Coffee

True Price for consumers: coffee

For most of us, it’s hard to imagine a day without a cup of coffee. It’s what we start our day with or have over good conversations with friends. But have you ever considered the background and labor that goes into producing the coffee you drink?

Coffee: Peeze Nicaragua and Brazil

Peeze’s coffee from Nicaragua has the lowest true costs of the three coffees assessed in this study, which is six times lower than the conventional coffee from Brazil.

Location: Nicaragua
Year: 2015
Description: True Price calculated and compared the true price of the client’s Nicaraguan coffee with Nicaraguan Fairtrade coffee and conventional coffee from Brazil. Next, True Price identified and assessed two projects that could further reduce the environmental externalities of the coffee; micro-irrigation could reduce the true price with 23%, with a pay-back time of the initial investment of less than one year. A bio-digester was also identified as a financial viable solution for water pollution.

Coffee: IDH Vietnam

Location: Vietnam
Year: 2016
Description: True Price executed an extensive impact measurement and valuation project for coffee in Vietnam, a value chain where IDH executes sustainability programs. The study compared the social and environmental costs of conventional vs. certified production. The study attributed impacts on farm and retail level.

Coffee: Solidaridad Colombia

The researchers found the environmental external costs and the social external costs are around 25% lower in the production of CSA coffee than in conventional. While the external costs of CSA coffee are USD 2.50, the average costs of produce conventional coffee in Cauca is USD. 3.15.

Location: Colombia
Year: 2018 – 2019
Description: True Price used the measurement framework of true pricing and true return on investment to quantify the impacts from a cost-benefit perspective. The True Price study demonstrated that climate-smart agriculture (CSA) is more sustainable in terms of environmental costs. At the same time, It also contributes to a decent livelihood for farmers.

Coffee: Solidaridad Mexico

The true price of climate-smart agriculture (CSA) coffee from Mexico is $ 4.30, which is lower than the conventional coffee from Mexico. Conventional coffee has a true price of $11.70 per kilo of parchment coffee.

Location: Mexico
Year: 2017
Description: True Price used the measurement framework of true pricing and true return on investment to quantify the impacts from a cost-benefit perspective. The True Price study demonstrated that climate-smart agriculture (CSA) is more sustainable in terms of environmental costs. At the same time, It also contributes to a decent livelihood for farmers.

Coffee: Sustainable Food Trust Brazil

True Price evaluated the true price of coffee from Brazil and compared conventional coffee with best practices ‘Fairtrade Organic’ coffee.

The true price of conventional coffee from Brazil is $5.17, which is slightly higher than Fairtrade Organic coffee from Brazil, which has a true price of $4.58. True Price found even with the higher market price of Fairtrade Organic coffee, the true price was ultimately lower.

Location: Brazil (and the United Kingdom)
Year: 2013
Description: On December 6th 2013, the Sustainable Food Trust convened an international conference on the theme of ‘True Cost Accounting in Food and Farming‘. Bringing together world-leaders from across food, farming, conservation, research, finance and government policy, the conference aimed at investigating why our current economic system makes it more profitable to produce food in ways that damage the environment and human health, instead of rewarding methods of production that deliver benefits. Our Executive Director Adrian de Groot Ruiz presented a case study on the True Price of Coffee at the Sustainable Food Trust’s Conference.

Coffee: Fairtrade 7 countries

Living incomes of coffee farmers depend on their origin. As shown in the diagram above, in Vietnam, India and Indonesia the average household income lies above the living income, while in Kenya the living income is more than twice as high as the average household. Living incomes could not be calculated for Rwanda, Tanzania, and Uganda. For more information, see the full report or executive summary.

Location: Rwanda, Tanzania, Uganda, Kenya, India, Indonesia and Vietnam
Year: 2017
Description: True Price developed a rigorous and scalable methodology to measure the farmer household income of coffee producers across 7 countries. Results allowed us to compare wages and incomes to regional benchmarks. The analysis included insights in the distribution of farmer household income, the profitability of coffee and the value added.