Coffee Barometer 2023

The coffee industry’s pursuit of affordable green coffee often disregards
vital aspects like sustainable production and trade practices.
Ensuring long-term viability and giving equal importance to short-term economic gain at the farm level are equally essential to foster sustainability in the coffee sector.

While global coffee consumption steadily rises, its production still hinges on an extractive model that emphasizes low-cost trading, contradicting international sustainability objectives and climate agendas. Around 12.5 million coffee farmers in 70 countries produce coffee, with Brazil, Vietnam, Colombia, Indonesia, and Honduras contributing 85% of global supply. The remaining 15% is produced by 9.6 million farmers, their livelihoods are under pressure as coffee farm revenues decrease while costs for inputs are on the rise. These farmers face grave economic precarity, and lack the resources necessary to meet sustainability standards or find alternative income streams.
The global market share of certified coffee remains stagnant, despite growing consumer sustainability awareness.

Voluntary Sustainability Standards (VSS) are crucial to enhancing transparency, trust, and sustainable consumption behaviors in the coffee sector. Although consumers show growing sustainability awareness, the market share of certified coffee is hindered by barriers including information gaps and higher prices. In recent years, we’ve witnessed a stagnation in the expansion of certified coffee within the market, accompanied by a decrease in volumes procured by major coffee roasters.

Transitioning to a sustainable coffee sector necessitates comprehensive measures extending beyond on-farm practices. It requires recognizing the systemic imbalances that threaten the coffee value chain.

Immediate action is imperative, empowering farmers to make investments, preserve ecosystems, and embrace responsible production practices to safeguard both their livelihoods and the long-term sustainability of their farms. Moving towards a sustainable coffee sector demands broad steps beyond farm-level practices, acknowledging the imbalances that imperil the coffee value chain. As such, addressing trade inequities and guaranteeing equitable remuneration for farmers, as underscored by the living income gaps experienced by coffee farming households.

Prominent coffee roasters position themselves as sustainability pioneers. However, numerous sustainability commitments fail to harmonize with actual business operations, characterized by a lack of transparency, adequate funding, and fair compensation for the sustainable endeavors of small-scale farmers.

Our Coffee Brew Index reveals that although most companies have overarching strategies and engage in coffee sustainability activities, they often lack comprehensive, measurable and time-bound goals. This deficiency in effective strategies and reporting hinder coffee companies’ ability to address sector challenges, thereby impeding social and environmental progress within supply chains. Moreover, transparency and engagement gaps persist, hampering meaningful discussions on advancing these objectives.
Multi-stakeholder initiatives aimed at promoting sustainability in the coffee sector fail to make substantial progress. Often they provide a platform for companies to declare their commitment to positive goals, yet frequently lack binding commitments and funding for real results.

Multi-stakeholder initiatives intend to foster sustainability in the coffee sector, as seen in the Global Coffee Platform, Sustainable Coffee Challenge, and ICO Coffee Public Private Task Force. Their success often hinges on securing financial support and active engagement from the large coffee roasters. While these collaborative efforts may create an appearance of progress toward sustainability, they ultimately fall short in addressing the root causes of challenges within the coffee sector.
Policymakers are adopting mandatory sustainability legislation to regulate agricultural value chains. This development is expected to bring about significant changes in how coffee is produced, traded and consumed.

For example, the EU’s Deforestation Regulation (EUDR) is a groundbreaking effort to ensure that major companies trading agricultural commodities are not contributing to global deforestation. The EUDR puts the onus on companies to prove their suppliers are not contributing to deforestation. This transition acknowledges the need for assertive measures to steer agricultural practices toward environmental and ethical considerations.

The era of cheap coffee has come to an end!

To advance its sustainability agenda and underscore the significance of farmer inclusion and adaptation to climate change, the coffee sector must commit to investing in vulnerable coffee-producing regions. Coffee companies, with their resource capacity,need to double down and avoid abrupt disengagement with less competitive coffee producing countries. Continuous collaboration with local actors, including government, civil society and producer groups, is essential to address sustainability issues with customized solutions.

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