Fairtrade Vs. Direct Trade – the Coffee Seal

Fairtrade Vs. Direct Trade – the Coffee Seal

Coffee is coffee – right? Coffee seal under the microscope

Direct Trade, Fairtrade, Rainforest, UTZ: You will certainly ask what the meaning behind the seals is. Not only in the course of consumer protection, but also to protect the people who work on the grassroots, we, as consumers, increasingly come across products that have been given seals of approval and certificates. So also with coffee. In this article you will find out what authorization you have and what is behind the various coffee certificates.

The reason why there are coffee certificates:

In the past, unlike today, coffee was a luxury product that not so many people could afford. It is currently the most popular drink, at least in America. What often turns out to be shiny on chic packaging, unfortunately often still has a non-shiny background.

Did you know that around 1.4 billion people live on less than 1.25 US dollars a day? Many coffee farmers in the growing countries often have to work under inhumane conditions and only receive a tiny fraction of the price that the consumer pays for their coffee. As it is well known that unimaginable poverty prevails in the so-called “Third World”, entire families and mostly even children are often forced to work on the coffee plantations.

To improve the situation in general , the various seals of approval were brought into being. Thanks to educational reports in the media, consumers are buying more and more consciously. This is also the case with coffee, because here the quality seals on the coffee packaging offer good orientation.

The Fairtrade label under the microscope

The seal is based on the following basic idea: The seal of approval is primarily intended to encourage smallholders so that they can shape their future into their own hands. That is why the focus at Fairtrade is on self-management and independence. Fixed components are still the possibility of pre-financing crop yields and minimum prices. At Fairtrade, the fight against poverty is more important than specific environmental issues. Depending on the sales volume of the farmers, there is an additional social bonus that can be used to finance social projects in the vicinity of the farmers.

However, since the certification costs of the Fairtrade label are often too high for some coffee farmers who produce organically and sustainably, it is not even possible for this group to acquire such a label. In addition, in Fairtrade, the retailers are usually the winners and, by no means, the coffee farmers and coffee pickers. If, for example, the coffee increases by 50 cents per kilo, then the retailer does not simply increase its price by these 50 cents, but, depending on how he calculates the percentage trading margin, for example by 81 cents. Furthermore, the farmers do not earn much more than in conventional trade.

Conclusion: Not everyone involved in the entire coffee process benefits from Fairtrade.

Direct Trade: trading without intermediaries

With direct trade, as the term suggests, additional costly middlemen are excluded. These trade initiatives focus on the development and cooperation with independent smallholders and cooperatives on site. In direct trade, coffee farmers get a much higher price than is customary on the market for special types of coffee with excellent coffee quality.

These price guarantees are not infrequently far above those of the “Fairtrade” seal of approval. The price is often negotiated directly with the producer – without any intermediaries. So the coffee roasters turn to the farmers on site. You visit the plantations there in order to get a direct picture of the cherry quality. If they have the desired high level of production, the roasters enter into a direct partnership with the coffee farmer. For the latter, the model means that the coffee farmers receive higher revenues for the goods they produce while at the same time ensuring a secure income over a longer period of time.

With the help of Direct Trade, the roasters have the opportunity to grow unique coffee beans of excellent quality. In contrast to Fairtrade, Direct Trade relies on direct trade with the individual farmers. In contrast to Fairtrade certification, Direct Trade is not a registered seal of approval, but a strict commitment in dealing with coffee farmers. With this model, everyone benefits, namely the farmers, the roasters and the consumers.

Read more:

Coffee Investment – A Profitable Business?

Investing in Coffee: Speculating in Coffee

What is behind the “Rainforest” and “UTZ” seals?

The Rainforest Alliance focuses on the relationship between producers and the environment. The focus is on preserving the diversity of life, keyword “biodiversity”. The aim is to achieve agricultural use that is in harmony with nature and thus forms the basis for a better future for farmers. In order to achieve this goal, it is necessary to develop agricultural know-how and methods of sustainable management together with the farmers. The farmers should also be enabled to negotiate prices independently. In contrast to Fairtrade, there are no minimum prices or social premiums.

“UTZ” focuses on the various production steps and the end product. The foundation here is transparency along the entire supply chain and the generation of a market that focuses on responsibly produced products. This also includes, above all, the professionalization of plantation orders and the management of the respective farms. While “UTZ” originally focused on larger plantations and farmers’ associations, it is increasingly opening up to the interests of smaller associations.

Specialty coffee in connection with direct trade

All common coffee cherries can be harvested using Direct Trade. However, “Specialty Coffee” is often used in connection with this concept. The term is based on the rating of the ” Specialty Coffee Association of America “, abbreviated to “SCAA”. Behind it is the world’s largest specialty coffee organization, which ties extremely strict evaluation criteria to a coffee that is allowed to bear this name. So all coffees are subjected to a drastic test on a scale from zero to one hundred. Only faultless products with a minimum score of 80 are considered “Specialty Coffee”.

You might also be interested in the following:

Espresso Machine Test 2021 | Pay Attention to this When Buying an Espresso Machine.

Conclusion on the coffee seals

  • “ Fairtrade ”, “Rainforest” and “UTZ” are coffee quality seals with different emphases, but which are generally committed to improving the situation of coffee farmers.
  • The difference between Fairtrade and Direct Trade lies in the fact that not everyone benefits without exception from the first-mentioned quality seal, as the retailers often win.
  • Direct Trade excludes costly middlemen and focuses primarily on working with smallholders and roasters on site. The farmers receive far more money and – over a longer period of time – a secure income.
  • In general, all coffee cherries can be traded using the models mentioned. A specialty is the “Specialty Coffee” , which is of extremely high quality and is usually obtained via direct trade.