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Volcafe supports profitability at origin

From the April 2018 issue.

Volcafe believes that without profitability at origin, there can be no sustainability in the coffee industry.

Green bean trading company Volcafe is definite about what sustainability means to the company and the coffee industry.

The company, which was founded in 1851 and operates in the world’s main coffee-producing countries and importing markets, believes that without profitability at origin, there can be no sustainability.

“The growth in sustainable coffee, which had been gaining momentum, appears to be faltering as many participants in the industry look to define how to react following consolidation in the roasting industry,” says Volcafe Managing Director Trishul Mandana.  “Despite this setback, committed participants in the supply chain continue to roll up their sleeves and get involved at origin, where the land is tilled and the coffee beans are grown. And yet, despite the fervour with which we all discuss sustainability, profitability remains a dirty word. That has to change.”

In 2014, Volcafe undertook a two-year initiative to research and develop a global approach to sustainably sourcing high-quality coffees. The company drew on the expertise of its field teams, pooling their knowledge and experience, to document best-practice strategies at origins.

It then developed a farmer support organisation to provide direct technical assistance to farmers, helping them to improve their coffee quality, farm productivity, and yields. The company named this strategy the Volcafe Way.

Volcafe Way is now active in Africa, Asia, and Latin America.

Mandana says Volcafe Way is a grass-roots approach to coffee sourcing that teaches the farmers commercial and agronomic knowledge. It has one clear aim: to ensure that farmers make money and thereby incentivise future generations to carry on the family tradition.

If coffee farming is a viable profession, upstream profitability sends a positive ripple right through the supply chain, securing consistent sources of supply and preserving the interests of downstream participants and consumers.

Carlos Ortiz, Global Manager for Volcafe Way, tells Global Coffee Report most of today’s business models in coffee are focused on maximizing a company’s profits every year, without necessarily considering the other value chain actors, risks, and needs. “This has proven to be short-term thinking on a long-term business.” 

The farmers may have good agricultural practices but lack the business skills they need or may not even see their farm as a business, so are unable to make a profit. If they keep failing to make money, Ortiz says, they will most likely change their crop or sell their land.

“Volcafe Way proposes a new business model that adds value to the entire value chain and puts farmer’s profitability front and centre,” he says.

Sustainability Manager & Specialty Coffee Project Manager Reena Eddiks says sustainability along commodity supply chains can be complex, but if discussions overrule actions, nothing will be achieved.

“If we want to continue our business – and that is necessary if you want to continue enjoying your morning coffee – we must pay attention to the coffee communities in origin countries,” she says. “So far, this attention has mostly been market driven. Volcafe Way turns this around, putting the farmer at the very centre, and putting him in the position of being in charge again.”

Growers participating in Volcafe Way sign an agreement that outlines each party’s respective responsibilities. It is not a contract and the producers are not legally obligated to follow the advice, nor are they obligated to sell the coffee to Volcafe.

The agreement simply lays out the plan and makes clear the actions that the Farmer Support Organisation and producer partners have agreed upon to encourage long-term commercial viability, Ortiz says.

“Once a Volcafe Way business-model farm starts to flourish, we promote it as a local learning hub where surrounding communities can exchange best practices,” Ortiz says.

“The early adopters serve as catalysts for change, transferring business skills to neighbouring farms so that everyone learns and benefits, whether they work directly with us or not.”

Mandana says there are fantastic sustainability initiatives within the industry but more robust measures are needed.

“Agronomy expertise, climatic adaptation and social investment alone are not enough,” he says. “The root of sustainable coffee is profitable coffee farming. It is about providing deserving, hard-working farming families with a livelihood that allows them to prosper, invest and hand down the fruits of their labour to the next generation.”

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