Business Case

Across the coffee sector, many coffee producers and their families live well below recognized “living income” benchmarks. I was asked early 2019 by IDH to lead The Task Force for Coffee Living Income (TCLI) that started mid 2019 to answer a pivotal question:

What are effective sourcing and pricing practices that coffee companies can adopt to help close the living income gap?

This task force report presents a framework for measuring the living income gap in coffee and identifies pathways forward based on an analysis of data from a cross section of coffee producers in Colombia. Task Force members from across the coffee sector like Nestlė, Starbucks, JDE, Lavazza, FNC, Tchibo, S&D, Olam, NKG, Fairtrade, SCA, GCP contributed in very collective and engaged spirit extensive supply chain data, and expert insights during group meetings and bilateral discussions. This unique sector-wide approach made it possible to evaluate the living income of coffee producers across all market segments and coffee qualities. Some of the members of the task force have also had numerous contributions previously to the Sustainable Coffee Program (SCP).

The results of the 9 months intense taskforce work indicate that most conventional small producers producing mainstream coffee face an insurmountable living income gap that cannot be solved with technical assistance and price support alone. For small producers with more exposure to technical assistance, certification or producing higher quality coffee the living income gap could be narrowed with a mix of higher prices, improved sourcing practices and policy support. Small producers of highest quality specialty coffee can earn a living income due to higher yields and prices. In general, medium and large- scale producers currently earn a living income.

The full report is publicly available on IDH’s website https://www.idhsustainabletrade.com/publication/task-force-for-coffee-living-income-report-summary/