Choosing the Right Coffee: Seriously, What Does Buying Direct Trade Really Mean?

By Nadia Ho and Joyce Thung

Getting to Real Positive Social Impact — Fair Trade Vs. Direct Trade

Making a cup of morning Joe involves more than water and a French press. How coffee ends up in your supermarket is a muddy process, where many conventional coffee bean farmers receive low wages and endure long work hours. To address these issues, multiple Fair Trade certifications aim to empower coffee bean farmers, provide better wages and working conditions. To attain Fair Trade status, coffee bean farmers must meet environmental and social standards placed on the coffee bean production process. These standards bring a higher price paid for Fair Trade coffee, which was designed to ensure coffee bean farmers receive a fair share of the profits. Unfortunately, suppliers down the line can charge consumers higher premiums without passing that difference onto the farmer. At the end, who really benefits from Fair Trade?

At the end, who really benefits from Fair Trade?

Due to growing problems with Fair Trade, the Direct Trade movement was born. Instead of depending on an established, but expensive certification process, companies work directly with coffee bean farmers individually to ensure high quality beans, sustainable and progressive farm practices and responsible labor management. As part of an effort to better understand the Fair Trade vs. Direct Trade process in our own local community, we interviewed five Los Angeles-based Direct Trade coffee shops committed to cultivating long-term partnerships with coffee bean farmers.

However, our interviews revealed that quantifying social impact is a challenge.

We learned that Counter Culture in Los Angeles set a goal to build long-term relationships with their coffee farmers and cultivate better tasting coffee in an economically, socially, and environmentally sustainable manner. Counter Culture does this by purchasing large volumes of coffee at multiple tiers, implementing a sustainability grant program to assist farmers, and facilitating climate change adaptation research with its partners. However, our interviews revealed that quantifying social impact is a challenge. While some of the Direct Trade coffee shops hoped to show customers their positive impacts from the Direct Trade process, they were often limited by money and manpower. Several coffee shop owners confessed they worried about giving the appearance of “greenwashing” or misleading customers with superficial statistics that fail to show a real change in the coffee industry.

In our interviews, Cafe A and Cafe B’s top priorities aligned with other coffee shop owners to create the best tasting coffee and a positive impact in the world of coffee production (To respect the privacy of the coffee shops we interviewed, we changed the shop name to generic Cafe A, B, C….). Quality was non-negotiable because high quality coffee beans drive value for small, independent coffee shops. Sustainable practices were just as important because these coffee shops only work with farms that adopt progressive practices. On the other hand, Cafe C and Counter Culture cited other priorities. For Cafe C, it was “certified organic”, source trace-ability, and reputation with the ultimate goal of building long-term relationships with partners. Since Direct Trade coffee shops choose coffee producing farmers based on quality, their decisions are tied to sustainable practices such as progressive farm and labor management. For Direct Trade coffee shops, the commitment to high quality bean, responsible bean production and cultivation of long term partnerships are the end goal.

For Direct Trade coffee shops, the commitment to high quality bean, responsible bean production and cultivation of long term partnerships are the end goal.

As coffee consumers, you have the power to impact responsible coffee bean production and manufacturing process which results in healthier soils and happier farmers who can provide their families nutritious meals and send their children to school. You can decide where to spend your hard earned money. So, where can you make the most impact with your dollar? Should you purchase Direct Trade or Fair Trade coffee? With Fair Trade Certified products, you have a better idea of the baseline social and environmental practices you are supporting, but the real impact to the coffee farmers and their community is not clear. With Direct Trade products, the benefits can similarly vary.

So, where can you make the most impact with your dollar? Should you purchase Direct Trade or Fair Trade coffee?

The presence of a Direct Trade relationship between coffee shop owners and coffee bean farmer allows you to discover the benefits easily. To evaluate the social responsibility of the cup of coffee you just purchased, one easy approach is to just ask your local coffee shop owner. That is one of the best benefits of Direct Trade coffee. You can develop a personal relationship with your local coffee shop owner and through that relationship you can put a name to the farmer who contributed to that perfectly roasted cup of coffee. And you understand how your coffee choice led to a more empowered farmer! With big, corporate coffee companies, it’s challenging to obtain transparent information or understand the true sustainable practices put in place.

So, go ahead — ask your local coffee shop about their sustainability practices and sourcing standards. Here are a few questions to start with:

Which farmer or farming community do you Direct Trade with to get your coffee?

How do you think working with this farmer will improve their livelihood?

How does this relationship positively impact the farm land?

What type of sustainable farming methods am I supporting with this coffee purchase?

You’ll not only start a conversation, but perhaps even inspire business owners to realize the need for transparency and they will respond in kind.

Clear, Measurable, Positive Impacts

As coffee drinkers, a globally traded cash crop, we should expect clear, measurable positive impact results from coffee shops and companies working hard to adopt social responsible practices (not just reports of negative practices). When we buy our daily cup of Joe from a Direct Trade coffee shop, wouldn’t it be wonderful and inspiring to see their positive social impact from committing time and resources to obtain responsibly harvested coffee beans? Wouldn’t it be amazing if we can see our personal social impact from buying more responsibly and thoughtfully?

Nadia Ho and Joyce Thung conducted the research and interviews during their internship with HOVE Social Good, and as part of their Sustainability and Business class at UCLA’s Anderson School of Management. Nadia and Joyce are committed to creating greater social impact all around us. Nadia is completing her Master’s of Public Health and Leaders in Sustainability Certificate from UCLA. Joyce recently graduated from UCLA Fielding School of Public Health with her Masters.

The following references discusses details of Fair Trade and Coffee:

Macdonald, 2007. Globalising justice within coffee supply chains? Fair Trade, Starbucks and the transformation of supply chain. Third World Quarterly. 28(4), 793–812. governancehttps://www.tandfonline.com/doi/full/10.1080/01436590701336663?src=recsys

Modelo, M. (2014). The paradox of fair trade. Stanford Social Innovation Review. Retrieved 12 March 2018 from: https://ssir.org/articles/entry/the_paradox_of_fair_trade

Darian, J. C., Tucci, L., Newman, C. M., & Naylor, L. (2015). An analysis of consumer motivations for purchasing fair trade coffee. Journal of International Consumer Marketing. 27(4), 318–327.

Counter Culture Transparency Report. https://counterculturecoffee.com/transparency-report