By Ric Rhinehart
As I sit here in the capital city of the birthplace of coffee (Addis Ababa, Ethiopia), after attending the International Coffee Organization’s 4th World Coffee Conference, I am driven to reflect on the conversations at the conference, in the hallways, and over dinner. The state of the global coffee market and the outlook for the future dominated every conversation. Several themes emerged, and I thought I might share them here.
From the coffee consumption side, things look pretty rosy. Consumption is growing nicely in the global sense, driven largely by increased consumption in Asia, growth in internal consumption in producing countries, and by a surprisingly strong performance from traditional markets, particularly in North America and Japan. In spite of strong growth, prices remain soft, and roasters have profited from this scenario.
The producing side, on the other hand, is baffled by this scenario. Demand is consistently increasing, production has been at a deficit to consumption for two years—and yet prices continue to decline. Meanwhile, input, labor, and logistics costs have all increased, with a net result of tremendous pain for the producer. There was much said about the relationship of currency exchange rates in Brazil and Colombia to the current market scenario, as well as a look at the overall state of commodities around the world, with oil as a leading indicator. One could explore these topics and their complexities endlessly, but it does little to alleviate the current pain for the producer, nor to suggest a path forward. For many, and especially for small-scale producers in traditional washed Arabica origins, the situation seems hopeless. Added to the difficulties of rising costs and low returns are a host of other problems. Coffee leaf rust has returned to much of Mesoamerica with renewed vigor, labor shortages and high costs have plagued the coffee sector, and climate change has driven ever more erratic weather.
The 4th World Coffee Conference in Addis Ababa, Ethiopia, was held March 6-11, 2016.
(Photo: International Coffee Organization)
From the backdrop of these two perspectives, the emerging theme that dominated conversations was sustainability, and most often social and economic sustainability. The ever-increasing difficulty of coffee farming as a livelihood is driving the maturing generation off the farm and into urban centers. The farmer population is aging around the world, with average ages in many countries now approaching 60 years. Forward-looking actors in the coffee value chain, from all segments, are deeply concerned with how to address these core issues; not only to ensure a supply of coffee in the future, but to minimize the pain of social disruption and endemic poverty in producing regions.
The gravity of the situation is borne out by the presence of many initiatives and organizations working to address the current precarious state of affairs. There’s Coffee and Climate, focused on developing climate-smart agriculture strategies; the Sustainable Coffee Challenge, harnessing the commitments of deeply invested roasters; World Coffee Research, funded by roasters and focused on developing the coffee plants of the future; the brand new collaborative impact organization the Global Coffee Platform. All were here struggling to come to grips with how a vulnerable supply chain that provides a livelihood for millions of families can cope with an uncertain future.
International Women in Coffee Alliance (IWCA) & Ethiopia Chapter sign agreement at the 116th Session of the International Coffee Council. (Photo: International Coffee Organization)
Gender equity in particular dominated the considerations of nearly every organized group, and the single most inspiring cause for optimism here was the presence of the strong, thoughtful, and cohesive community of women active in the sector. Panel after panel, speaker after speaker, was challenged to come to grips with critical role that gender equity plays in changing the current scenario, and it was heartening to see so many willing to embrace a real change in this arena.
The key takeaways from these conversations that are lodged in my mind are these: First, there is no single entity, no magic bullet, and no simple solution that can solve for these challenges. Real progress will require a sustained, collaborative effort by a broad range of stakeholders, and will depend on an absolute willingness to subordinate all other agendas to the single goal of achieving a sustainable coffee producing sector. Second, the inclusion of women—as well as the upcoming generation of young people—on an equitable basis, is a necessary step if any efforts are to succeed. Lastly, we are strengthened by our willingness to collaborate and work together to ensure that everyone involved in the production of specialty coffee has the opportunity to benefit from this growing global demand.
Ric Rhinehart serves as executive director of the Specialty Coffee Association of America. Prior to taking on this position he was the president of a Los Angeles, California-based roaster and retailer. Mr. Rhinehart has over the past 25 years held executive positions in several coffee and tea firms. Mr. Rhinehart has designed, developed, and produced a wide range of both tea and coffee products and is co-author of Tea Basics, a primer on premium tea, published by John Wiley & Sons in 1998. He was a founding member of the American Premium Tea Institute, where he served on the Board of Directors and as president. Mr. Rhinehart has also served as chair of the Private Sector Consultative Board of the International Coffee Organization, as a trustee for the Coffee Quality Institute, as a director for World Coffee Research, and as a director for World Coffee Events.