-table, direct trade is often synonymous transparency. If the roaster meets the farmer personally, then surely the coffee must have a level of integrity and purity and remain fairly priced. In fact, there is no formal definition of direct trade, nor any rules, guidelines and certifications for what it entails. The term gained popularity a decade or so ago by coffee roasters Intelligentsia and Stumptown, and gained prominence in the speciality market.
Jan Komarek, head of quality control and green coffee at Bailies Coffee Roasters, says the direct trade model must be based on specific, enforceable rules. Most importantly, the price and conditions of sale must be negotiated with the producer of the coffee or their representative, without importers, brokers or traders involved. Additional criteria should include provision of fair wages to workers.
At its best, direct trade has benefits for farmer and roaster alike: neither is giving up income to brokers or buyers, and there’s a direct line of communication between the producer of the coffee and the company who is representing their product.
Furthermore, a roaster involved in direct trade will commit to buy a lot of coffee – even a new experimental lot, which relieves the heavy financial burdens that can prevent farmers from experimenting. This trust and freedom can lead to even more delicious coffee, whether from planting a new varietal or developing an experimental process model. It also makes it an endeavour fraught with risk.
Risk is, in a sense, the hallmark of direct trade. Under the traditional brokering model, roasters can reject a coffee based on a pre-shipment sample; the financial responsibility and risk lie with the broker. With direct trade, the risk is with the roaster and producer: the former will often pay in full for the coffee pre-arrival, based on a small sample.
There are doubts over whether direct trade is achieving its aims of transparency and integrity. Because of the lack of a clear definition, there’s nothing to stop a coffee roaster buying direct from a farm that does not pay its workers a sustainable wage. Many have questioned whether the direct trade model is sufficient to tackle institutional poverty and inequality in producing countries. A roaster can label coffees as direct trade based on the relationship between the broker and the farm, rather than the roaster and the farm.
Wrecking Ball Coffee co-owner Nick Cho said the term third wave had to be “meaningful as an ethos, philosophy or aesthetic. Otherwise, and unfortunately, it’s a nebulous term that’s going to be co-opted by anyone who has half a reason to.”
The same is true of direct trade. If done right, it can build relationships like those O’Hara has at Alchemy and buyer Joshua Tarlo has at Origin. But a touristic trip that does nothing to build relationship is one of the scourges of modern speciality coffee. What makes direct trade worthwhile is the collaboration, experimentation and desire for better quality.