GCR petitions industry leaders on the year ahead: the opportunities, challenges, and trends set to change the game and demand our attention in 2020.
Founder, Solidaridad Network and first fair trade labelling scheme
“Unboring” the coffee sector has to be our ambition for the decade to come. No more traditional thinking and boring debates leading to more of the same without real change.
We will see a lot of talk about sustainability and inclusivity, but I fear there won’t be effective action to turn the picture. 2020 will be a year of continued low prices, which will be challenging for smaller producers and traders. Consolidation at both ends of the value chain will be further stimulated by the introduction of processed cold beverages in the consumer market. Roasters will continue to use their traders as their banks with tightened terms of payment of up to 360 days, further stimulating concentration of trading companies.
It is time to protect competition in a freer market place, pushing back monopolies. From a different end, new concepts of forwards integration will be introduced.
What we also foresee is the growth of private, corporate sustainability programs at the cost of so-called Voluntary Sustainability Standards. Assurance of supply will be the leading motive narrowing the sustainability agenda down to its economic dimension. For 4C, the year 2020 will turn out to be a crucial one to survive because its programs highly overlap with private programs.
Apparently a winning entry point will be the upcoming concept of a true price and living income. With rather complicated tools and huge payments to overpaid consultants, an endless flow of country-specific true price calculations will be discussed in international fora. In my view, non-government organisations will run the risk just to justify low famer income based on debatable living income definitions and calculations.
Creating an upwards trend in pricing and farmer income requires much more than building awareness and mobilising voluntary commitments. This living income debate will sharply contrast with the realities in markets with continued price pressure and unbalanced supply chains.
Jeffrey Sachs’ convincing report Ensuring economic viability and sustainability of coffee production promises a more promising pathway. The strong combination of the development of National Coffee Sustainability Plans and a Global Coffee Fund underpinned by a multi-stakeholder approach could be a change-maker.
A key strategy includes moving from voluntary to mandatory commitments, regulatory frameworks offering “good governance”, and increasing producer profits transforming business models.
Hopefully, we will go from boring years to a new exciting decade of change. We can do it.