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Poul's Corner: June 16, 2017

Posted by Poul Mark on

So I saw on Twitter yesterday, posted by the World Coffee Research that was talking about one of the major crisis facing global coffee production by 2050 it’s expected that our coffee production will need to double but by that same time, the land available to farm would be reduced by half. So obviously there’s a problem there in that the land required to meet demands is just not possible. The other thing that doesn’t reflect that is more troubling and more impactful immediately today is the fact that producers are going to be fighting the creep of moving higher up the mountains due to climate change, but given the prices the farmers are being paid right now there are massive labour shortages in coffee producing regions. All the economic impacts that are putting pressure on producers. Not only is the land shrinking, but the resources to continue the coffee industry are increasing pressures on producers as well.

It’s really interesting to me that three weeks ago Starbucks was testifying to a congressional committee (in the US) and one of the things they were talking about was the myth that we’ve all perpetuated for a number of years, this myth that coffee is the second most valuable traded commodity on the planet, second to oil. I’ve been guilty of perpetuating that myth, and what we’ve come to know is that this just isn’t true. There are plenty of other commodities in the world that are traded that have much much more value than coffee. The list goes on but coffee is way down the list. Coffee is a $20 billion a year industry in terms of commodity trade. If you add value to that, it’s estimated that that number goes up $80 billion a year. But, regardless one of the biggest problems we have is that not enough of that value is going back to the producers. I’m going to sound like a resounding Gong on this message, but it’s absolutely important that we get this message out there and that consumers start to understand that the prices that they’re paying for coffee, while they might seem high, they’re not high enough in all honesty, because producers are just not getting being paid enough. They’re not receiving enough of the value of the benefit of that $80 billion a year to make it worth their while to make it sustainable.

So next time you’re at the coffee shop and you think you’re paying too much and you think you’re being cheated a bit, feeling like “Why do I have to pay that $5 or $5.50 for this latte,” maybe start to think a bit about the overall value chain and start to think a little bit about the plight of the people that grow the coffee that you so much enjoy and the kind of lives that they live. Maybe that will take away that sting of the $5 away a little bit.

Poul

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