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Table of Contents
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Table of Contents
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By
Ru Chen
Key Takeaways
A delicious beverage popular around the world, coffee is enjoyed by around 40% of the world’s population. However, the coffee industry isn’t all fun and games as it faces issues surrounding fair trade, sustainability, price volatility, and market saturation.
Let’s delve into the complex world of coffee economics, reveal its darker side, and explore how to source ethical coffee.
Coffee is one of the most traded commodities in the world. The coffee market includes over 100 species of coffee, with Arabica and Robusta dwarfing the others in terms of popularity.
Commodity trading of coffee involves buying and selling coffee beans on future exchanges like the Intercontinental Exchange (ICE) and the New York Mercantile Exchange (NYMEX). Market participants use these exchanges for better price discovery and risk management, which are essential in an industry rife with price volatility.
The lack of balance in the coffee industry is often seen as its greatest challenge. Modern pricing models have not been able to catch up with every coffee company and farmer, leading to poverty as many coffee farmers are still not paid a living wage.
The price of coffee is constantly fluctuating due to numerous factors, such as:
These lead to a constantly turbulent coffee price that makes it difficult for coffee producers to plan for the future. As a negative side effect, this price volatility also discourages coffee producers from investing in sustainable practices due to the uncertainty.
Adverse weather conditions and changing global climate patterns are major supply-side factors that contribute to rising coffee prices. Hurricane and tropical storm seasons can cause significant damage to coffee cultivation.
In particular, Brazil, which is the world’s largest coffee producer, has been seeing higher levels of precipitation that hurts coffee production. Arabica coffee in Brazil has suffered through rough fungal diseases and hampered plant root growth due to poor weather conditions.
Other than the cost of coffee and whether the coffee grows in abundance, numerous factors exist to affect coffee prices. Fuel, equipment, and processing methods can all make the price of coffee more volatile and unpredictable.
With almost half of the world’s coffee produced by small farmers, it’s important to know about the history of fair trade and ethical concerns involved in coffee production. Coffee has been historically associated with child labor and slavery, raising serious ethical concerns all over the world.
Fair trade organizations offer initiatives that tackle inequities and inhumane working conditions in the coffee supply chain so that coffee farmers receive fair wages. They set minimum price standards to promote sustainable and ethical coffee production and also provide certifications for coffee producers.
In recent decades, the fair trade movement has gained significantly more momentum as consumers become more eco-friendly and conscientious of ethical concerns behind coffee production. For example, the Specialty Coffee Association of America greatly encourages sustainability in coffee production and consumption, urging people and companies to continue their support of ethical coffee.
In some regions, the excessive use of pesticides and chemicals is involved in coffee farming. While more regulations have been established to curb the use of dangerous chemicals and pesticides, not all coffee farmers follow these regulations. Producing coffee is also incredibly water demanding.
Coffee farming has created a negative impact on forests and ecosystems–sun grown coffee in particular. This type of coffee has resulted in more forests being cleared through deforestation to make way for the production of high-demand coffee.
When consumers pay low prices for coffee, the coffee workers behind the scenes might not be receiving fair wages. Coffee farmers in developing countries often rely on coffee as their primary source of income. When coffee prices plummet due to economic factors and price volatility, farmers will end up struggling to cover their costs of production. These coffee farmers become forced to switch to other crops or abandon their established coffee farms.
Along with other factors, coffee price volatility has resulted in a long term instability and imbalance within the coffee industry. While coffee farmers produce valuable coffee, coffee companies don’t always pay fair wages. These companies try to cut down on costs to make larger profits even at the expense of small coffee communities that rely on farming coffee for a living.
Fortunately, more coffee companies have committed to only sourcing coffee ethically. Ethical practices vary between companies, but in general that means:
It is essential to support fair trade certified coffee companies that pay their farmers fair prices for coffee and choose sustainable and ethical practices.
Businesses and individuals can take steps to source and buy coffee ethically. Supporting fair and sustainable practices in the coffee industry is essential so that these practices continue into the future.
When buying your coffee or joining a coffee club, look for a Fair Trade label. This type of certification shows that the coffee company pays a fair wage to their coffee farmers and supports fair practices.
A coffee company with organic certifications grows coffee without pesticides, fertilizers, or various harmful chemicals. The company must comply with organic regulations throughout the coffee supply chain.
You may notice some coffees are Direct Trade Certified. This means that the coffee companies establish direct trade relationships with coffee farmers. Since they buy directly from the coffee farmers without any middleman, they can ensure fairer prices while contributing to the communities that produce coffee for them.
Note that Direct Trade Certified coffee is often sold at a premium price, which means budget-conscious coffee buyers may want to consider the price before buying.
The Fair Trade certification is not the only one of its kind. Other legitimate certifications also serve to highlight sustainable practices. Here are some of the most coveted certifications you should keep an eye out for when buying coffee:
When purchasing coffee beans, check for whether the merchant is transparent about how they source coffee and whether they employ ethical, sustainable practices. Brands that provide detailed information about the origins of their coffee beans and highlight their commitment to fair trade tend to be more ethical and sustainable.
An added benefit to consumers supporting transparent, ethical coffee brands is that this support shows companies that people care about ethics and sustainability in their coffee.
Learning more about the coffee industry can help you understand better how to source ethical coffee. As with other industries, the coffee industry is constantly changing with new inventions and regulations on the horizon. Only by continuously staying aware of the latest trends and news can you stay on top of making informed choices when buying coffee.
Coffee clubs are a great way to try out quality coffee from around the world, delivered straight to your doorstep at your convenience. Here are some of the best, ethical coffee clubs we recommend.
Atlas Coffee Club delivers you ethically sourced single origin coffee from over 50 countries. For each delivery, you can choose your number of bags, shipping frequency, roast preference, and grind type. Not only do coffee club members receive exclusive, high quality roasts every month, but each delivery also comes with a special postcard, tasting notes, and brewing tips for the batch.
Price: Starts at $9
Shipping frequency: Every 2 or 4 weeks
Member perks and customization: You can choose your roast preference and ideal grind
Pros:
* Sustainable packaging
* Fair wages to farmers
* A wide range of freshly roasted coffee from 50+ countries
* Delicious single-origin coffee beans
* You can choose your grind and roast preference
* Enjoy gorgeous packaging and postcards
* It’s easy to cancel your subscription
Cons:
* Wide variety may be undesirable for picky coffee drinkers with strict flavor preferences
* Only one coffee flavor featured per month
* Can get quite expensive if you choose certain customizations and roasts
Driftaway Coffee is a fantastic coffee club that offers high quality coffee without forgetting about ethical sourcing or sustainability. Since being founded in 2014, Driftaway Coffee has committed itself to sustainable practices, energy efficiency, and a low carbon footprint. They aim for carbon-neutral operations through only using energy-efficient coffee roasters and compostable packaging.
Driftaway Coffee starts your coffee subscription with an exciting explorer kit that features 5 coffees from around the world. You can do a coffee tasting either by yourself or with an expert via Zoom. Using your feedback, Driftaway Coffee will tailor your future coffee deliveries to your flavor profile.
Price: $16+
Shipping frequency: Monthly or biweekly
Member perks and customization: Expert-guided coffee tasting process
Pros:
* High quality, ethically sourced single origin organic coffee beans
* Comes with an explorer’s tasting kit and an expert to help you discover your flavor preferences
* Chooses compostable packaging
* Uses energy efficient roasters
Cons:
* All beans are roasted in-house, which means less variety
* Having a tasting kit first means it’s less cost efficient for coffee aficionados
* Can get expensive depending on your customizations
Peace Coffee, a Certified B Corp, woman-led coffee company, has a long history of supporting fair trade and organic coffee before it was mainstream. Founded in 1996, Peace Coffee has made valuable connections with small scale coffee farmers to better understand the impact of coffee farming and production on communities.
Price: $12.75+
Shipping frequency: Every 2 weeks to every 3 months
Member perks and customization: Free shipping on orders over $40
Pros:
* Long history of ethical practices
* Exclusively buys fair trade organic coffees
* Supports small-scale farmers
* LGBTQ+ friendly
* Build your own subscription option
Cons:
* Relatively fewer sources of coffee
* You need to pay $40 before receiving free shipping
Trade Coffee ships freshly roasted coffee directly to you so you can enjoy ethically sourced coffee from top roasters around the country. Trade Coffee offers an expansive variety of coffees, including single origin, blends, decaf, pour over, and espresso. Plus, all 450+ coffees are ethically sourced from small roasters, ensuring high quality and fair prices.
Price: Starts at $15.75 per bag
Shipping frequency: Weekly or biweekly
Member perks and customization: Free first bag
Pros:
* You can take a quiz to find out your coffee preferences
* Wide range of coffees you can choose from
* Trade Coffee lets you shop by plan or brew type
* Great gift box and subscription options
Cons:
* Can get expensive
* Coffees options can taste similar to each other
* If you want exclusive access to specialty coffees, Trade might not be for you
Ethical coffee means paying coffee farmer fair wages and incorporating sustainable practices. Unethical coffee production only serves to hurt coffee farmers and worsen the imbalances within the coffee industry.
While challenges such as ruinous tropical storms remain unpredictable hurdles for coffee farmers, price volatility and lack of fair wages make it even harder for many coffee farmers to invest in farming infrastructure and improvements. That is why it is important to support ethical coffee production.
Both consumers and businesses can make a huge difference in contributing to the well-being of coffee farmers and the long-term stability of the coffee industry. When sourcing coffee, choose coffee companies that are Fair Trade Certified, practice ethical sourcing, and emphasize sustainability.
Ru Chen
Content Writer
Ru Chen is a content writer with several years of experience in creating engaging and well-researched articles. She mostly writes about coffee, business, digital marketing, and law. In her free time, she can be found watching horror movies and playing board games with her partner in Brooklyn.
Ru Chen is a content writer with several years of experience in creating engaging and well-researched articles. She mostly writes about coffee, business, digital marketing, and law. In her free time, she can be found watching horror movies and playing board games with her partner in Brooklyn.
Edited by:
Bryan Huynh
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Product Tester & Writer
