Fair Trade Coffee Innovation
In its 35-year history, the global Fair Trade model has not been significantly modified. Meanwhile, the realities of the market and global production have changed significantly. Fair Trade USA recognizes the need to evolve in light of these changes, and to keep Fair Trade coffee relevant and growing. The organization is exploring ways to innovate the Fair Trade Certified model to deliver greater value to all participating stakeholders – including producers and industry.
To accomplish this, Fair Trade USA is launching its Innovation for Impact Initiative and Coffee Impact Advisory Board composed of leaders and experts from the global coffee supply chain. Read on to learn more!
Innovation for Impact Initiative
The Innovation for Impact Initiative is a multi-stakeholder engagement and design lab aimed at developing a more scalable, higher-impact coffee program. Fair Trade USA is partnering with IDEO.org, an award-winning design consulting firm specializing in innovation for social impact. IDEO.org will deeply engage producers, industry, and other key stakeholders in the design process; develop prototypes for rapid testing and learning; help evaluate results; and support the subsequent roll-out of new program features, all with an eye toward increasing impact.
Reflecting the rich diversity and experience of the Fair Trade Certified community, the Coffee Impact Advisory Board will provide critical input and guidance on the Innovation for Impact Initiative and help define support for new program solutions.
Coffee Impact Advisory Board
Research
Fair Trade USA Consultation Findings on Coffee Pricing
Fair Trade USA undertook an extensive consultation to determine whether the fair trade movement is solving coffee producers’ biggest problems. This research also informed whether Fair Trade USA would increase the minimum price for coffee sold under its Fair Trade Certified™ label. This consultation process included surveys distributed to nearly 400 producers and over 500 industry representatives (roasters, importers, and brands), as well as in-depth interviews with producer organizations and industry stakeholders. The consultation reflected feedback representing 84% of U.S. fair trade coffee volumes.
Fair Trade Coffee Program Updates
June 13, 2024
Fair Trade USA reaffirms coffee market stabilization strategy through 2025
A year after deciding to stabilize the market for Fair Trade Certified coffee, Fair Trade USA (FTUSA) is announcing the continuation of current pricing through the end of 2025. This decision means that the FTUSA minimum price and premiums will remain the same for at least another 18 months.
This decision was made with deep market analysis and ongoing stakeholder consultation. Coffee markets are experiencing extraordinarily high prices and volatility with resulting disruption to consumer demand, inventory levels, and producer sales. We believe that in order to deliver on our mission of eliminating poverty and promoting sustainable development for coffee producers, it is imperative to prioritize market stability in these times of extreme uncertainty.
We came to this decision by listening deeply to both producer and industry partners. These key stakeholders want to protect the current Fair Trade Certified market share developed over the last 25 years (200M pounds in the U.S. market) and the resulting impact to over 600,000 coffee farmers and their families worldwide.
In our consultation, we heard once again that the primary goal of producers today is to increase the volumes that they are able to sell on Fair Trade terms. Our outreach shows that a third of industry and producer representatives believe that maintaining the current price will increase demand. Over 65% believe that keeping the market stable is the best path to long-term viability and scalability. We also heard from both that raising the minimum price or premium would result in a high risk of decreasing demand within the North American market, with over 60% of respondents believing that demand for organic Fair Trade Certified coffee would be the most vulnerable. Our decision to prioritize market stability is directly informed by the collective insights and guidance of our stakeholders.
FTUSA will review its coffee minimum price and premium again in mid-2025 in consultation with stakeholders. We will announce our pricing policy for 2026 at that time.
Notably, FTUSA has articulated a vision and strategy for farmer impact that is based on growing sales volumes. Price stabilization is a key component of this strategy. Innovation that adds value and relevance to the Fair Trade model is the other pillar of our strategy. Toward that end, we are leveraging the expertise of our internal teams, external consultants, our esteemed Coffee Impact Advisory Board, and our trusted Council of Coffee Producer Leaders to continue exploring innovation efforts that unlock even more value and impact for producers and industry partners.
For example, at the annual Specialty Coffee Association (SCA) trade show in April, we convened over 160 coffee producer leaders from a dozen countries around the world to discuss the current market volatility, our volume-focused strategy for impact, and model innovation. Some of the key initiatives discussed included: European Union Deforestation Regulations (EUDR) compliance; supporting and monetizing climate-friendly practices such as regenerative agriculture; and developing the technological capabilities to enhance supply chain transparency and deliver stronger access to producer impact data. With regard to this last initiative, we believe that “data on demand” – for industry, consumers, and producers – is critical to meet growing stakeholder demand for supply chain insights and content. These insights will allow producers and industry to better understand risks, enhance outcomes, and partner more effectively to bring more Fair Trade Certified coffee to market. Investing in technology, data, and content will also allow us to offer consumers more opportunities to connect with the farmers behind the beans that they buy, driving greater demand.
We will continue to share updates as we test, learn, and iterate our initiatives. After 25 years of market and movement building in the United States, we are proud of our collective impact. Clearly, we have helped evolve the global coffee market toward more responsible, sustainable practices – benefitting millions of farmers and their families. At the same time, we are humbled by how far we have to go. We seek to help improve the lives of coffee farmers, contribute to the development of rural communities, and protect the environment – at scale. We are committed to partnering with producers and industry to achieve that vision. And we have heard them clearly: during these turbulent times of market volatility, stabilizing the Fair Trade price and premium – combined with model innovation – are the best strategies for growing the impact of our global movement.
October 11, 2023
Fair Trade USA will maintain the minimum price and premium for Fair Trade Certified coffee during 2024
Now several months into our ongoing work to determine the future vision of Fair Trade Certified coffee with the Coffee Innovation Advisory Board and IDEO.org, it is clear that keeping the market for Fair Trade Certified coffee stable is a priority. Consumer confidence continues to decrease as inflation rose again last quarter, and stakeholders continue to express concern about their ability to increase volumes in an uncertain economy. This is backed by new numbers from the Coffee Barometer Report showing a steady increase of supply of Fair Trade coffee over the last 4 years, but with demand moving at a slower pace. The inability to sell fair trade coffee on fair trade terms is the biggest risk that coffee farmers face.
With impact our north star, maintaining and increasing the demand for Fair Trade Certified coffee is our priority. Therefore, aligned with the need to ensure stability in the market, Fair Trade USA is announcing that no changes to the minimum price and premium for Fair Trade Certified coffee will go into effect in 2024. This will allow us to partner with producers and industry to continue growing the market and consumer demand, while also ensuring enough time for the full due diligence that coffee producers deserve, and the market needs. We will continue to leverage the expertise of the Coffee Impact Advisory Board and IDEO.org and will ensure sufficient lead time if any changes are deemed appropriate in 2025.
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Leer en Español:
Fair Trade USA mantendrá el precio mínimo y la prima para el café Fair Trade Certified durante el 2024
Tras varios meses de trabajo para determinar la visión de futuro del café certificado de Comercio Justo con la Junta Consultiva de Innovación del Café e IDEO.org, está claro que mantener estable el mercado del café certificado de Comercio Justo es una prioridad.
La confianza de los consumidores sigue disminuyendo a medida que la inflación aumentó de nuevo el trimestre pasado, y las partes interesadas siguen expresando su preocupación por su capacidad para aumentar los volúmenes en una economía incierta. Esto se ve respaldado por las nuevas cifras del Informe del Barómetro del Café, que muestran un aumento constante de la oferta de café de Comercio Justo en los últimos 4 años, pero con una demanda que avanza a un ritmo más lento.
La dificultad de vender café de comercio justo en condiciones justas es el mayor riesgo al que se enfrentan los caficultores. Siendo el impacto nuestro objetivo, el mantener y aumentar la demanda de café certificado de Comercio Justo es nuestra prioridad. Por lo tanto, en consonancia con la necesidad de garantizar la estabilidad en el mercado, Fair Trade USA anuncia que en 2024 no entrará en vigor ningún cambio en el precio mínimo y la prima para el café Fair Trade Certified, comercializado bajo condiciones de Fair Trade USA.
Esto nos permitirá asociarnos con los productores y la industria para seguir haciendo crecer el mercado y la demanda de los consumidores, garantizando a la vez el tiempo suficiente para la debida diligencia que los productores de café merecen y el mercado necesita.
Seguiremos aprovechando la experiencia de la Junta Consultiva sobre el Impacto del Café y de IDEO.org, y garantizaremos un plazo suficiente en caso de que se considere oportuno realizar algún cambio en 2025.
July 6, 2023
Fair Trade USA Maintains Current Coffee Price and Premiums, Launches ‘Innovation for Impact Initiative’
Fair Trade USA will maintain current minimum prices and premiums for all coffee sold under its Fair Trade Certified™ label through the end of 2023.
Simultaneously, it is launching a groundbreaking, multi-stakeholder Innovation for Impact Initiative, aimed at building consensus between industry and producers around a renewed, more scalable, higher-impact Fair Trade Certified program.
This strategic decision comes after a comprehensive stakeholder consultation and listening tour over the last two months. Through surveys and direct interviews, Fair Trade USA engaged over 500 roasters, importers, and retailers and nearly 400 producer organizations. Participants who responded to the consultation represent over 84% of all Fair Trade Certified coffee sold in the U.S. market, which was 210 million lbs. in 2022. 63% of survey respondents were producers and 37% were industry partners (roasters, importers, and retailers).
The major finding: the overwhelming majority of these companies warned that an increase in price in the current inflationary environment would significantly lower demand and volume over the next 12-24 months, reducing overall producer impact. Over 60% of the respondent roasters, importers, and retailers advised Fair Trade USA not to implement a price increase.
While many producer leaders interviewed supported the price increase in principle, they also expressed concerns about the magnitude of the increase, the timeline for implementation, and the risk of reduced market demand. Most producers only sell small percentages of their total production on Fair Trade terms, so their primary goal is to secure and increase demand.
In response, Fair Trade USA is launching the next phase of its multistakeholder engagement, the Innovation for Impact Initiative. This initiative will enlist broad, creative input from industry and producers, aimed at renewing the Fair Trade Certified coffee program for impact through volume and scale. The global Fair Trade model, which has not been significantly modified in its 35-year history, will need to evolve and deliver greater value to all participating stakeholders to remain relevant and grow.
Important improvements to the Fair Trade USA coffee program will be made through multi-stakeholder engagement, meaningful dialogue, and consensus-building between industry and producers. Fair Trade USA plans to design and develop the new program over the next 3-4 months with implementation of program improvements in 2024, taking into consideration implementation timelines.
To guide and support the Innovation for Impact Initiative, Fair Trade USA is creating a diverse, global Coffee Impact Advisory Board. Rüdiger Meyer, the founder and former CEO of FLOCERT, will chair this Board. Lindsey Bolger, former SVP and Managing Director of Keurig Trading; Carlos Vargas, General Manager of CoopeTarrazú, the largest Fair Trade coffee cooperative in Costa Rica; and Guido Fernandez, EVP of the Colombian Coffee Federation, are a few of the other distinguished Board members. The rest of the Board will be formally announced in the next few weeks.
Fair Trade USA is the leading third-party certifier of Fair Trade products in North America. As an independent organization with a 25-year track record of market- and movement-building, Fair Trade USA is not required to follow pricing set by Fairtrade International (FLO). Its past adherence to Fairtrade International’s minimum price and premium was purely voluntary.
Fair Trade USA is free and able to set a different policy if it finds that is in the best interest of its mission and stakeholders, which is currently the case.
For importers, roasters, and retailers currently working with Fair Trade USA, little will change in the months ahead. The minimum price ($1.40/lb. for washed Arabica, $1.05/lb. for washed Robusta), social premium ($0.20/lb.) and organic differential ($0.30/lb.) will all remain the same. Authorized producers, cooperatives, and exporters will also remain the same. New guidance on contracting and reporting will be issued in the next few weeks, but changes are expected to be minor. The Fair Trade USA team will continue to closely support our 500+ coffee industry partners through the transition.
As background, on March 30, 2023, Fairtrade International (FLO) announced it will raise its coffee minimum price and organic differential, effective August 1, 2023. This decision was aimed at addressing the rising cost of production for producers. In an effort to ensure that its stakeholders were properly engaged and heard, Fair Trade USA conducted its own stakeholder consultation that began in April and ran through June 2023, leading to the decisions being announced today.
Fair Trade USA will publish a report on the findings of its consultation and listening tour in the coming weeks. It will continue to provide program updates to all stakeholders. For additional questions, please email coffee@fairtradeusa.org. In addition to the frequently asked questions below, please reach out to pr@fairtradeusa.org with any media request.
Are you a Fair Trade Certified industry partner or producer and didn’t get a chance to share your thoughts? Reach out to coffee@fairtradeusa.org to get the survey.
May 3, 2023
We heard great enthusiasm and solidarity among the industry around the needs of producers and the hopes for a higher price for their coffee that fully covers the high costs of production. We also heard a considerable amount of confusion and nervousness regarding the timing of the announcement as well as feelings of limited engagement in advance of such a large and rapid adjustment to the model. The main concern expressed by multiple stakeholders is that this adjustment could cause a reduction in market demand that could threaten the impact of a higher price.
We received positive feedback for our decision to launch our own consultation with the North American coffee industry allowing producers to better understand the possible repercussions of a significant increase in the price for Fair Trade Certified coffee. This will allow the 500+ importers and roasters that work with our seal in this market the opportunity to have their voices and perspectives heard in the process. We believe it is important to take the necessary time for such a consultation. Details on the formats and options for consultation will be coming in the next few weeks.
Following this consultation, we will convene roundtable-style dialogue opportunities to enable direct conversation between producers and industry. This will allow all parties to share perspectives and reach positions that are viable for both, aimed at ensuring growing impact for producers in the years ahead. Fair trade is an alliance based on shared interest and mutual benefit. We believe it is crucial to open space for dialogue, mutual understanding and innovative solutions before arriving at any determination.
In the meantime, we will honor all Fair Trade Certified coffee contracts at the current price and premium levels. We will also make sure that our partners have access to timely information on any potential changes in our program. We will be providing updates regularly over the coming weeks.
For additional questions, please reach out to your Fair Trade USA account manager or email coffee@fairtradeusa.org.
Media inquiries can be sent to pr@fairtradeusa.org
April 7, 2023
Over the last 25 years, as the leading third-party certifier of fair trade products in North America, we believe the fair trade model is most successful when industry and producers are fully and strategically aligned. At its best, fair trade certification is a win-win partnership in which farmers, cooperatives, companies, and consumers all thrive together. Therefore, important changes to fair trade standards are best made through multi-stakeholder engagement and meaningful dialogue in which parties can co-create their shared future.
Fair Trade USA is launching its own coffee industry stakeholder consultation. The objective is to fully include and engage companies and producers operating in the North American market under the Fair Trade Certified seal. This consultation will address not only coffee prices but more broadly how fair trade certification can continue to innovate for greater impact in the future. We are eager to listen and learn.
Our commitment to the fair trade community is to share rich and informative feedback with trust and transparency. In the coming months, we will convene a multi-stakeholder review of the consultation results and create a genuine dialogue between the U.S. coffee industry and the producers selling into this market. This discussion will directly inform Fair Trade USA’s decisions regarding any changes to the standards for coffee sold under the Fair Trade Certified seal.
In the meantime, we will honor all Fair Trade Certified coffee contracts at the current price and premium levels. We will also make sure that our partners have access to timely information on any potential changes in our program. We will be providing updates regularly over the coming weeks.
For additional questions, please reach out to your Fair Trade USA account manager or email coffee@fairtradeusa.org.
Media inquiries can be sent to pr@fairtradeusa.org.
Frequently Asked Questions
Will Fair Trade USA raise its minimum coffee price and premium along with Fairtrade International?
No. Fair Trade USA is maintaining its pricing and premiums for all coffee traded under its Fair Trade Certified™ label at least through the end of 2025.
Isn’t Fair Trade USA required to follow Fairtrade International’s increase in minimum price and organic differential in 2023?
No. Fair Trade USA is the leading third-party certifier of Fair Trade products in North America. As an independent organization with a 26-year track record of market- and movement-development, Fair Trade USA is not required to follow pricing set by Fairtrade International. Its past adherence to Fairtrade International’s minimum price and premium was purely voluntary. Fair Trade USA is free and able to set a different policy if it finds that is in the best interest of its mission and stakeholders, which is currently the case.
Why is Fair Trade USA maintaining current minimum coffee price?
Fair Trade USA conducted a comprehensive stakeholder consultation in 2023. Over 60% of the companies interviewed signaled that an increase in price in the current inflationary environment would significantly lower demand and volume during the next 12 to 24 months following the price increase, reducing overall producer impact. More than two-thirds of the respondent roasters, importers, and retailers advised Fair Trade USA not to implement a price increase. To protect the market volumes that drive producer impact, Fair Trade USA made the decision to continue with current coffee prices for the rest of 2024 and extend throughout 2025. The minimum price ($1.40/lb. for washed Arabica, $1.05/lb. for washed Robusta), social premium ($0.20/lb.) and organic differential ($0.30/lb.) will all remain the same.
How extensive was the recent stakeholder consultation conducted by Fair Trade USA?
Fair Trade USA conducted an extensive stakeholder consultation and listening tour spanning three months in 2023. Through surveys and direct interviews, Fair Trade USA engaged more than 500 roasters, importers, and retailers and nearly 400 producer organizations. Participants who responded to the consultation represent over 84% of all Fair Trade Certified coffee sold in the U.S. market, which last year was 210 million lbs. 63% of survey respondents were producers and 37% were industry partners (roasters, importers, and retailers).
Will Fair Trade USA raise coffee prices in the future?
Fair Trade USA will maintain the current coffee price and premiums for companies and producers trading under the Fair Trade Certified label through at least the end of 2025. Any future changes to price and premium will be determined through multistakeholder consultation and with the guidance of the Coffee Impact Advisory Board and with support from IDEO.org.
What will change in the way I purchase and sell Fair Trade Certified coffee in the future?
For importers, roasters, and retailers currently working with Fair Trade USA, little will change. Minimum price, social premium, and organic differential will all remain the same. Authorized producers, cooperatives, and exporters will also remain the same. New guidance on contracting and reporting was disseminated and changes were minor. The Fair Trade USA team will continue to closely support our 500+ coffee partners through these changes. If you have questions or concerns, please don’t hesitate to reach out to your account manager at Fair Trade USA, or email us at coffee@fairtradeusa.org.
What is the Innovation for Impact Initiative?
What are some of the innovations that Fair Trade USA foresees in its coffee model through this initiative?
What is the mission and timeline of the Coffee Impact Advisory Board?
The mission of the Coffee Impact Advisory Board is to provide strategic guidance, leadership, and counsel to Fair Trade USA in support of the innovation and renewal of our global coffee program. The Board’s primary objectives are to support deep stakeholder engagement and consensus-building, program design and development, experimentation and learning, and monitoring and evaluation of impact. The Board launched its work in August 2023 and will deliver a blueprint for the next chapter of the Fair Trade Certified coffee program.
Who will guide and support the Innovation for Impact Initiative?
The Coffee Impact Advisory Board will partner with Fair Trade USA staff and IDEO.org to guide this initiative. The members of the Board are highly respected leaders and luminaries from the global coffee community who reflect the diversity of our stakeholder community. Board members bring deep wisdom and expertise in a range of relevant fields, including coffee production, trade finance, producer capacity building, responsible sourcing, standards and certification, technology and data, and consumer activation.
Who are the members of the Coffee Impact Advisory Board?
Rüdiger Meyer, the founding CEO of FLOCERT, chairs this Board. A few of the other distinguished Board members include Lindsey Bolger, former SVP and Managing Director of Keurig Trading; Carlos Vargas, General Manager of CoopeTarrazú, the largest Fair Trade Certified coffee cooperative in Costa Rica; and Guido Fernandez, EVP of the Colombian Coffee Federation. See the full list above.
How can I provide input and ideas into the Innovation for Impact Initiative?
Please send an email to coffee@fairtradeusa.org expressing your interest and we will be in touch. Also, keep an eye out for regular coffee updates on this webpage.
