Coffee Value Chain Part 1: Building the Coffee Supply Chain

After indulging in the cocoa value chain, in this post we’ll give you a flavour of the coffee supply chain structure and sustainability challenges. Grab a cuppa and read on.

The Coffee Supply Chain

The Physical Map

If you want to find the coffee cherry-like fruit, you should look for two types of plants: Coffea arabica (Arabicas) and Coffea canephora (Robustas). However, you can narrow down your search by applying some coffee filtering criteria. In fact, for optimal coffee growth, you need a place that meets specific requirements in terms of latitude and altitude. The first criteria lead us to the Bean Belt, hosting most of the world’s coffee-growing regions. This is a tropical band including Central and South America, Africa, the Middle East, and Southeast Asia. Here, at elevations of 800 to 2,220 metres above sea level, you have the ideal conditions for growing coffee.

A Fruitful Journey: From Cherries to Beans

When harvesting coffee cherries, smallholder farmers pick them from the bushes and put them into bags. They then deliver the cherries to a coffee washing station or wet mill, where they’re mixed for processing, thus losing the farmer-level traceability. Here we’ve reached the end of the coffee value chain’s first mile.
The wet mill processing takes the coffee cherries pulp out. Not surprisingly, you use a machine called a pulper to do that. The leftover seeds (two per cherry, generally) are left to ferment in a tank before being washed. An alternative to the wet route is the dry or natural process, which you may have in dry climate countries like Brazil or Ethiopia. In this case, you dry the coffee cherries before removing the pulp.
At the end of the de-pulping stage, you have the so-called parchment coffee. This is nothing but coffee seeds (or beans if you like) with a paper-like outer layer (i.e., parchment) still on. You then dry parchment beans on patios or raised beds until they reach a moisture content of 11%.

At this point, coffee beans are ready to be graded, bagged, and stored. Here it’s when we assign a barcode to each bag that can be used in Farmforce for tracking purposes. The next step is dry milling, which removes the parchment. While the process may sound complex, getting rid of the external layers (pulp, parchment) and cocooning the final product (beans or seeds) reduces the pesticide exposure risk compared to other crops.

The unroasted beans, a.k.a. green coffee, are passed on to an exporter (sometimes referred to as a green coffee merchant) like Nestle for instance. This will then distribute the green seeds to a roaster, who will turn them into ready-to-brew flavoursome beans.

Coffee Supply Chain Issues

Deforestation

Along with farming practices (e.g., fertilisers), the destruction of primary forests is a major environmental downside of consuming too much coffee. In fact, as its global demand increases, so does the need for new farming land, thus causing coffee growers to expand into forested areas. As reported by Forest Trends, worldwide coffee production increased by 24% between 2010 and 2018, with peaks of 97% in Honduras. And the coffee craving is expected to boom. By 2050, our thirst for coffee may rise by up to 163%.

The result of this? A huge carbon footprint across the coffee supply chain.

In 2017 alone, because of their forest-damaging value chain, the top ten global coffee producers emitted as much CO2 as that released by 4.5 million cars.

But why is this happening?

Ironically, climate change is one of the factors increasing deforestation risk. Based on data gathered in Colombia, the variation of rainfall patterns will push farmers to explore new green areas at higher altitudes. To add to that, a cocktail of corruption and lack of traceability in some of the coffee-growing nations is fuelling illegal deforestation.
Being the world’s largest coffee consumer, last November the EU proposed a new regulation to limit the imports to deforestation-free coffee only. However, this means that multinational companies (MNCs) in the coffee sector will have to step up their supply chain traceability to comply with this upcoming law.
On the other hand, it’s important to bear in mind the negative impact that anti-deforestation rules may have on the livelihoods of the 25 million smallholder farmers producing 80% of global coffee.

Child Labour

In developing countries like Costa Rica, nearly half of coffee farmers earn less than the minimum wage. When considering this, it shouldn’t surprise us when they bring their children with them to the field rather than sending them to school. In fact, ca. 9% of Costa Rican children between 5 and 14 are engaged in the country’s coffee production.

Unfortunately, renowned brands like Starbucks and Nestle recently stained their coffee supply chain’s reputation with child labour. A recent investigation found children as young as 8 working on Guatemalan farms growing beans for the coffee giants.

Hopefully, our coffee talk works as a wake-up call for all players involved in this complex value chain. Now it’s time to have another cuppa and find out how Farmforce is brewing up a more sustainable coffee supply chain.