When purchasing food and drinks, we are faced with so many options, from special dietary formulas to organically grown. Among some of these is the option to purchase food products that have been ethically produced or manufactured.  How can we be certain that our food has been grown and manufactured ethically? Undoubtedly, you have probably at least heard the term “Fair Trade” being tossed around.  So, what exactly is the Fair Trade certification and what does it have to do with coffee?

Fair Trade

Fair Trade is one of the two most commonly used buying models in the specialty coffee industry.  Its standards are regulated by a non-profit, independent, third party, FLO-CERT. Producers that want to add the Fairtrade label to their goods must apply to receive certification through FLO-CERT, guaranteeing that they meet all of the qualifications. The fair trade buying model is community structured and all financial transactions are made between the roaster and the cooperative: it ensures quality products for the consumer and a fair deal for the work done by the growers. FLO-CERT sets several ethical standards in place, including a minimum price guarantee paid to the cooperative and the Fairtrade premium.  The goal of setting the Fair Trade standard is to develop impoverished communities, create an ethical and sustainable workplace, ensure that producers receive a fair price for their work, and provide consumers with a quality product. Adding the FLO-CERT Fairtrade guarantee assures the consumer that the product they are purchasing was produced and traded under fair circumstances, helping to empower developing communities.

Direct Trade

The other buying model often used in the specialty coffee industry is Direct Trade.  How does it differ from Fair Trade? To begin with, its standards are determined and regulated by the roasters themselves. Since there is no independent certification process, the consumer must really trust the judgement of the roaster.  This brings about the need for roasters to become transparent and communicate their buying process to the consumer.  Roasters will often make visits to the farms to ensure that these standards are met and to evaluate the quality of the coffee.  When the roaster decides that the coffee meets his standards,  the financial transactions are made directly with the farmer.  Because the roasters are so personally connected with the coffee farmers, feedback can be given to the farmers on the quality of the coffee. The roasters are heavily invested in the coffee and their long-term relationships with the farmers encourage community development and environmental stability.

Visualising the Difference

There are plenty of opinions on which model is “better,” but those in the specialty coffee industry tend to favour the Direct Trade model because of the ability for the roaster to ensure coffee quality.  Again, the element of trust is important.  While the FLO-CERT standards provide certain guarantees of fairness, the labels are expensive to attain.  For smaller-scale roasters, it doesn’t financially make sense to seek these labels, especially considering that the fees must be paid for each product’s packaging.  Without some sort of reputable certification, roasters need to really show the consumer how their coffee is acquired.  The story of the relationship between roaster and farmer is an important one to be told! It is also an issue for roasters who do not have the critical mass to trade directly with the farmers; they must rely on middlemen to find quality coffees.  Trust remains an issue; the longer the supply chain becomes, the less transparent the trade process.

If you look at the two buying methods side by side, you can see how direct trade and fair trade tackle the supply chain differently.  Bird Rock Coffee Roasters put together a nice infographic that displays the differences in Fair and Direct Trade at each step of the buying process:

On a Smaller Scale…

Both buying models do great things for the producers and the community, but in the case of small-scale specialty coffee roasters, Direct Trade has some benefits. Direct Trade targets individual producers rather than producing communities, but the buying process ensures more for the farmers. Farmers are typically paid a bit more for their coffee, and the direct contact they have with the roasters encourages the security of long-term business partnerships.  In these partnerships, mutual respect and trust are developed; farmers may even find themselves eligible for bonuses and rewards from the roaster when they produce coffee that exceeds expectations! Small-scale roasters develop these partnerships without being able to provide the certifications of a third-party system like FLO-CERT, but avoid the costs of the label. When done with absolute transparency and ethical motives, the principles of direct trade allow small-scale roasters to receive great coffee and encourages farmers to put forth their best product. 

Next time you buy your coffee beans, enquire about Fair Trade and Direct Trade.  It’s important to have an idea of where your coffee beans come from and who the people behind your daily cup are.  One of our roasters, OR, works with farmers using Direct Fair Trade. This process incorporates all of the transparencies of Direct Trade and ensures that there is a clear link between the roaster and the farmer.  We had the chance to discuss direct fair trade with Tom a while back.  You can read all about the process and their trip to Rwanda here!

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