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U N C TA D / W T O
Product and Market Development
An exporter’s guide
Special print of chapter 3: Niche markets, environment and social aspects
International Trade Centre
Product and market development
An exporter’s guide
Special print of Chapter 3: Niche markets, environment and social aspects
Geneva, October 2002
This page refers to the complete publication: Coffee: An exporter’s guide.
ABSTRACT FOR TRADE INFORMATION SERVICES
2002 SITC 071 COF
INTERNATIONAL TRADE CENTRE UNCTAD/WTO Coffee: An exporter’s guide Geneva: ITC, 2002. xxii, 310 p. Guide on coffee – provides overview of world coffee trade, demand in importing countries, prices, statistical data; discusses niche markets, environment and social aspects; highlights organic coffee production, marketing and quality control issues; reviews contracts and deliveries, shipping, financial aspects and insurance, electronic commerce and supply chain management, dispute resolution, arbitration, futures markets, and hedging; explores commercial risk and risk related to trade credit issues; describes marketing systems; gives coffee producers’ country profiles. Annexes include International Coffee Agreement 2001, list of useful web addresses. Subject descriptors: Coffee, Export marketing, Prices, Statistical data, Contracts, Insurance, Electronic commerce, Supply management, Quality control, Arbitration, Export credit.
English, French, Spanish (separate editions) Palais des Nations, 1211 Geneva 10, Switzerland
The Government of Denmark financed the preparation and publication of this guide.
The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the International Trade Centre UNCTAD/WTO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Mention of firm names and their websites, commercial products and brand names does not imply the endorsement of ITC.
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ISBN 92-9137-241-2 United Nations Sales No. E.02.III.T.6
The main contributors to Coffee: An exporter’s guide were: Hein Jan van Hilten, coordinator and principal author of the guide (niche markets, sustainability and related issues, contracts and arbitration, logistics and insurance, electronic supply chain management, financial risk and credit, marketing systems, coffee quality and quality control issues); Independent Coffee Development Consultant; former Chairman of the Mild Coffee Trade Association of Eastern Africa, Nairobi. Email: email@example.com Paul J. Fisher, principal consultant and collaborating author (contracts, coffee trading, e-commerce, price risk management, futures markets, hedging, general review); Independent Coffee Consultant; former Chairman of the Board of Directors of the Green Coffee Association and Chairman of the GCA Contracts Development Committee, New York. Email: firstname.lastname@example.org Michael A. Wheeler (economic issues, mainstream markets, trends and statistical information); Independent Coffee Economist; former President of the Specialty Coffee Association of Europe, London. Email: email@example.com Morten Scholer (management issues); Senior Market Development Adviser, Market Development Section, International Trade Centre UNCTAD/WTO, Geneva. Email: firstname.lastname@example.org This guide was made possible through the voluntary contribution of expertise, experience, insider knowledge and valuable time by the people, companies and organizations below, whose assistance is acknowledged with thanks and appreciation.
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
Gerd Boschen, former Managing Partner, Nikolaus Reuter, Bremen, Germany Ted Davis, Director of Corporate Communications, New York Board of Trade, New York, United States of America Captain Reinhard Diegner, Vice President, Lampe & Schwartze Insurance, Bremen, Germany Dick Engelsma, General Manager, Decotrade AG, Zug, Switzerland Mauk Faber, Director, Global Structured Trade Finance, Rabobank International, Utrecht, the Netherlands Michael P. Flynn, Chairman, European Coffee Federation Contracts Committee, London, United Kingdom Laut Hilckmann, Immediate Past Chairman, European Coffee Federation Transport Committee, Utrecht, the Netherlands Patrick F. Installé, Managing Director, EFICO n.v. Green Coffee, Antwerp, Belgium Jasper P. van Schaik, Manager, Coffee Cocoa and Dairy Desk, Global Commodities Group, Fortis Bank, Amsterdam, the Netherlands Garth Smith, President, Organic Products Trading Co., Vancouver, Washington, United States Roel Vaessen, Secretary General, European Coffee Federation, Amsterdam, the Netherlands Jan van der Wyck, retired Shipping Executive, P&O Nedlloyd, Rotterdam, the Netherlands Paul Wilkes, Director, Complete Coffee Limited, London, United Kingdom The International Coffee Organization The European Coffee Federation The Green Coffee Association of New York The All Japan Coffee Association
Simon Lévelt BV. Knudsen Group. United States Roland Meier. Joerg. United Kingdom Carlo Delfs. Brielle. E. New Jersey. United Kingdom Ernesto Illy. Kraft Foods International. Chinchiná. Canada David R. United States Paul Katzeff. Institute for Marketecology. Brazil Maurice Blanc. Seattle. Cenicafé-Federacafe. New Rochelle.p. UNOPS. London International Financial Futures and Options Exchange. Don Mills. Col. United Kingdom M. CTA–CFC Projects. Statistician. United States Ward de Groote. Kenya Jan Meijer. J. Japan Clive A. Nairobi. Stichting Max Havelaar.S. East Grinstead. Hackettstown. University of the West Indies. Utrecht. the Netherlands Hidetaka Hayashi. Wolff & Company BV. Haarlem.a. São Paolo.iv ! ! ! ! ! The New York Board of Trade – NYBOT The London International Financial Futures and Options Exchange – LIFFE Kraft Foods International Nestlé Sara Lee / DE Contributions and assistance from the following are also gratefully acknowledged. Switzerland Sergio Beczkowski. Menon. Contango Markets Ltd. E. Switzerland Gerrit van Elst. Johnson. Brazil Gabriel Cadena Gomez. Douqué’s Koffie BV. Société Générale de Surveillance SA. United Kingdom . Switzerland Rebecca L. Philadelphia. Zug. Pinhal. the Netherlands Stephen Dunn. Walter Matter SA. P&A Marketing International. Zug. United Kingdom Joris G. St Augustine. Remarc. Information Technology Developer. Ahold Coffee Company BV. Santos. Trinidad and Tobago Sue Mecklenburg. Amstelveen. Trieste. the Netherlands Jos Harmsen. United States Sandy McAlpine. Nestec Ltd. United States Soren Knudsen. Thanksgiving Coffee Co. Seattle. Claeys. London. Independent Coffee Consultant. ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Rainer Baechi. London International Financial Futures and Options Exchange. Brazil Paula A Koelemij. Colombia Ivan Carvalho. Starbucks Coffee Company. Horten. Starbucks Coffee Company. Vevey. London. Vevey. Geneva. the Netherlands Karl Kofler. Commodity Group Procurement KF1. Kenya Bernard Gaud. J. CoffeeLab Private Ltd. South Dakota.. New York. McGaw. United States Robin Dand. IMO. Illycaffè S. Barbara. Kraft Foods International. Switzerland Daniele Giovannucci. National Coffee Research Center. Accelerate Supply Chain Solutions. Pennsylvania. Commodity Group Procurement KF1.M.R.net. India Malcolm Wall Morris. Zaandam. United States Michael C. van Hilten. Fort Bragg. former Managing Director. Switzerland Francisco van der Hoff Boersma. United Kingdom Carlos H. United Kingdom Clive H. Switzerland Sipke W. Glenister. Zug. Switzerland Alf Kramer. Amcafé Inc.J.Th. Furness. Tokyo. Norbert and Reinier Douqué. the Netherlands Sunalini N. Man Coffee Limited. London. Washington. Italy Christian A.P. Washington. Zug. Decotrade AG. Commodity Group Procurement KF1. de Jong. Ontario. Sulgen. Coffee Association of Canada. Nestec Ltd. Bangalore. Hayashi Coffee Institute. Switzerland Frans. Mexico Bolero. & F. Switzerland John Eustace. Gathaara. Kraft Foods International. Switzerland Romeo S. Norway Dennis Macray. Geneva. California. Agribusiness Consultant. International Coffee Organization.H. Estación. London. Sioux Falls. Brando. science writer. Coffee Research Foundation. Ruiru.. BM&F (Brazilian Mercantile & Futures Exchange). Zug. Decotrade AG.D.
Senior Vice President. former Chairman. Interafrican Coffee Organisation.. Mexico David Wehrli. Interafrican Coffee Organisation. Blaser & Wolthers Specialty Coffee. contributions and assistance were offered by: ! ! ! ! ! ! Peter Walters. South Dakota. United States Mike Ritchie. United States Philippe D. Switzerland Birgit Wilhelm.G.. Missoula. Environmental Solar Systems. Price Peterson. Onzima. Administrative Support. Miami. Garcez Ourique. United Kingdom Robert F. Boston. Consejo Salvadoreno del Café. Leiden. Abidjan. Papua New Guinea Coffee Industry Corporation. TransFair USA. Florida. London. El Salvador Rinantonio Viani. Amsterdam. Starbucks Coffee Company. Naturland-Verband. Gillett. Organic Production and Marketing Consultant. United States Susie Spindler. North Battleford. Uganda Doan Trieu Nhan. New York. Witts. Andar-Centro. Washington. Nestlé Research Center. Rainforest Alliance. Cincinnati. Managing Director. The board comprised: ! ! ! ! ! ! Abba Bayer. Switzerland Joost Pierrot. Denmark David Towler. Wolthers. Mexico City. Wood. London. Kampala. Zurich. Oakland. Utz Kapeh Foundation.. United Kingdom Panos Varangis. former Secretary General of the Federação Brasileira dos Exportadores de Café (FEBEC). Switzerland Francisco E. J W Phyfe & Co. Vevey. Fortis Bank. Guatemala Srren Sylvest. Chief of Market Development Section Rudy Kortbech-Olesen. United Kingdom Gordon S. International Coffee Organization.v ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Kerry Muir. Copenhagen. Boquete.. Complete Coffee Limited. Sara Lee / DE. Hanoi. California. Washington. Division of Product and Market Development Bertil Byskov.A. Canada Aimee Russillo. consultant. Chinchiná. London. Denmark Birthe Thode Jacobsen. Oster DowJones Commodity News. Vietnam Coffee & Cocoa Association. Utrecht. the Netherlands Ria Stout. Senior Market Development Adviser Bastiaan Bijl. New York. Antigua Guatemala. D. Seattle. Ohio. United States Special acknowledgement is made of the valuable assistance and guidance received from the members of the editorial review board. Head of Operations. Switzerland Maja Wallengren. Viet Nam Ronald J. Panama Alain Pittet. Côte d’Ivoire R. ICO Statistics Committee. the Netherlands The Procter & Gamble Co. Nestec Ltd. Estate Coffee. Director. Montana. Inc. United States Pablo Dubois. Sioux Falls. Massachusetts. National Coffee Research Center. Cup of Excellence. Cenicafé-Federacafe. Associate Market Analyst Alison Southby. Copenhagen. Abidjan. United States Eric C. New York. Editorial and Publications Officer and Carmelita Endaya. Market Development Section . Graefelfing. National Coffee Association of USA Inc. Migros-Genossenschafts-Bund. United States Gloria Inés Puerta Quintero.D. TFC Commodity Charts. United States Henry Ngabirano. Hacienda la Esmeralda.C. van der Stegen. Germany Mary Williams. Colombia Paul Rice. United States Paul Soucy. Scanagri. Overseas Representative. the Netherlands Christian B. Brazil Josefa Sacko. Côte d’Ivoire Mick Wheeler. Saskatchewan. Uganda Coffee Development Authority. United States Luis Rodriquez Ventura. Corseaux. United States Gerrit H. The World Bank. Papua New Guinea At ITC. Goroka. Secretary General. Lausanne. Nelson. USGS/Eros Data Center. Editorial and Publications Unit Kathryn Della Corte.
environment and social aspects Contracts – concluding and executing Logistics and insurance E-commerce and supply chain management Dispute resolution – arbitration Futures markets Hedging and other operations Risk and the relation to trade credit Coffee quality Marketing systems and country profiles 3 27 64 90 114 139 153 169 190 213 243 290 309 Appendix: Useful websites .vi Contents of the complete Coffee: An exporter’s guide Acknowledgements Note iii xxi 1 Introduction Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 World coffee trade – an overview The mainstream market Niche markets.
1999–2001 Guaranteed minimum Fairtrade coffee prices. pages 309–310) . in cents per pound 64 64 65 65 65 68 68 69 70 70 70 70 71 72 72 73 73 75 75 76 76 78 78 79 81 81 82 82 82 83 84 84 84 86 86 88 89 89 77 87 88 Conversions into green bean equivalent (GBE) (Chapter 1. 1986/87–2000/01 (Chapter 1.vii Contents CHAPTER 3 Niche markets. page 2) World production by coffee year. codes of conduct and social issues Sustainability Integrated farming systems The European Retail Protocol for Good Agricultural Practice Codes of conduct Fairtrade Objectives Using Fairtrade labels Minimum tonnage Applying for FLO certification Table 17 Table 18 Table 19 Estimated consumption of organic coffee in 2002/03 in major consumer countries Sales of Fairtrade roasted coffee. by value and volume. environment and social aspects The specialty market The meaning of specialty Niche markets Quality segmentation of coffees Organic coffee Introduction What are organic products? What is organic coffee and why grow or buy it? Definition Why do consumers choose organic coffee? Why produce organic coffee? Growing organic coffee Processing and marketing organic coffee – the audit trail Certification and import Organic regulations Europe United States Japan World market for organic coffee Organic coffee and small producers Certification costs and viability Production and export Importing. Annex III) World coffee exports. figure 18) Useful websites (Appendix. sustainability. roasting and retailing Mapping technology in coffee marketing: GPS and GIS Some tools Outlook Trade marking Environment. 1995/96–2000/01 (Chapter 1. table 1) Grading and classification (Chapter 1. pages 17–18) Processing of coffee cherries and green coffee beans (Chapter 11.
reliable quality. Other potential suppliers could adopt strategies such as those below. and on occasion price guarantees have assisted sales. and regular delivery will add value in the sense that the product will be preferred by primary buyers over those from less consistent origins. However. It should be noted that sales of roasted coffee by producing countries direct to foreign retail outlets are generally expensive and difficult. ! If the coffee is of satisfactory quality. they will of course be encouraged to seek alternative sources. Top Kenya AA and Guatemalan Antiguas. Unfortunately. the availability. Certain growths of coffee may be highly prized for their flavour characteristics and attract a suitable premium. Consumer awareness of the origins they drink does lead to product loyalty and the development of a brand image. a roaster who markets such a blend will need to be assured of consistent quality and regular delivery. If roasters are unable to obtain regular supplies from one exporter. strict compliance with contractual obligations. Hawaii Kona. sales should be directed to roasters who buy direct from origin (or through a suitable agent) and who retail single origin coffee either in their shops or through other retail outlets. regular delivery of Colombian green coffee. In any case. Besides the promotional effort.CHAPTER 3 Niche markets. very few roasters are actually willing to do this. Some of these growths attract extremely high premiums. Jamaican Blue Mountain attracts such a large premium that the unit value of coffee exported from Jamaica in 2001 was over 13 times higher than the average of all ‘other milds’ producers and more than 16 times higher than the average achieved by all origins. This results in some (albeit limited) protection from the vagaries of the market. . Colombia has adopted an active marketing and publicity policy which has resulted in many brands throughout the world being labelled as 100% Colombian. The top Kenyan grades regularly achieve prices more than double that achieved by other growths. reliable and consistent grading procedures. sales should be directed to roasters who buy direct from origin or agents. Producers should try to ensure that the label of the blend containing their coffee carries a reference to the composition of the blend. For such coffees it is not possible to add monetary value as prices are determined solely by market conditions. but unsuitable either for drinking unblended or for marketing in the premium or gourmet market. environment and social aspects The specialty market It is often neither viable nor possible to add value to green coffee by processing at origin. Many coffees are suitable only for blending or processing into neutral or anonymous end products. Examples include Jamaican Blue Mountain. as has consumer acceptance of its taste characteristics. ! If the coffee is of outstanding flavour or quality.
Usually very well presented washed coffees. often of limited availability. The second lesson is that producers need to target any special coffee very carefully because the term ‘specialty’ covers a large and growing number of different products. and it frequently means different things to different people. environment and social aspects 65 The meaning of specialty The term ‘specialty coffee’ originated in the United States. Usually of quite limited availability. Supply and demand will not only determine the general level of coffee prices. . the very notion ‘gourmet’ or ‘specialty’ suggests some degree of exclusivity. but will also determine the premium paid for ‘quality’. Mostly retailed under straight estate or origin names. in order to differentiate these coffees from coffee generally available through supermarkets and other retail outlets. a niche market is created. Given this lack of precision in definition it is extremely difficult to describe the market in a global way. (See chapter 11. It is fair to say that ‘specialty coffee’ has become a generic label covering a range of different coffees. While much of global coffee production consists of mainstream type coffees. ‘Availability’ is easily understood. However. some Indonesian Arabicas). both single origin and blends. ! Exemplary quality coffees have a high intrinsic value with a fine or unique cup. but also includes some naturals (Ethiopian Harar. The first lesson to be learned therefore is that one should not ‘overdo it’. Yemeni Mochas. The term ‘gourmet’ is also used but is now applied to so many products that it has lost all relevance. It is. including some superior washed robustas. and always has been.Chapter 3: Niche markets. The range includes higher quality coffees. the term has become much looser. It was initially used to describe the range of coffee products sold in dedicated coffee shops. Coffee quality. with the rapid growth in the number of specialty coffee retail outlets and more particularly the expansion of the specialty coffee product range into more mainstream outlets such as supermarkets. The best approach appears to be to look at the specialty market from different country or regional viewpoints. Specialty today refers both to whole bean sales and to coffee beverages sold in coffee bars and cafés (as opposed to restaurants and other catering establishments). The term has become so broad that there is no universally accepted definition of what constitutes ‘specialty coffee’. where the producers or exporters of such a coffee and such a group of consumers get together. Two main factors determine whether a coffee can find a niche market: quality and availability. with greatly varying taste characteristics that appeal to different groups of consumers. which either command a premium price over other coffees or are perceived by consumers as being different from the widely available mainstream brands of coffee. a mistake to consider specialty coffee a different industry from the rest of the coffee business. but ‘quality’ is a subjective term which means different things to different people. and which sell at a premium over mainstream coffees.) Quality segmentation of coffees Broadly speaking. unconventional coffees such as flavoured coffees and coffees with an unusual background or story behind them. each of which has its own niche. Niche markets A niche combines a set of conditions that enable a single species or a single product to thrive within the greater ecological or commercial environment. there are many other coffees. Simply put. However. It is unlikely that one could market thousands of tons of a particular coffee and still call it ‘exclusive’. coffees can be divided into three commercial categories.
and washed as well as superior quality natural robustas. Premiums for specialty coffee can be considerable at the retail level but the premiums available for producers are inevitably much lower. ! Sell to specialty roasters either direct or through importers or agents. something only an importer can easily afford. while the share of exemplary and high quality coffee is no more than 10% or perhaps 15% of the world market. Inventory costs. and mainstream quality in many of the ready-to-drink and flavoured drinks that are sold alongside filter coffee and espresso. including robusta. for example) in which the quality of the underlying coffee sometimes takes second place. Obviously. environment and social aspects top organic coffees. which has helped to arrest the fall in United States consumption. Part of the industry now appears to be moving from past insistence on straight quality and exclusivity towards more manipulated products (flavourings. well prepared organic coffees. The number of specialty coffee retailers importing direct is extremely small. True niche products. although they can still be significant. but not necessarily visually perfect. . The United States specialty market has seen strong development over the past ten years or so. Includes good quality. ! Focus on specialty coffee retailers either by selling direct (for roasting in store) through specialty wholesalers or by selling through specialty roasters. In today’s specialty market all three types of coffee are represented: exemplary and high quality coffees either as stand-alone or as a named blend component. ! High quality or premium brands. Instead they should concentrate on both: specialty for their top quality and mainstream for the remainder of their production. account for an estimated 85%–90% of world coffee consumption. but not always. however. average quality.g. It is sobering to realize that mainstream qualities. well presented. This suggests that for many producers it would be inadvisable to ignore the mainstream market altogether. Much of this has been driven by the Specialty Coffee Association of America (SCAA) (www. Will offer a decent.org).66 Chapter 3: Niche markets. The market for this quality band is much broader and includes a good percentage of today’s specialty coffee. Also produced by leading multinational coffee companies and marketed through normal retail outlets such as supermarkets. retail coffee shops or bars and upmarket delicatessens. Retailed both as straight origins and as blends. late payment costs and even the risk of payment defaults are therefore part of the cost equation. In other words. for smaller exporters of top quality coffee the exemplary segment initially offers more promise. Usually. ! Sell to the leading roasters (through the usual trade channels). The latter in most cases is the more realistic option as these importers or agents have a wide coverage of the small roasters and other retail outlets which are too small to import direct. reasonably well presented but certainly not visually perfect. roasted by comparatively small firms and marketed through fairly exclusive outlets e. if volume sales are required and the coffee sold lacks the flavour characteristics necessary to be marketed on its own. However producers or exporters of good quality coffee have three basic options open to them. ! Mainstream quality.scaa. most roasters purchase subject to approval of the quality on delivery which means the importer will be left with any coffee that does not meet the roaster’s expectations. A further point to note is that sales to small roasters are mostly on extended credit terms. clean but not necessarily impressive cup. Also. the premium for specialty coffee at the wholesale level includes many more factors than just the quality. Increasing sales of espresso-type drinks also mean growing demand for low-acid coffees such as Brazils and robustas at the expense of traditional specialty mild arabicas. good cupping coffees.
Given this strong industry growth and the accompanying proliferation of specialty coffee products.org/standards.. straight origin estate or area coffees. Interestingly. Other emerging specialty markets in Asia would appear to be strongly influenced by trends in the United States. Hong Kong (China). And furthermore. see www. At the same time. larger roasters maintain their own coffee outlets within large department stores – in so doing they of course achieve widespread exposure. This is because creating a stand-alone brand image for an individual coffee would be enormously expensive and without guarantee of success. United States operators have opened or franchised specialty stores in Australia. Singapore and elsewhere. This makes it increasingly cumbersome to deal with many small suppliers. Some such chains have also started importing roasted beans direct from some producing countries in partnership with roasters at origin. is probably greater than in the United States specialty market. the SCAA is in the process of establishing a standard for Certified Specialty coffee. ! Branded blends. Disclosure of origin at retail level is provided for in consumer legislation but as the composition of blends is flexible and they are sold under the roasters’ own brand names.scaa. But the great concentration of buying power in the hands of very few roasters has not made it easy for small producers to . So-called signature blends are often used in the branding strategy of larger companies. The aim is to provide producers.Chapter 3: Niche markets. and it too has distinctive segments: ! Almost mythical name coffee: Blue Mountain. but also to ‘commoditize’ and simplify business. The quality may not always be there. mostly through merger or acquisition. Europe’s total imports are double those of the United States. and as a result increasing dependence on blends because higher sales mean larger and more centralized buying requirements. There are no dedicated specialty importers but most importers handle at least some specialty coffees and increasingly service smaller downstream buyers directly although there is also a network of coffee dealers and wholesalers. other than for a few stand-alone top coffees. exporters. Not only to get bigger. The Northern European specialty market is part of the world’s largest market for coffee. but the coffee is fresh. roasters and retailers of specialty coffee with the means to have the quality and authenticity of their product independently certified. Hawaiian Kona etc.cfm. on the roaster/retailer side – coffee bars and shops ranging in size from international chains at one extreme to firms with just a few stores at the other – the trend has been to follow the example of the Starbucks operation. The programme builds on the existing SCAA Green Coffee Classification System and Grading Chart. mainstream roasters have been upgrading their image by offering ‘quality’ coffees but many have very different perceptions of what this means. Some of the large United States mega-discount stores have installed 30-pound capacity computerized coffee roasters and are selling freshly roasted ‘specialty’ coffee at much lower prices than the traditional specialty stores. ! Good quality. The Japanese specialty market is not dissimilar to the United States. This can mean eliminating or reducing the number of ‘straight’ origin coffees that are carried. As a result price resistance in Japan. The Japanese market basically offers producers the same sales prospects as does the United States with the exception that it is very difficult to gain recognition for new individual coffees. usually only the main components are identified by country of origin (and never by individual grower or producer). environment and social aspects 67 Note here also that espresso drinks generate higher profit margins than do traditional cups of coffee. ! Decent standard qualities. importers.
Larger specialty roasters such as Lavazza and Illy export substantial quantities of Italian espresso blends all over Europe and the United States. rather than large numbers of people who are disappointed in their daily cup of coffee as was the case in the United States. Many of these buy ready-made. The establishment in 1999 of the Specialty Coffee Association of Europe (www. Coffee quality. For instance. for roast and ground or for espresso) to nearby countries in Eastern Europe as well as the many small roasters that operate in Italy itself. and organic dairy products are . and organic products are on offer in all Western countries.com) must therefore be seen as extremely positive in this somewhat uneven playing field. The Southern European specialty market. ready-to-roast green coffee blends from the specialty importers.500 individual roasters: there is a substantial mainstream segment but many small specialty roasters exist and flourish.5% and 3% for food generally.scae. For a review of those requirements and how they differ from traditional specialty coffee see ‘Traditional versus espresso’ at the end of chapter 11. Italy is a gateway into a number of Eastern European markets and many Italian importers and roasters traditionally supply ready-made specialty blends (green or roasted. Organic coffee Introduction Organic products have come a long way since small groups of consumers started buying organic food directly from farms or from small health food shops.68 Chapter 3: Niche markets. by 2001 more than 8% of the entire agricultural area was already under organic cultivation. environment and social aspects add value through improved quality. baby food in Germany and Denmark is reportedly more than 50% organic. but also because specialty coffee in Europe is a true niche market in a continent where much good quality coffee is already readily available. In some countries supermarkets now account for more than 50% of organic food sales. Competition between them and smaller specialty roasters will probably limit the latter’s potential market more than has been the case in the United States. In Austria. with hugely varying quality preferences. It is estimated that 2% of all agricultural land in Europe is cultivated organically. especially for the strong espresso segment. This is mainly because their production is deemed insufficient to be considered for sale as straight origin coffee. The true specialty target segment consists mostly of real enthusiasts searching for something different. or through promotion in Europe. is entirely different from that of most other European countries. The market share for organic products in Western countries ranges between 0. but varies widely for different product groups. so the sales opportunities for specialty type coffee that meets the quality requirements for the espresso trade are quite substantial. In the early 1990s supermarket chains started paying systematic attention to organic food. where quality was secondary as long as the products were organic. Increasing numbers of farmers in developed countries have entered organic farming. where until fairly recently the large roasters did not have any ‘quality’ to offer. In many European countries the opposite applies and both sides are therefore targeting more or less the same niche market. Smaller producers in particular will almost certainly have to depend on specialty importers or agents to access the European market efficiently. Year after year they have taken over market share from the specialized shops. to the point where growth in the market share of organic food today is mostly driven by them. with large operators benefiting from economies of scale the smaller ones cannot match. mainly Italy. The Italian market counts over 1. The entry of Europe’s mega-roasters into this field demonstrates that they appreciate its potential. Exporters should note that the area to be covered is vast.
Certainly the market for organic coffee is difficult to estimate: facts are difficult to come by and aspiring producers must also be careful not to confuse growing insistence on ISO (International Organization for Standardization) and GAP (Good Agricultural Practice) certification. To view these in full go to www. etc. or have often been realized much later than originally predicted. founded 1972) has formulated basic standards for organic products. Requirements for organically produced foods differ from those for other agricultural products in that the production procedures. Vermiculture is the raising of earthworms to aerate soil and/or produce vermicast: the nutrient-rich by-product of earthworms. Labelling and Marketing of Organically Produced Foods (1999) – go to www. such products. will not be sustainable in the long run as it leads to soil degradation and pollution of the environment. Nevertheless. the United States (2000). sometimes with a market share of 25%. the market share in some countries might reach 10%. and not just the product by itself.codexalimentarius. Organic production systems are based on specific and precise production. This means that within five years. 8 9 10 From the FAO/WHO Codex Alimentarius Commission Guidelines for the Production. Processing. biological pest controls and the growing of legumes and shade trees. for the time being organic coffee lies mostly within the domain of specialized. Western annual growth rates for organic products as a whole range from 10% to as high as 40%. Therefore. and has established a budget for subsidies for farmers converting to organic production and for generic promotion of organic products. France for example has targeted 1 million hectares of agricultural land to be converted by 2005 (5% of its total). However. and poses health risks for both consumers and producers. However. Several European Union member states have introduced programmes to promote organic agriculture. The International Federation of Organic Agriculture Movements (IFOAM. They aim to achieve optimal agro-ecosystems that are socially. used as a soil conditioner.8 Advocates of organic agriculture believe that conventional agriculture. ecologically and economically sustainable. with demand for pure organic coffee as such.10 These standards are at the base of the legislation that has been introduced in the European Union (1991).ifoam. and a number of other countries (including Argentina. and soil biological activity (holistic means handling or dealing with an entity or activity in its entirety or wholeness rather than with emphasis on its parts or various aspects). including biodiversity.) by natural compost and vermiculture9. biological cycles. smaller roasters and a few large supermarket chains. Of course the large supermarket chains all carry their own range of organic products nowadays. but not necessarily at the sort of premiums that producers may believe exist. because most large chains do not hesitate to use their buying power to cap prices. For more on regulation issues see later in this chapter. What are organic products? Organic agriculture means holistic production management systems that promote and enhance agro-ecosystem health. are an intrinsic part of the identification and labelling of. Japan (2001).net. and status claims for. processing and handling standards. . India and Mexico) that have created national legislation to regulate the market for organic products. Terms such as ‘biological’ and ‘ecological’ are also used in an effort to describe the organic production system more clearly.Chapter 3: Niche markets. pesticides. organic agriculture replaces manufactured inputs (fertilizers. environment and social aspects 69 best-sellers as well. the rather optimistic growth figures forecast by the organic industry for the last 10 or 15 years have not always been realized. with its use of chemical inputs. In so doing they are undoubtedly raising both the profile and the market share of organics.org. the growing presence of organic coffee on supermarket shelves is prompting large roasters to evaluate the market potential with at least one organic brand in some countries. Bolivia. herbicides.
hoping it will be perceived as truly special. coffee can be marketed as organic only when it is certified as such by a recognized organization or certifier. such as shade grown. In other words. Simon Lévelt/Haarlem. Environmental concerns. the market for organic coffee is increasingly demanding higher quality. The first organic coffee cultivation was recorded at the Finca Irlanda in Chiapas. environment and social aspects What is organic coffee and why grow or buy it? Definition Organic coffee is grown as part of an intensive. which is why organic coffees are often positioned in the specialty segment. and the extra costs involved in organic production. Other consumers are concerned about the negative impact of agro-chemicals on the environment. . No coffee may be brought to the marketplace and labelled organic unless it is proved to conform to the regulations. But there is also a growing body of consumers whose health worries extend to the workers who have to work with the chemicals that are used in the traditional production system. transporting and roasting of the coffee. They are not necessarily concerned only about health issues but primarily want to be sure that the products they buy are produced in an environmentally friendly way in order to prevent pollution. Mexico (1967).70 Chapter 3: Niche markets. but in addition they want to secure their social and cultural future by realizing the premium that certified organic coffee obtains. based on regular inspection of all stages of production. The first organic coffees to appear on the market in the 1980s were good quality arabicas from Mexico. The conditions that must be met before coffee may be marketed as organic are both comprehensive and well defined. Although the quality of organic coffee is not necessarily better than that of conventional coffees. holistic agricultural production management system that includes the composting of organic materials. and GEPA (Gesellschaft für Partnerschaft mit der Dritten Welt). it must be certified as such by a third party. processing. are discussed later in this chapter. which in turn determines the amount of the premium that can be obtained. This benefit depends on the demand for organic coffee. Demand for specialty coffee. This is growing and organic coffees are perceived as belonging to this category. Such a system is based on the principle that a value corresponding to that harvested should be returned to the soil. Mexico (1985). For the product to be marketed as organic. Western countries have developed extensive legislation for organic products. See later in this chapter for more on this. shade regulation and biological pest control. This motive is less important for coffee than it is for some other crops in that roasted coffee hardly ever contains harmful residues. erosion and soil degradation. mulching. and the first organic coffee to be imported into Europe from a small farmers’ cooperative came from the UCIRI cooperative in Oaxaca. a German NGO (non-governmental organization) specializing in alternative trade. Some quality estates or exporters have their coffees certified as organic to underline their quality. Many consumers are increasingly concerned with the content of their daily intake of food and beverages: organic foods are perceived as healthier. Variants on this basic theme. The cooperative converted and marketed its coffee with the help of a joint venture formed by a Netherlands commercial roaster. but nowadays lower grades of organic arabica as well as organic robusta are also available. Why produce organic coffee? In principle producers are motivated by the same concerns as consumers. Why do consumers choose organic coffee? Health considerations. It excludes the use of agro-chemicals.
attention should be given to reduction of energy use and cleaning of water that has been used to wash the coffee. therefore cultivation must be done under diversified shade.europa. planting on contours and/or terraces.int. mechanical practices and flame weeding. rotation programmes. e. and construction of barriers. ! Biodiversity should be promoted. ! Varieties should be adapted to the local climate and be resistant to local plagues and diseases. which is often referred to also as ‘passive cultivation’ or ‘organic by default’. the soil will be depleted by natural production. ! Pests. ! Correction of pH-value with permitted inputs.2001. mulching of the soil under the trees with organic material. This is why passive production of coffee. in the long run. ! Seeds and propagation materials organically produced. use of biological pest control. organic livestock manure and vermicompost. or deep-rooting plants in an appropriate multi-annual rotation programme. shade trees with a lot of foliage leaf. See Annex II of EU-2092/91 for further specifications of approved inputs: www. The principle of sustainable agriculture is that a value corresponding to that harvested should be returned to the soil.g. is more than just leaving out fertilizers and other agro-chemicals. ! Coffee bushes may not be planted too densely. To achieve sustainable production it is necessary to make active use of various organic agriculture techniques including the composting of organic material. diseases and weeds to be controlled by using appropriate varieties. ! Techniques to promote organic content of the soil should be used: growing of legumes. is viewed as non-sustainable and not as organic. lime. (Adapted from CERTIMEX: Normas para la producción de café orgánico/01. According to European Union regulations these standards must be followed: ! Cultivation of legumes. (Minimum standards according to and adapted from EU-2092/91. pesticides and biological pest control methods is limited. even when no chemicals are used. environment and social aspects 71 Growing organic coffee Growing any organic product. ! Incorporation in the soil of organic material.Chapter 3: Niche markets. green manures. This is because. is allowed. Coffee produced in this way should instead be called ‘natural’ coffee and. ! Processing is done only with mechanical and physical means. All possible methods have to be used to enhance the fertility of the soil. ! Use of non-organic fertilizers. a leading organic certifying organization from Mexico. has formulated standards specifically for coffee. including organic coffee. ! Nurseries should be organic and seeds should come from organic coffee fields. incorporation of organic fertilizers and other organic material such as leaves and branches of shade trees. and investing in shade regulation. biological pest control.) .eu. ! Coffee pulp is recycled. ! Erosion should be controlled by: mulching and growing of soil covers.) CERTIMEX. to the surprise of many. the industry looks upon this as non-sustainable production.
a producer may simultaneously grow both conventional and organic coffee. If a producer can document that no agro-chemicals have recently been used. the importation and sale as organic of both green and processed coffee must comply with the legal regulations of the consuming countries. This also means three years of inspection. but all subsequent steps in the production chain have to be certified. . ! Registration. Adequate records are to be kept of incoming and outgoing coffee so that the entire product flow can be documented and accounted for. Spraying or fumigation with toxic agents is never permitted and special measures must be taken to prevent contact with areas where fumigation has taken place. and the certification of an export shipment to be imported as organic coffee. For packaging roasted coffee. import. Coffee may normally be sold as organic only once organic cultivation has been practised for at least three years before the first marketable harvest. All the steps in the chain should therefore be documented and administered in a way that makes it possible to trace back the origin of the product from one step to the next (track and trace). depending on previous agricultural practices. it is certainly worthwhile discussing the possibility with the certifier. methylene chloride) are not permitted. This traceability minimizes the risk of fraud at all stages and is a very important part of the inspection process by certifying organizations. export. ensuring that no contamination with conventional coffee has occurred. transport. There must be a clear separation between the two types and adequate barriers to prevent contamination with agro-chemicals from neighbouring fields. It is important to realize that different rules apply in different countries. although this is not recommended. For the decaffeination of coffee. chemical solvents (e. Processing and marketing organic coffee – the audit trail Not only coffee cultivation. but the water method or the supercritical carbon dioxide method (the CO2 method) may be used. this conversion period may be reduced. The producer selects a certification organization (certifier for short) and signs a contract. but only after approval of the certifying organization. export processing. shipping. Contact with conventionally produced coffee must be excluded and so there has to be a separation in space and/or time. On-farm processing. Certification and import As already indicated. storage. flushing with nitrogen or carbon dioxide is permitted. The flavouring of roasted coffee is permitted when natural flavouring substances or preparations are used. often referred to as traceability. These years are called the conversion period. it is important to try to reduce the conversion period. which in turn has to report such a decision to the authority granting the import permit in the European Union member State concerned. This compliance needs to be verified by a third party. In specific cases. For a producer who can prove that no agro-chemicals have been used in the past.g. the procedure is called certification. roasting and packaging all have to be certified organic.72 Chapter 3: Niche markets. environment and social aspects Usually. The producer provides information on their farm/processing facilities and is registered. The certification procedure includes a number of steps. Note that there is a clear distinction between the certification of an operator to produce organic coffee.
In the context of this chapter the terms ‘certifying or certification organization’. and most unfortunately. the practical application by individual member states of this legislation can differ considerably. they are not always interpreted in this way.g. environment and social aspects 73 ! Inspection. ! Control certificate (formerly called transaction certificate). The inspection report is the basis for deciding whether a master certificate can be granted or not. But the so-called third option (at the time of writing valid until end of 2002) permits competent authorities in individual European Union member states to declare that a certification organization is judged to be operating in accordance with the requirements of regulation EU 2092/91.int. The main problem is that whereas regulations for organic certification are based on equivalence (equal values). such as Naturland in Germany.europa. organic products can be labelled as such only once the entire production and handling chain. At least once a year the certifier inspects the production and processing facilities. In the European Union. The certification process includes an assessment of the grower’s production and export capacity against which the authenticity of future export transactions will be tested. after which the goods may be exported/imported as organic. Accreditation of certification organizations. ! Certification. .Chapter 3: Niche markets.g.ifoam. Also. indicating the exact quantity and organic origin. particularly where products imported from countries outside the European Union are concerned.htm. A review of import regulations in major consuming markets follows. different countries or states (e. e. compiled by UKROFs (United Kingdom Register of Organic Food Standards). The European Union standard known as EN 45011 and the international ISO 65 equivalent both stipulate that certification organizations should be accredited by a recognized accreditation body. This is to ensure that sellers of organic products do not exceed their registered capacity.12 All major European certifying organizations operate according to this regulation. Europe Regulation.11 In the third phase. on the differences between European Union and United States regulations for organic agriculture. IFOAM also has a programme for accrediting certification organizations. although some organizations have stricter standards in some respects. This must be issued for every export shipment. ‘certifying or certification body’ and ‘certifier’ all have the same meaning. Organic regulations In the initial development stages there was no legal definition of organic food and so farmers’ organizations and others formulated their own standards. from the grower through to the importer.gov. The next phase was when IFOAM united these different standards into its ‘Basic standards for organic production and processing’.defra.uk/farm/organic/import/import. is to be found at www. However. A consolidated version. California) developed laws on organic agriculture and processing. and issued certificates and seals to offer consumer guarantees. the market for organic food is regulated by Council Regulation EU 2092/91 of 24 June 1991 and subsequent amendments. In an effort to harmonize standards and certification.eu.13 11 12 13 See www. Some therefore consider such differences as non-tariff barriers leading to unjust treatment of developing country exporters. and also to provide a universal quality seal for organic products. Germany. Alternatively go to www.org for more information on this accreditation programme and for links to other publications. has been inspected and certified. These standards provide a framework for certification bodies and standard-setting organizations worldwide to develop their own certification standards. which were incorporated in formal European Union or United States regulations in the last phase.
is submitted to customs for verification and endorsement. giving details of the exporter or producer. The second point has gained considerable importance since. Logistics). they should be able to submit proof). even though the certifying body lacks direct EN/ISO accreditation. But when all or part of a consignment is to be re-exported as organic to a destination outside the European Union. It is completely different from what happens in the conventional coffee trade.) ! An original control certificate. the competent authority for organic agriculture for the Union State of Hamburg in Germany may declare that products certified by certifier X comply with the requirements of EU 2092/91. Now organic products can only be imported if: ! The importer submits an import permit for the organic coffee in question. For example. (These import permits were always necessary but. not least because each European Union member state has its own competent authority and recognized certifying organization: some are government agencies. Either they require additional information or they simply do not allow such products to be imported as ‘organic’. In this case. but selling full container loads to small roasters in a single European Union market is not easy and so the loads must be split on arrival. sometimes even more than one. environment and social aspects For example. i. the rules governing the importation of organic products into the European Union were considerably strengthened with effect from 1 July 2002. issued by the competent authority in the member state. This presents major administrative problems and is very time consuming and costly.e. This is now impossible and European Union importers require an import permit for each individual exporter they intend dealing with.14 ! The proposed importer is fully aware of and follows the required European Union customs documentation. the master certificate that was issued by the certifier to confirm the seller’s authenticity and capacity. formerly called transaction certificate. . and the importer into the European Union. This is issued by the certifying body and this is where the earlier inspection of production capacity comes in. as a consequence of instances of fraud. Therefore. Once cleared through European Union customs the organic product enjoys free movement to other member states. At the end of a year it can then be seen whether the total exports for which control certificates were issued correspond with the production capacity stated in the master certificate. 14 The European Union does not recognize certifiers whose agronomic stipulations do not conform to EU specifications. not all national authorities accept such declarations. Without this documentation European Union customs will not clear a shipment as organic but only as conventional coffee. could be applied for at the importer’s risk and after the import had already taken place.e. the certifying body. aspiring exporters of organic coffee to the European Union should verify whether: ! The proposed certifying organization has an EN 45011/ISO 65 accreditation (which they should be able to submit on request) or is accepted on the basis of the escape clause as in the example above (but again. is certified and has an import permit. Producers of organic coffee should be aware that the reality of the trade in organic products is quite different from the normal trade in coffee: logistics require importers to trade mainly in full container loads (see chapter 5.74 Chapter 3: Niche markets. in other countries they are private organizations. organic products certified by X are accepted in Hamburg and therefore should also be accepted in other European Union member states. In practice. the use of sodium nitrate is permitted by some non-EU certifiers but is prohibited under EU stipulations. however. then the original European Union importer has to obtain a new inspection certificate from a competent European Union certifying organization. i. in practice.
the National Organic Standards (part of the National Organic Program. the reputation for better quality and flavour of organic fresh produce items has kindled a positive interest in organically grown coffee. mostly of good quality coffee. Official statistics on the amount of organic coffee imported are not readily available but trade estimates put the market share of organic coffee in 2002 at not more than 0. As with the trade in specialty coffee generally. Consumers and producers of organic products jointly sought to establish national standards to clear up confusion in the marketplace. Organizations that are fully NOP-compliant (certified) may label their products or ingredients as organic. OFPA itself was adopted in 1990 to establish national standards for the production and handling of foods labelled as ‘organic’. although some specialize in organics entirely. thereby avoiding the label confusion that exists in Europe. or the role that coffee cultivation can play in sustaining the environment there. without necessarily offering the cup quality that this suggests.ioia.usda. Despite coffee’s undoubted popularity there is relatively little consumer awareness of conditions in coffee producing countries.5% or 35. The North American market for organic coffee is served mainly by importers who handle conventional products as well.6 million bags in 1995 to 6. Against this stands a certain disappointment in that in Japan the cup quality of organic coffee generally does not live up to the expectations created by the high asking prices. national certification requirements did not exist and therefore there were no guarantees that ‘organic’ meant the same thing from state to state. Nevertheless. A list of accredited certifying agents can be found on the USDA (NOP) website www. To illustrate. Japan Coffee consumption has been growing strongly in Japan. As a result of NOP there will therefore be a single national label in the United States to designate organic products. these labelling issues will surely have to be resolved eventually.net – Independent Organic Inspectors Association.000 bags. to Starbucks Gold Coast Blend at 863 yen per 200 g. the sustainability aspect of the organics label has not yet affected consumers in quite the same way as it has in some other consuming countries. for example. and may use the ‘USDA Organic Seal’ on organic products in the United States. in early 2002 average quality coffee retailed in Japanese supermarkets at 400 yen per 200 g compared. Part of the pricing problem is related to the limited turnover and high overheads of the cooperatives and other bodies that market most of the organic coffee in Japan. Although private and state agencies certified organic practices. Industry sources suggest that current prices inhibit growth and put a realistic premium expectation at the FOB level at around 15–20 cts/lb over average quality conventional coffee. it is often difficult to convince an importer to take a container load of an unknown coffee and the introduction of new coffees can therefore be a lengthy and tedious process. and to protect the trade against mislabelling or fraud. Efforts to come up with a single European label have not been successful yet – the increasing trade within the European Union in roasted coffee therefore forces roasters to display several labels on their retail packets. For most organic coffees the retail price stood at over 900 yen per 200 g. irrespective of whether they are produced domestically or are imported. Most certifying bodies have their own quality labels and as a result many different labels exist in the European Union for the designation of organic products.Chapter 3: Niche markets. an arrangement that does not provide the clarity one would expect. . thus limiting growth still further.ams.gov/nop and on www. In addition to the effects of high prices. from 5. or even locally from certifier to certifier. As food scares increase general awareness of health issues and thereby the profile of the organics trade as well.7 million bags in 2001. environment and social aspects 75 Label confusion. NOP) became effective on 21 October 2002. United States As required by the Organic Foods Production Act (OFPA).
which is extremely expensive. Otherwise each individual member must be inspected every year. suppliers of organic coffee and tea may display the JAS mark. Only JAS-accredited certifying bodies may issue organic certification for coffee to be imported into Japan. a total that therefore exceeds estimated current consumption. including sanctions. To assist in this regard the organic sector has developed an internal control system (ICS) that provides a practical and cost-effective inspection option. Generally. JAS operates under the auspices of the Ministry of Agriculture. if a grower group has more than 30 members then it qualifies for an ICS. Because many of them do not use. Table 17 is therefore simply a projection of the levels consumption could be expected to reach in the near term. . Although an ICS can be quite burdensome.000 bags. especially for larger groups with a geographically far-flung membership.000 tons or 800. Organic coffee and small producers Numerous grower organizations and smallholders are aware of the market for organic coffee.76 Chapter 3: Niche markets. Forestry and Fisheries and regulates the production and labelling of organic food items produced in Japan. giving Japan also a single organic label for the entire Japanese market. or use a minimum of agro-chemicals. It is expected that once an accreditation protocol is concluded between the governments of the United States and Japan. As well as the problem of possible oversupply. In addition. They have to assure themselves not only that their future output will be in accordance with the rules of organic production. World market for organic coffee Different trade sources have varying views on the growth prospects for organic coffee sales. ! Personnel. JAS nevertheless also covers organic coffee (and tea) under ‘organic agricultural products’. environment and social aspects The Japan Agricultural Standard (JAS) for Organic Agricultural Products entered into force in April 2002. interested certifying bodies in producing countries may also apply for accreditation under JAS. ! Infrastructure. With a proper internal control system. it is a means to reduce the costs of inspection. but also that the proposed inspection system is in accordance with the regulations in the import markets that are to be targeted. Although coffee is not grown in Japan. See the box on page 80 for names and website addresses of some of the certifying bodies known to be active in coffee in Japan in 2002. Subject to meeting the JAS standard for their products. In 2001/02 trade sources estimated world production of organic coffee at some 48. it is unlikely that any substantial increase in supply can be readily absorbed. upon application all certifying bodies authorized under United States law will also be accredited by Japan. only a random sample of the total number of producers has to be inspected by an independent certifying organization. Major elements of an ICS include: ! Internal regulation. set by the Agriculture Ministry. potential producers should also carefully consider the costs of certification. conversion seems a logical option especially when coffee prices are low. As long as the major coffee roasters in Europe and the United States do not include organic coffee in their range of major brands (and by mid 2002 they did not yet).
5 1. Most competent authorities require a sample of 10% of producers to be inspected annually. (Note that some roasters submit random coffee samples for chemical analysis to verify the accuracy of the inspection and certification process.000 9.9 1. ! Monitoring of product flow.000 15.) .Chapter 3: Niche markets. ! A 100% internal farm control at least once a year.3 2. especially for grower organizations with large memberships and where access to the actual growing areas may be difficult.000 7.000 18. but some officials consider this number much too small to offer the required consumer guarantees and want significant larger samples.000 110.000 22.000 Market share organic coffee (%) 1.000 48. environment and social aspects 77 Table 17 Estimated consumption of organic coffee in 2002/03 in major consumer countries Country Bags 200. Others consider 10% far too high.9 0. By mid 2002 the issue had not been resolved.1 1.0 0.0 2.000 49.8 1.000 33.9 0.000 27. but most competent authorities require proof that the external certification has been based on a sample of at least 10%.9 0.2 – United States Canada Japan Germany France Italy United Kingdom Denmark Spain Switzerland Austria Netherlands Sweden Finland Belgium/Luxembourg Norway Other Europe* Unspecified Brazil Total Source: Various trade estimates.000 23.1 0.000 22.000 7. * Including Eastern Europe.8 0.000 700.0 0.8 0. ! Training and information. The magnitude of the random sample to be taken by the external inspection body under an ICS system is a major item of debate within the European Union.000 20.000 33.7 2.000 12.000 15.2 0.4 – 0.000 30.
Ecuador. but production might also fall. However. not only does the producer have to bear the inspection and certification costs. India. Another option for international certifiers is to use a recognized local inspection body with which they have a cooperation agreement (e.e. local certificates are not necessarily or easily recognized by importing countries. Papua New Guinea. Also to be taken into account are increased production costs and sometimes a fall in the yield per hectare. Kenya. Guatemala. Colombia. inspection. environment and social aspects In September 2002 there were producers of certified organic coffee in the following countries: Bolivia. if the average annual inspection and certification cost for example comes to US$ 5. Ethiopia.78 Chapter 3: Niche markets. It depends on the time needed for preparation. As a rule of thumb however. and the fees the certification organization charges. East Timor. A further cost and a real problem for the producer is the conversion period from conventional to full organic production: during this time the coffee cannot be sold as organic and so does not realize any premium. Malawi. reporting and certification. This compares with consumers generally accepting to pay retail prices of around 20% more for organic coffee than they do for conventional coffee. El Salvador. Peru. Uganda and United Republic of Tanzania. As a norm. so their validity has to be carefully checked. Indonesia. although it should be noted that some grower organizations pay more than this. at least for a couple of years. Meanwhile. Honduras. travel. Some sources suggest yields may fall by some 20%. the potential producer premium (FOB) for the organic version of a particular coffee compared to the equivalent non-organic quality could in 2002 be put at 10%–15%. A number of international certifiers have branch offices in producing countries and locally employed staff carry out inspections at lower expense than external personnel could. Some exceptional coffees realize higher premiums but . Brazil. Cuba. Some charge a fee per hectare. Nevertheless. coffee growers in a number of countries can have access to funds to finance the costs of certification. Note that in order to overcome the start-up problems during the conversion period. others a percentage of the export value. These costs are extremely difficult to assess because they depend entirely on the nature and intensity of the conventional cultivation practices before the conversion to organic agriculture.g. Local certifiers (i.000 or more then there is little financial point in converting to certified organic if the annual exportable production amounts to only two or three containers. Mexico. Certification costs and viability Production and export It is impossible to give a precise indication of the cost of certification. Inspection costs tend to be higher in the initial phase as the certifiers need time to get to know the producer and to register his fields and facilities. those established in the same producing country or region) are usually but not always cheaper than the international agencies. IMO (Switzerland/Germany) and KRAV (Sweden) cooperate with CERTIMEX in Mexico). Fee structures vary considerably and it is therefore advisable to review in detail which inspection and certification organization offers the best service at the lowest price. Dominican Republic. Premiums for organic coffee are difficult to indicate because they depend on the quality of the coffee and on the market situation at a given moment. Not only the agricultural production of the coffee but also the wet and dry processing as well as the storage and export process have to be inspected and certified. Madagascar. Costa Rica. the cost of inspection and certification should not exceed 3%–4% of the sales value of the green coffee.
makes it clear that to produce good quality coffee of any kind takes much work and strict management. Remember certifiers are offering a service. Coffee quality. Actual producer premiums fluctuate alongside coffee prices as a whole: high coffee prices probably reducing the premium percentage and.7% of the sales value or US$ 0. The high of 15% is an indication only. Where it is not. just as is the case for some well known conventional specialty or gourmet coffees. honest hard work and integrity. Conditions are usually negotiable. but only trades it) pays a licence fee of 0. Roasters pay a licence fee of 0. every European Union importer of organic coffee must apply for an individual import permit for each of their suppliers and for each consignment. depending on turnover.50 per kilogram.20–0. See the box overleaf for a listing of some major certifiers relevant for the coffee sector. will sell at much lower premiums over their conventional equivalent. or that are available in large quantities. not favours. i. Organic certification will always complement such efforts but cannot replace good. depending on turnover. and such organic brands indeed achieve premiums of 25% or even higher over conventional coffee. Organic coffees that do not offer quality as such.e. the premium over conventional coffee has to be justified purely by the organic aspect and is therefore strictly limited by supply and demand unless and until the quality is such that the organic coffee in question can achieve a true stand-alone position in the market – its own niche. and should serve their clients. this is the maximum that should be expected. . But as the supply of organic coffee grows. Importing. not the other way around. Make sure the preferred certifier is accredited and approved in the target market. Just as producers of conventional specialty coffee have experienced. Remember: ! Check which certifier is the most acceptable and the most appropriate for the target export market. as already mentioned. In addition. roasting and retailing The green coffee importer and the coffee roaster also have to be inspected and certified. it is equally difficult to launch new stand-alone brands of organic coffee. Information on costs and current sales prices for comparable coffees is available on many websites and can relatively easily be compared. just like any other standard type coffee. conversely. ! Ensure your potential export production warrants the conversion cost. ! Obtain quotations from various certifiers and ask for clear conditions (especially how many days will be charged) and timelines. Fairtrade offers a fixed US$ 15 cts/lb premium for organic coffee over its minimum guaranteed price for conventional coffee that meets Fairtrade criteria. calculate the opportunity cost of converting to organic production. the importer (who does not process the coffee. low coffee prices probably encouraging somewhat higher premium percentages.Chapter 3: Niche markets. environment and social aspects 79 there is a strong feeling in trade circles that.1%–1. And. realistically. Then the premium potential becomes entirely demand driven. perhaps as low as 5% because. Contrary to popular belief the liquor of organic coffee is not necessarily better than that of its conventional equivalent.5% of the sales value of the roasted coffee. determine which certifier the prospective buyer(s) may prefer. Inspection costs in the European Union vary from US$ 500 to US$ 750 per year per import/production location.1%–0. Chapter 11. they end up as bulk blenders. Consumer interest tails off rapidly if premiums go beyond this unless the coffee’s quality is absolutely outstanding. If possible. so growers should be more cautious when venturing into this field.
com www.80 Chapter 3: Niche markets.ch/imo/imo-frame.ar www.soilassociation.biolatina.ibd.com. IMC Instituto Mediterraneo di Certificazione IMO Institut für Marktökologie IMO Institut für Marktökologie GmbH INAC GmbH JONA Japan Organic & Natural Foods Association KRAV Ekonomisk Förening Lacon GmbH NASAA Naturland e.ar www.com www.com www.ccof.nasaa. environment and social aspects Some major certifiers relevant for the coffee sector Company ACT Organic Agriculture Certification Thailand AIAB Associazione Italiana per l’Agricoltura Biologica AIMCOPOP Argencert BCS Öko-Garantie GmbH Bio.com.ecocert.biogro.inac-certification.com www.org www. Inc.bioagricert.qualite-france.imo.sgs.tilth.com www.co.qci.bio-inspecta. Inc.krav.com www.com www.au www.V.it www.fr www.nz www.ocpro-certcanada.de www.it www.skalint.ch www.pure-foods.de www.ocia.ics-intl.oia.org www.bcs-oeko.omicnet.imo.com www.uk.com www.naturland.nl www.org www.de www.ocia.jona.com www.htm www.com.argencert.html www.org www.jp www.imcdotcom. OCIA Organic Crop Improvement Association OCIA Japan OCPRO OIA Organización Internacional Agropecuaria OFG Organic Farmers & Growers OMIC Overseas Merchandise Inspection Co.com www. also seen as Farm Verified Organic (FVO) ICS Japan.organicfarmers.org .jp/index2.lacon-institut.br www.qai-inc.inspecta Biolatina BioAgriCert Bio-Gro New Zealand Bolicert CCOF California Certified Organic Farmers CCPB Consorzio per il Controllo dei Prodotti Biologici CERTIMEX ECOCERT Ecológica IBD Instituto Biodinâmico ICS International Certification Services.org www.org www. Ltd OTCO Oregon Tilth Certified Organic Qualité-France QAI Quality Assurance International QAI Japan QC&I GmbH SGS Nederland Skal International Soil Association Country Thailand Italy Costa Rica Argentina Germany Switzerland Peru Italy New Zealand Bolivia United States Italy Mexico France Costa Rica Brazil United States Japan Italy Switzerland Germany Germany Japan Sweden Germany Australia Germany United States Japan Canada Argentina United Kingdom Japan United States France United States Japan Germany Netherlands Netherlands United Kingdom Website www.organic.co.ccpb.co.ch www.com.qai-inc.aiab.se www.
000 coffee producers in Peru that is using the following approach to address these issues.Chapter 3: Niche markets. or at least different from the majority of other coffees in their country or region. ‘show me all farms in this zone growing arabica at an altitude over 1. By demonstrating this information in maps or graphics producers can show why their coffee is unique. or ‘appellation zone’ levels. it can be useful for estates using specific estate logos or appellations. and other details that may be important for marketing or certifying. Could use regular database or even paper files to store data. or large estate producer. but it can also help prevent misrepresentation. but includes location information for each record. B More rigorous training required. If in addition a producer seeks an authorized. zoom in and out to see details.g. B Inexpensive handhelds.000 m’). group of cooperatives. ! The system is available on the Internet (www. This works like a more traditional database. ! This information (production and location) is entered into a spatial database known as a geographic information system (GIS). Mapping software is optional. Any user can look at the maps. ! Maps are created showing not only where the farms are located. enforceable ‘appellation’ for their coffee then they also need the spatial information necessary to legally or formally define the extent of the appellation zone and thus lead to the authentication of the appellation and the coffee in question. rainfall and special environmental attributes. typically half a day for an extension agent.g. The system leads to better overall production management. More likely used by cooperative. Some tools The following list is not exhaustive. e.perucoffee.000 for the software. ArcView by ESRI. B US$ 600–1. B US$ 300 with antenna. application of pesticides. Modern technology enables one to show on a map where a coffee is grown and the special characteristics of that area such as altitude. Technologies are now available and being applied in the field to help producers’ and farmers’ organizations address these issues and many more. ! GIS – for creating a spatial database and mapping. At the same time. environment and social aspects 81 Mapping technology in coffee marketing: GPS and GIS Not only can authoritative information about where or how a coffee is grown contribute to making it a successful specialty or organic coffee. Example.com). thereby assisting the marketing effort. vegetation type. ! Data are being collected on how producers grow their coffee including varieties. but also whatever characteristics are of interest about each farm and the coffee produced on that farm. farmers group.g. or even ask to see all of the farms meeting some criteria (e. it provides information about the coffee to potential buyers. The United States Agency for International Development (USAID) has funded a project with over 6. soils. e. . Magellan. altitude. B Easily learned. Extension agents collect data on practices and quality and whatever else defines the ‘uniqueness’ of the coffee at the farm. Garmin. Although individual farmers’ need for such systems is limited. ! The physical location of each farm is recorded by project extension agents using a global positioning system (GPS) unit. slope. ! GPS – to get locations.
For more information on trademarking go to: ! European Union: www. more likely used by cooperatives. Outlook New technologies are being developed to aid in data collection.jp Environment. B Static maps easily put into website. query based on particular characteristics of interest. where a producer goes to the trouble and cost to create an appellation for their coffee and backs it up with registration in a GIS database. In the area of authentication – proving that a coffee actually comes from a specific area or source – technologies such as smart tags are also being developed. Some consumer activists wanted to change the system from within and started constructing alternatives to the dominant free market coffee economy. attached to each bag. One regular topic.int ! United States: www. tea and other commodities from small producer organizations which they sold through so-called Third World shops. groups of cooperatives or large estates.oami. zoom in and out. Note also that the degree of protection offered by trademark legislation varies from country to country. These data are entered into the device and downloaded into the database at the end of each day or week. is the working and living conditions of coffee farmers and workers on coffee plantations. These tiny computerized tags. and where the degree of protection is such as to make the effort and cost worthwhile. The Colombian Juan Valdez trademark needs no explanation or description: it is virtually known worldwide and is protected against fraudulent use because it is registered in all the main import markets.jpo. Trade marking A registered trademark or logo can help protect a successful product from being fraudulently duplicated. especially in times when coffee prices are low or when there is political turmoil in coffee producing areas. and could even be tracked by satellite if such control was necessary. codes of conduct and social issues Coffee has always been connected with emotions and opinions.eu. environment and social aspects ! Internet – for staging maps on the Internet. Taken together these considerations suggest that trademarking should be considered only where the product warrants it. But the cost of developing and registering a trademark can be high and prospective applicants may even find that their favourite choice is already in use. .gov ! Japan: www. B Interactive maps (move around. can contain any set of information required to meet the authentification requirements. The first step in the process is therefore to pay a firm of attorneys to conduct a search of existing registrations. etc. then trademarking of the name will complete the safeguarding process. Handheld devices already exist that combine spatial data (GPS locations) and traditional data collection (specific non-spatial information). sustainability.82 Chapter 3: Niche markets. But certainly. Advocacy groups and NGOs lobby for improved livelihoods and fair treatment of coffee growers and plantation workers.go. Again. They began to import coffee.) require special software and training. therefore the debate about socio-economic aspects of coffee production is decades old already. or is too close to an existing registration to be accepted.uspto.
A more general development is that the mainstream coffee industry is increasingly accepting responsibility for the conditions under which the coffee is produced. protection of biodiversity. access to proper housing and sanitation. The certification effort of the Sustainable Agriculture Network in Central and South America. For more see www. is based on the forestry certification model. which for mainstream producers would be very difficult if not entirely impossible to do. Rainforest Alliance Certification.edu) and other institutions and NGOs in Canada. who then rely on the market to pay a premium. A well-known example is coffee from the Finca Irlanda (Chiapas. The Sustainable Agriculture Network’s programme also emphasizes decent working conditions. This concept appeals to coffee growers and consumers who are not necessarily interested in. leading to an operation that is sustainably managed. the United States and Mexico.) Sustainability Sustainability has been defined by some as ‘meeting the needs of the present generation without compromising the ability of future generations to meet their needs’. and respect and fair treatment for workers.Chapter 3: Niche markets.rainforest-alliance. Coupled with growing interest in and support for environmental causes in importing countries generally this has led to the introduction of terms such as environment-friendly or environmentally sustainable coffee. but they meet even higher production standards and represent a true niche market.org. environment and social aspects 83 Another step was the initiative in the Netherlands to develop a certification system and a label for coffee of such producers in order to create sales potential for these products in supermarket chains under the Fairtrade label (see later in this chapter).nationalzoo. respect for workers’ rights and the commercial success of the farms are central themes. Others do not see the market potential as sufficiently large. coordinated by the Rainforest Alliance. So far the market for such coffees is small and limited to North America.consumerscouncil. preservation of watersheds.si. Shade grown coffee. formerly known as ECO-OK. Details at www. soil conservation. is another example. there is a market for so-called bird-friendly or shade grown coffee. and still others simply believe that it is possible to achieve more or less the same objectives without going the organic way. promotion of biological controls. (For a good introduction to the subject go to www. Shade grown coffee is not the same as organic coffee but there are specific standards and a certification system has been developed by the Smithsonian Migratory Bird Center (see www. adequate pay.demeter-usa.org. and look for the Conservation Principles for Coffee Production. This is usually high quality arabica at high premiums with a low market share. Mexico) where organic cultivation began in the 1960s. These systems engage the producers. and protection of wildlife and natural resources. perhaps because they believe that low yields coupled with increasing availability of organic coffee will always prevent small growers from generating the high incomes that some proponents of organic coffee production believe can be achieved. Biodynamic products are organic and can be marketed as such. But as a percentage of the total world trade in coffee these various initiatives still represent less than 1%. Especially in the United States and Canada. Under this system a rigorous set of mutually agreed international standards are used to verify best management practices. The standards for sustainable coffee farms include: a minimum number of native forest trees per hectare. no replacement of virgin forest with coffee plantings. Biodynamic coffee. ethical and environmental dimensions with biodiversity perhaps as the key measure of environmental sustainability in the natural world. Shade grown represents a step along the way towards environmentally sustainable coffee. . Limited use of agro-chemicals is permitted and the emphasis is put on the conservation of shade trees on plantations in order to preserve bird life and biodiversity. minimal use of agro-chemicals. It can then be further defined in social.org. or who see no rationale to the production of organic coffee as such. The conservation of natural resources.
one may consider that it sustains rather than harms the environment. If so. Pressure through lobbying and campaigns may have contributed to this attitude change.000 tons for the first time in 1995. now US-LEAP) led the United States-based Starbucks coffee company to create a company code of conduct in 1995. under which it launched different programmes aimed at community building and improving conditions in coffee . Integrated farming systems Integrated farming systems are one such approach and might in the end be the most promising: minimize the use and negative effects of agro-chemicals. and that will encompass the more complete global coffee industry at large: growers.org) was originally introduced by European retail chains for sourcing their fresh produce purchases. This approach does not exclude the use of agro-chemicals. The European Retail Protocol for Good Agricultural Practice The European Retail Protocol for Good Agricultural Practice (Eurepgap: see www. more appropriately called a code of conduct or a code of practice. Basically this means that in all phases of production and processing one tries to minimize the impact on the environment. It is consumer-driven and provides an assurance of basic good agricultural practices and social conditions. and this is expected to happen in 2003. As an example. Work is underway to bring their coffee supply under the same scheme. An increasing number of individual companies and associations such as the Specialty Coffee Associations of America and of Europe are engaged in a variety of activities related to what may broadly be called codes of conduct. and so on. Eurepgap forms the basis of this code. more attention is given to the reduction of energy consumption. traditionally not available for mainstream coffees. Some of these are listed here by way of example. since Starbucks introduced Transfair coffee to the United States market in 1999. this concept presents a broad alternative for the more directly focused objectives of individual labels that may appeal to pure niche markets. the market share for roasted coffee under the Transfair and Fairtrade seals reached 10. But even so. Moreover. Documentation and certification can be achieved within the framework of the ISO 14001 system. but rather attempts to reduce their use to a minimum. and when linked with consideration for social and ethical issues. 1. The protocol is now an established part of their sourcing strategy and enjoys wide acceptance. if a production process maintains biodiversity then. The protocol was established by over 30 leading European retailers working together in the European Retailers Produce Working Group (EUREP) to harmonize their agricultural standards for fruits and vegetables. Codes of conduct Codes of conduct or codes of practice such as Eurepgap are a good example of how purchasing power translates into change at the producing end. environment and social aspects This is not the place to pronounce for or against any of these arguments but. this listing is by no means exhaustive. with the producer or processor documenting where and how in each step of the production and processing system they are reducing the environmental impact (see www. In 1998 Starbucks began its ‘98-99 Framework for Action’. At the same time. as in some other industries.org). A campaign by the Guatemala Labour Education Project (US-GLEP. presumably. packaging materials.iso. roasters and consumers alike. about another 70 coffee retailers in the United States have become licensed to sell Fairtrade (as at early 2002). one can probably mark the 1990s as a turning point for the policies of the larger roasters with respect to social responsibility. The retailer demands certain assurances of the roaster who in turn requires their suppliers to conform. This is not to say that all this has come about entirely spontaneously: the 1990s saw a number of food scares that have undoubtedly focused consumer attention on the how and what of the food and drink they consume.eurep.84 Chapter 3: Niche markets.
and precludes no one from participating. linked to an independent certification capability. for example Carrefour of France. The subject was also introduced in the ICO’s Private Sector Consultative Board. Mozambique. There are also other. which provides financial incentives for producers of high quality coffee that meet important social. Colombia. processing and marketing assistance for a number of years. Interested growers (individuals or groups) receive technical assistance to help them implement the changes necessary to achieve accreditation. Go to www. Producers meeting all criteria are awarded Preferred Supplier status. for example. The European Coffee Federation is now producing guidelines. the Fairtrade movement and other groups.asp. their workers and their families. This was done by adapting the Eurepgap fresh produce protocol to coffee production. South Africa. What appears to distinguish this still relatively under-publicized initiative from all others is that it offers a way forward towards some form of market-driven recognition that is open to all who can qualify. is available to both mainstream and specialty coffee. This eventually resulted in the formation of an informal working group on ethical sourcing within the European Coffee Federation (ECF).5 million alliance with the international non-profit organization TechnoServe to boost the competitiveness of small-scale producers in selected Latin American coffee producing countries and. are taking in the organic standards of IFOAM and the social criteria of the Fairtrade movement. will ensure a level playing field while avoiding label and perception confusion among consumers. Honduras. Peru and Viet Nam. 5. to be adopted by its members and to be endorsed by relevant NGOs. Costa Rica. Since then Starbucks has also introduced its Preferred Supplier pilot programme (late 2001). smaller but more directly focused programmes. For more information go to www. Ghana. Kenya. 3. The significant change here is that whereas previously such initiatives originated from producing countries (with NGO support). through widespread publicity.com/aboutus/sourcingcoffee. Brazil. This was followed by the establishment in Latin America and the Netherlands of the Utz Kapeh Foundation. 4. Other retail chains. Peru. Utz Kapeh certification is now available to any interested parties. In early 2002 the United States firm of Procter & Gamble. space does not permit more such individual initiatives to be reviewed here. TechnoServe itself. By mid 2002 certified coffee was available from Bolivia. where appropriate.utzkapeh.org. environmental and food safety issues’. owner of the Folgers and Millstone coffee companies. such as the well-known Coffee Kids initiative in the United States (www. Unfortunately.org. Uganda and the United Republic of Tanzania. urged action to improve the social conditions of workers on coffee plantations. The Ahold company relinquished ownership of the project to the foundation and informed all its coffee suppliers that it was moving towards purchasing only Utz Kapeh certified coffee. It is active in El Salvador. one of the largest retail chains in the world and headquartered in the Netherlands. In late 1998. The coffee division of Ahold.coffeekids. Honduras. they are now increasingly being generated by the mainstream industry in consuming countries where food retail chains demand more and . 2.Chapter 3: Niche markets. environmental and economic criteria. to explore alternatives to coffee production. For details of these sourcing guidelines in English and Spanish go to www. Indonesia. announced a long-term US$ 1.starbucks. that also work successfully to improve the lives of coffee growers. The foundation authorizes third party certifiers who in turn must have Eurepgap accreditation.technoserve. Nicaragua. founded in 1968. initiated work on a system of independent supplier certification as early as 1997 through a pilot project that aimed to develop a ‘guarantee that coffee was produced responsibly in terms of social.org). roasters and growers alike. The mainstream industry welcomes this initiative since internationally recognized standards that take on board ILO principles. has been involved with providing small-scale growers with coffee production. Guatemala. environment and social aspects 85 producing regions.
health care and education. Simply put. took the initiative to start the Max Havelaar certification system for Fairtrade coffee (and subsequently also for other products) with the goal of bringing these coffees into conventional supermarket channels. honey.org. Fairtrade As a consequence of growing awareness of differences in development between North and South. Fairtrade efforts in coffee and cocoa are concentrated on smallholder producers only. small groups of consumers organized so-called Third World shops. Objectives The Fairtrade initiative aims to enable smallholder producers of coffee (and cocoa. the higher prices consumers pay for Fairtrade products reach the grower through a combination of guaranteed minimum prices and premiums. and since then another 16 countries have followed suit (see table 18 below). The Max Havelaar Foundation was established in the Netherlands in 1988. This suggests that. especially since the disappearance of the old ICO price support agreements. such shops were simply a table in the church after Sunday service but gradually they have evolved and. proof of compliance with a generally accepted code of conduct is likely to become a pre-condition for unrestricted market access. Many growers could not even recoup their production costs. In 1997 the different national institutions established an umbrella organization known as FLO (Fairtrade Labelling Organizations International) with offices in Bonn. Germany. For further information on social accountability issues (SA8000 framework) see www. and during the closing decades of the twentieth century extremely low. The objective is to assist without patronizing anyone by providing the instruments necessary to enable small growers to take their development into their own hands. Usually they reached only the people who were prepared to make a detour to buy their coffee in a Third World shop instead of in their normal supermarket. Initially. which sold products from developing countries that were purchased under just conditions from small producers.15 Coffee prices are by nature unstable. Therefore. orange juice and sugar) to improve their conditions of trade. in 1988 a Netherlands NGO.cepaa. at the request of small growers in Mexico (UCIRI). . eventually. environment and social aspects more guarantees from their suppliers that the goods they provide are responsibly produced. Originally consumer coffees from such alternative trade organizations were sold only through their own outlets or by mail order operated by volunteers. together with its member organizations. as independent producers and not as recipients of occasional gestures of largesse. Conversely. Solidaridad. sub-economical coffee and cocoa prices caused serious economic and social problems. in tea. have become professional franchise organizations with turnovers of several million United States dollars. as in the case of the Fairtrade movement. bananas and sugar the emphasis is mainly on estates (improving conditions for the labour force). and the cost of environmentally friendly farming systems. resulting in more equitable and more stable prices. tea. Coffee typically constitutes up to 50% of their sales as they usually supply a lot of coffee to institutional markets and caterers. FLO. works towards improvement in the unequal distribution of wealth between North and South.86 Chapter 3: Niche markets. 15 Currently. bananas. the website of the Council on Economic Priorities Accreditation Agency. This is achieved by incorporating in the producer price not only the cost of production but also the cost of providing basic necessities such as running water. Consumer support for more equitable North–South trading conditions is then linked to participating growers through the by now well-known Fairtrade labels on retail packaging in consuming countries. let alone make a decent living.
415 1.860 1.513 54.098.347 6. Fairtrade does not aim to replace anyone in the traditional marketing cycle and works on the basis that there is a place for each provided all accept the Fairtrade goal of selling the largest possible volume of smallholder coffee at a fair price: fair for growers and consumers alike.600 695.e.237 40.511 6.237.224 742.306.490 353. Fairtrade is a certification programme that all smallholders and roasters who satisfy the criteria can join.332.101. thus guaranteeing the label’s integrity. Note: In addition there may be sales (of green coffee) not necessarily reflected in the above. The FLO role in this is to: ! Promote Fairtrade coffee in consumer markets.437 90.005 1. As yet much of this production cannot be absorbed by the Fairtrade labels.851 253.129 3. to obtain FLO certification.971 2000 12.484 547.381.640 1. By end 2001 some 200 groups were inscribed. purchasing.000 457.569 77.240 707.923 125.569 1.185.000 Market TOTAL Austria Belgium Canada Denmark Finland France Germany Ireland Italy Japan Luxembourg Netherlands Norway Sweden Switzerland United Kingdom United States Source: Max Havelaar.600 270. 1999–2001 (in kilograms) 1999 11.600 64.648 495.650 62. processing.000 398.000 945. reliability and respect for socio-economic and environmental concerns that consumers recognize and appreciate.424.425 3.361 35.Chapter 3: Niche markets.200 69.203 258.363 283.973 299. representing approximately 500.000 2001 14. The labels guarantee for the consumer adherence to this principle while leaving production.236 77. in the coffee industry.853 154.127.263.320 3.353 332. The Fairtrade labels aim to make the initiative and the growers behind it visible and therefore marketable on a sustained basis.060 54.332. ! Identify and assist eligible groups of small growers to become inscribed in the FLO coffee producers’ register.261 582.700 218. environment and social aspects 87 Table 18 Sales of Fairtrade roasted coffee.300 3. .396.104.313 216.316 3. i.000 6.000 smallholders.000 3.584 1. marketing and distribution where it belongs.440 55.681 178.817.886 1.816.843 477.647. But in the end success in the retail market depends on consumer support. ! Verify adherence by all concerned to the Fairtrade principles.070 97. The labels enable FLO and others to provide sustained publicity and support where it counts most – in the consuming countries – for example by building a public image of quality.124 697.
88 Chapter 3: Niche markets. a further premium of 15 cts/lb per pound green coffee will be due. The credit will be reimbursed through shipment of the coffee. Mexico). The price shall be established in United States dollars per pound. Africa. Caribbean area 139 135 125 121 Type of coffee Central America. Mexico. The price shall be established in United States dollars per metric ton. at regular international interest rates. roasters and buyers have to accept and facilitate external control on their compliance with FLO conditions. Africa. Given the need on all sides for continuity and reliability roasters and buyers will as much as possible encourage long-term relationships. In addition. not only in consuming countries but also in producing countries with a substantial home market (for example. ! For certified organic coffee with officially recognized certification. if the producer so requests. that will be sold as such. The purchase price must be set in accordance with Fairtrade conditions of which the following are the most significant: ! Arabicas: the New York ‘C’ market (NYKC) shall be the basis plus or minus the prevailing differential for the relevant quality. differentiated according to the type and origin of the coffee. net shipped weight. net shipped weight. in cents per pound Regular Certified organic Central America. Despite these limitations the label is well established in a number of markets and additional growth can be expected. environment and social aspects some groups manage to sell perhaps 50% of their output but others only about 10% so the supply potential exceeds the demand. ! Robustas: the London Terminal market (LIFFE) shall be the basis plus or minus the prevailing differential for the relevant quality. ! Guaranteed minimum prices have been set as per table 19. . Asia 141 135 125 121 South America. Caribbean area 124 120 110 106 Washed arabica Unwashed arabica Washed robusta Unwashed robusta Note: Prices are FOB port of origin. the roaster or buyer undertakes to facilitate the coffee producer’s access to credit facilities at the beginning of the harvest season. Finally. FOB origin. Mexico. Table 19 Guaranteed minimum Fairtrade coffee prices. Asia 126 120 110 106 South America. Using Fairtrade labels Coffee to be sold under a Fairtrade label must be purchased directly from groups inscribed in the FLO Coffee Producers’ Register. ! These prices shall then be increased by a fixed premium of 5 cts/lb. net shipped weight. basis FOB origin. for up to 60% of the value of the contracted coffee at Fairtrade conditions. Accelerating sales growth is expected especially in the United States market but for aspiring grower organizations to share in Fairtrade growth in any import market they will first have to achieve FLO certification – see details on page 89.
for example by establishing an umbrella organization to coordinate this and other activities to achieve the necessary economies of scale. i.4 kg roasted coffee. Parchment to green bean: multiply the net weight of the parchment by 0. To convert different types of coffee to GBE: Dried cherry to green bean: multiply the net weight of the cherry by 0. producer groups should at least have the potential to reach a volume of business that will achieve sustainable development impact. containing general information on FLO and the Fairtrade market.5.) Criteria include: ! Minimum entry requirements which all must meet when joining Fairtrade. FLO itself does not impose minimum volumes on grower organizations but for practical reasons shipments must be in container size lots. Application procedure. small producer groups in some countries do manage to combine shipments so as to fill a container. Soluble coffee to green bean*: multiply the net weight of soluble coffee by 2. FLO’s start-up requirement also serves a developmental objective: taking into account membership and other characteristics.net) to all FLO member organizations. GBE: green bean equivalent. Liquid coffee to green bean: multiply the net weight of the dried coffee solids contained in the liquid coffee by 2. for statistical purposes. Conversions into green bean equivalent (GBE) All quantity data in Coffee: An exporter’s guide represent bags of 60 kg net (132. detailed information on the initial certification process and the application form. i.Chapter 3: Niche markets. FLO standards. Once approved the certification will be formalized by means of a signed producer agreement with FLO and a certificate indicating the duration of validity of the certification (to be renewed every two years). Applying for FLO certification FLO certification provides access (www.6. Roasted coffee to green bean*: multiply the net weight of the roasted coffee by 1.276 lb) green coffee or the equivalent thereof. * Applies equally to decaffeinated coffee.e. All relevant information is then presented to the FLO Certification Committee charged with the certification of new producer groups. is positive. . (Look for Generic Fairtrade Standards for Small Farmers’ Organizations on the same website.8. based on the application form. environment and social aspects 89 Minimum tonnage Mention has already been made of the difficulty of shipping small lots that do not fill an entire container. 75 kg parchment. 60 kg green coffee represents: 120 kg dried cherry. Green coffee means all coffee in the naked bean form before roasting.e. 50. The certification unit of FLO sends an application pack to the applicant. Participating organizations of small coffee growers must meet criteria consisting of requirements against which the producers will actually be monitored. Alternatively. The applying organization directs its request to FLO International.fairtrade. ! Progress requirements. or within a specified period. show improvement over the longer term. the applying organization will be visited by an FLO inspector who will examine the organization on the basis of the minimum requirements of FLO. In practice. meaning a minimum exportable production of about 18 tons. If the first evaluation.19.6.
757 20.657 510 2.712 534 94 150 2.889 430 2.197 642 183 262 39.942 160 23.617 2.347 306 641 2.195 29 5.941 986 5.203 999 6.700 10.175 4.657 337 690 2.141 445 1.238 1.125 1.160 2.742 1.270 1997/98 103.643 68.408 64.538 363 88 133 3.207 17.084 218 232 39.236 264 1.408 23.193 181 28.074 11.466 13.129 7.088 597 31 2.564 46 5.241 4.208 12.974 150 24.431 717 7.641 170 199 38.991 73.505 2000/01 111.034 2.745 1999/00 114.461 151 20.211 444 34 1.617 23 5.759 10.160 2.454 318 49 99 3.627 70.324 991 5.773 19.236 6.472 1.717 4.728 567 272 271 2.707 2.521 424 2.004 54 5.141 178 18.688 416 2.876 1996/97 2000/01 106.073 192 163 44.667 39 5.859 463 43 56 2.535 161 151 40.261 64.478 19.416 456 894 2.045 1.224 1996/97 99.674 12.555 189 23.916 Coffee years 1998/99 103.056 4.350 283 449 2.017 36 4.865 1.152 18.205 450 2.182 73 1.835 5.241 1.455 1.768 .602 69.981 11.Annex III World production by coffee year.324 793 211 270 35.200 6.892 317 153 70 2.264 1.126 360 561 2.182 2.051 1.532 571 33 2.954 75.102 539 30 2.544 3.359 9.404 317 692 2.910 2.246 300 702 1. Rep.500 298 890 2.117 170 25.127 190 203 40.801 19.379 42 5.341 3.683 340 78 195 2.145 2.534 4.385 19.981 1991/92 1995/96 91.596 68.398 510 29 2.477 809 184 227 36. 1986/87–2000/01 (in thousands of bags) Average 1986/87 1990/91 TOTAL Arabica group North America Costa Rica Cuba Dominican Republic El Salvador Guatemala Haiti Honduras Jamaica Mexico Nicaragua Panama United States South America Bolivia Brazil Colombia Ecuador Paraguay Peru Venezuela Africa Burundi Cameroon Dem.985 39 6.174 379 104 41 3.075 5.876 572 38 1.197 402 2.653 433 2.442 1.623 179 27. of the Congo Ethiopia 95.
383 580 50 1.616 86 59 345 240 595 29 88 3.056 38 4 70 42.135 4.389 4.800 173 19 8 1.728 797 153 1.546 5.328 720 200 1.021 57 8 70 34.319 79 7 90 30.502 62 22 306 427 629 83 114 4.246 4.704 1.172 60 42 285 280 503 65 145 4.655 5 17 17 113 50 1.Chapter 1: World coffee trade – an overview 25 Average 1986/87 1990/91 Kenya Malawi Madagascar Rwanda Uganda United Rep.870 6.822 1.907 747 14 6 17 8.109 5.042 594 1 4 45 140 5 476 1999/00 1.563 272 21 3.528 695 2 2 32 148 5 626 1997/98 882 63 71 242 264 439 56 137 4.920 1.170 68 0 5 1.018 52 6 65 27. of the Congo Equatorial Guinea Gabon Ghana Guinea Liberia Madagascar 1.974 344 5 1 36 102 5 904 .855 790 145 1.870 5.607 5.298 761 173 1.759 96 56 635 166 692 17 216 2.114 1.383 208 10 4.682 605 2 3 28 172 5 862 Coffee years 1998/99 1. Rep.755 3.924 610 14 9 17 10.285 128 4 3.207 30 1 2 1.812 443 4 10 17 11.974 749 4 5 23 11. of Tanzania Zambia Zimbabwe Asia and Pacific India Indonesia Lao People’s Dem.206 57 9 75 34.443 759 14 10 20 9.071 214 3 2.068 1.801 866 100 1.246 58 33 230 408 544 40 159 3.266 241 3 5.215 4. Papua New Guinea Philippines Sri Lanka Yemen Robusta group America Brazil Ecuador Guatemala Guyana Trinidad and Tobago Africa Angola Benin Burundi Cameroon Central African Republic Congo Côte d’Ivoire Dem.451 2.329 499 0 983 39 8 62 27.864 666 2 3 39 139 5 644 1996/97 1.692 59 7 21 802 262 10 2.368 467 12 10 14 10.008 3 3 71 117 5 661 1996/97 2000/01 1.086 37 6 90 39.416 2.050 1991/92 1995/96 1.301 73 0 2 1.021 64 48 232 400 669 55 95 4.173 1.689 759 100 1. Rep.691 4.154 1.899 416 0 2 45 112 5 332 2000/01 1.574 4.124 5.193 71 0 1 811 115 3 3.344 59 0 2 1.464 641 3 10 17 8.871 6.297 64 44 261 340 525 52 147 4.450 739 3 5 18 12.174 191 5 3.642 58 0 0 1.936 1.606 5.286 4.138 54 7 79 35.
403 5.0 9.194 50 160 5 61 835 29 1.525 5.9 89.775 Table 1 World coffee exports.342 50 160 10 63 871 49 1.486 0 77 6 25 1.493 87 160 10 55 703 32 1.6 Million bags 70.596 6.756 6.288 228 19.889 192 17.685 2.780 7.691 14.266 25 115 6 38 862 46 1.618 3.170 2.792 2. 1995/96–2000/01 US$ billion 10.159 5.4 12.2 74.379 6.7 8.670 197 22.947 1999/00 57 76 263 2. .3 88.505 1996/97 2000/01 52 45 286 2.222 1.338 145 10.723 77 160 10 58 607 28 916 6.949 219 19.644 5.952 2.338 190 12.4 78. of Tanzania Asia and Pacific India Indonesia Lao People’s Dem.648 2000/01 45 35 334 2.6 5.9 Cts/lb (FOB)* 109 126 116 93 73 48 Coffee year 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 Source: ICO.705 1997/98 45 50 222 2. * Rounded to nearest cent. Rep.805 167 25.267 2.915 Coffee years 1998/99 46 24 321 3.932 7.023 66 810 942 1991/92 1995/96 56 47 210 2.286 73 160 9 59 746 35 1. 28 150 240 2.814 1.26 Chapter 1: World coffee trade – an overview Average 1986/87 1990/91 Nigeria Sierra Leone Togo Uganda United Rep.698 100 160 10 58 737 38 1.271 11.726 1.5 78. Malaysia New Caledonia Papua New Guinea Philippines Sri Lanka Thailand Viet Nam Sources: ICO and USDA.293 6.1 12. by value and volume.018 222 17.252 8.576 1996/97 46 41 290 3.
EP (European preparation) permits max. allows 23 defects). fine cup. El Salvador SHG EP max. allows max. e. screen 17. fine roast. The examples refer primarily to the trade in mainstream coffee and do not reflect the often more detailed descriptions used for niche markets. B and C. Type 5 refers to a grading scale based on screen.be is an example of a website which gives information on the export classification of coffees of most origins. Guatemala SHB EP Huehuetenango Strictly Hard Bean is from above 1. Other classifications apply to unwashed (naturals) and robusta. Grading and classification is usually based on some of the following criteria: ! ! ! ! ! ! ! Altitude and/or region Botanical variety Preparation (wet or dry process = washed or natural) Bean size (screen size).200 m on a scale which also includes High Grown from 900–1. 5% below. It should be noted that descriptions such as ‘European preparation’ differ from one country to another. Santos NY 3/4 Screen 14/16. 8 defects per 300 g (American preparation: above screen 14.g.400 m. Colombia Colombia Supremo screen 17/18 High grade type of washed arabica.Chapter 1: World coffee trade – an overview 17 Grading and classification Green coffee is graded and classified for export with the ultimate aim of producing the best cup quality and thereby securing the highest price. ( Côte d’Ivoire El Salvador Ethiopia Guatemala India . others indicate defects per 300 g. Often specified with further details. However. strictly soft. defect count and cup quality.e.coffeeresearch. Classification is PB. regarding permissible defects. 3/5 defects Strictly High Grown (above 1. strictly soft. scale is from 0 (best) to 4 based on screen size and defects. 3–5 defects per 1. Ivory Coast Robusta Grade 2 Grade 2. good roast.supremo. India Arabica Plantation A Washed arabica.400 m.org. Brazil Santos NY 2/3 Screen 17/18. Terminology on size and defects as used for classifications is also found at www. good cup (often seen quoted as ‘Swedish preparation’). which are not listed here. there is no universal grading and classification system – each producing country has its own which it may also use to set (minimum) standards for export. natural) arabica from the Jimma region.000 beans according to some exporters. Ethiopia Jimma 5 Sun-dried (i. Scale includes five altitude levels from below 900 m (Prime washed) to above 1. screen 17 with max. characteristics. European preparation: above screen 15. ‘The Origins’ Encyclopedia’ at www. sometimes also bean shape and colour Number of defects (imperfections) Roast appearance and cup quality (flavour.200 m and Central Standard from 500–900 m). cleanliness…) Density of the beans Most grading and classification systems include (often very detailed) criteria. The diversified classification terminology used in the trade is illustrated with a few examples below. A.
acceptable mix of bean types. PB. Internal grading system (E. Descriptions are often supplemented with further details on moisture content. 5% blacks and broken Grade 2 out of six grades: Special Grade and Grade 1 to 5. PB. on a scale from 400 m to 1. EK-1 and EK-Special) and processing depends on the region (island). TT and T) is based on bean size and density. Coffee quality. B. screen size and quality criteria generally are discussed further in chapter 11. further detailed by liquor quality into 10 classifications. A. Illustration of a defect count for sun-dried (natural) coffee Defect 1 black bean 2 sour or rancid beans 2 beans in parchment 1 cherry 1 large husk 2–3 small husks 3 shells 1 large stone/earth clod 1 medium-sized stone/earth clod 1 small stone/earth clod 1 large stick 1 medium-sized stick 1 small stick 5 broken beans 5 green or immature beans 5 insect damaged beans Count 1 1 1 1 1 1 1 5 2 1 5 2 1 1 1 1 Bean size. C. PSC. AB. Viet Nam Viet Nam Robusta Grade 2 max. bean size. fair average quality. . odour. AA. Y1. X. colour. Grade 4 allows 45–80 defects. Region or other details are sometimes specified as quality (e.18 Chapter 1: World coffee trade – an overview ) Indonesia Indonesia Robusta Grade 4 The export grade scale goes from 0 (best) to 6. based on screen size and defects. defect count. Y2 and T. roast aspects and cup quality. etc. C. Kenya Mexico Papua New Guinea PNG Smallholder Y1-grade Y1 is one of the grades on a scale covering bean size.400 m. E. Mexico Prime Washed Prime Washed (prima lavado) from altitude between 600 m and 900 m.g. Top cupping coffees are mostly sold on actual sample basis. AB. AA. Kenya AB FAQ even roast clean cup Kenya arabica grade AB.
to sun drying Floaters to sun drying Water to recycling Pulp to composting Cherry reception/sorting Flotation – wet feed (or dry feed) Pregrader/pulper Pregrading channel Fermentation tanks Rubbish to waste Rubbish to waste Cherry reception/sorting Flotation and skin dry (optional) Sun drying and raking Lights to repass pulper Water to waste Water to recyling Washing Grading channel Heavies and lights separately to Skin drying = remove all free/excess water Sort out pods/skins Sun and/or mechanical drying Storage and conditioning. to waste Parchment shells to waste. . to waste Husk to composting – pods to repass Dust to waste – shells/ears to bagging off Remove rejects and foreign matter Manual or machine sorting Quality evaluation and classification Remove rejects and foreign matter Bagging off for shipment in bags or to silo for shipment in bulk * The process may obviously differ from one country to another. furnace or other use Dust to waste – shells/ears to bagging off Precleaning/destoning Milling/hulling Air cleaning (catador) Grading by bean size (screening) Grading by bean density (gravity table) Rubbish/stones etc.244 Chapter 11: Coffee quality Figure 18 Processing of coffee cherries and green coffee beans* WET PROCESS Delivers washed coffee DRY PROCESS Delivers natural coffee or ‘naturals’ Greens etc. minimum 2 weeks MILLING PROCESS Rubbish/stones etc.
org www.coffee-exchange.Appendix Useful websites These website addresses make up only a small sample of the vast and growing number of Internet sites providing useful information on coffee.tradingcharts.identrus.org www.ncausa.br www.eafca. The inclusion of a name on the list does not imply endorsement by ITC.org www.com TFC NYBOT LIFFE BM&F COFEI TGE ICC CFTC New York Board of Trade London International Financial Futures and Options Exchange Bolsa de Mercadorias & Futuros (Brazilian Mercantile & Futures Exchange) Coffee Futures Exchange India Ltd Tokyo Grain Exchange International Chamber of Commerce.liffe.intracen.green-coffee-assoc.common-fund. Inc.bsca.org www.bolero.org www.org www.imo.com www.futures.com www.org www.coffeenetwork.nybot.com www. Incoterms Commodity Futures Trading Commission Bolero International (e-commerce) InterCommercial Markets Corp.cofei.com www. CoffeeNetwork ICO NCA GCA SCAA ECF SCAE IACO EAFCA BSCA FAO CFC WB WTO IMO ITC International Coffee Organization National Coffee Association Green Coffee Association Specialty Coffee Association of America European Coffee Federation Specialty Coffee Association of Europe Interafrican Coffee Organisation Eastern African Fine Coffees Association Brazil Specialty Coffee Association Food and Agriculture Organization of the United Nations Common Fund for Commodities World Bank World Trade Organization International Maritime Organization International Trade Centre UNCTAD/WTO . (e-commerce) Identrus (e-commerce) Coffee Trading & Information Services International TradingCharts.tge.oiac-iaco.fao.br www.com.org www. The category under which they are listed here does not necessarily reflect their main line of activity.cftc.com www.iccwbo. Associations and organizations www.net www.scae.or.scaa.com www.org www.org Trading and prices www.com.org www.wto.com.org www. Many websites cover several categories of activities.com www.org www.com www.bmf.org www.ico.ecf-coffee.gov www.worldbank.intercommercial.jp www.
si.mc.org www.vanderbilt.coffeescience.fr www.ioia.jobin.org Sustainability and environment www.com www.org www.xrefer.de www.technoserve.gov Other useful information www.rainforest-alliance.transfairusa.codexalimentarius.sustainable-coffee.iso.ifoam.coffeeinstitute.fao.org) is a platform designed for the coffee industry to easily access international coffee trade data and market intelligence and gain visibility through networking facilities.org www.nationalzoo.cabi.net www.org www.ac.de www.codexalimentarius.asic-cafe.net www.310 Research and pest/disease management www.fas. Foreign Agricultural Service The European Union International Organization for Standardization Coffee Origins’ Encyclopedia Philippe Jobin: Les cafés produits dans le monde Transport Information Service.org www.fda.org www.dmgworldmedia.cr www.net Health www.p-maps.fairtrade.tis-gdv.coffeeresearch.usda.cirad.org www.net www.europa.org www.eu.edu www.gtz.coffeekids.org www.be www.supremo.org www.co.p-maps.pestmanagement.net www.edu/coffee www.inttra.cosic.com ITC’s Coffee Product Map ITC’s Coffee and Coffee Product Market Analysis Portal (www.org www.catie.org www.maxhavelaar. Two freely accessible modules – Business Contacts and Smart Links – provide classified links to information available on the web. Vanderbilt University Medical Center Coffee Science Source FAO/WHO Codex Alimentarius Commission United States Food and Drug Administration GTZ IOIA IFOAM FLO International Federation of Organic Agriculture Movements Fairtrade Labelling Organizations International Max Havelaar Foundation (fair trade) TransFair USA (fair trade) The Rainforest Alliance Independent Organic Inspectors Association Smithsonian Migratory Bird Center TechnoServe Coffee Kids Utz Kapeh Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) GmbH Common Codes for the Coffee Community ASIC CQI CIRAD CATIE CABI FAO IPMRC CAB International Food and Agriculture Organization Integrated Pest Management Resource Centre FAO/WHO Codex Alimentarius Commission Centre de coopération internationale en recherche agronomique pour le développement Centro Agronómico Tropical de Investigación y Enseñanza – Tropical Agricultural Research and Higher Education Center Coffee Research Institute Association scientifique internationale du café Coffee Quality Institute .com www.org www. TIS-GDV INTTRA ITC USDA EU ISO ITC’s Coffee Product Map United States Department of Agriculture.int www.gov www.org www. German Insurance Association INTTRA (ocean freight services) Xrefer (reference library) Coffee & Cocoa International (magazine) FDA CoSIC ICS CSS Coffee Science Information Centre Institute for Coffee Studies.org www.uk www.fr www.utzkapeh.
54–56. 1211 Geneva 10. programme design for trade promotion International Trade Centre U N C TA D / W T O ITC: Your partner in trade development For more information: Street address: ITC.org . Switzerland. Switzerland. rue de Montbrillant. ITC works in six areas: ᮣ ᮣ ᮣ ᮣ ᮣ ᮣ Product and market development Development of trade support services Trade information Human resource development International purchasing and supply management Needs assessment.org Internet: http://www. Palais des Nations. Postal address: ITC.intracen. Geneva. in their efforts to realize their full potential for developing exports and improving import operations. and particularly their business sectors. Telephone: +41 22 730 0111 fax: +41 22 733 4439 e-mail: itcreg@intracen. ITC supports developing and transition economies.ITC: Your Partner in Trade Development The International Trade Centre (ITC) is the technical cooperation agency of the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO).
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