A denomination of origin for coffee: will it help? Consumers still understand the concept "you get what you pay for," and continue their quest for quality coffee. But how does the industry ensure that the premiums being paid make it all the way back to the producer?
Over the last months, several facts deserved special attention. Firstly, an important controversy has been triggered by the wish of Ethiopian producers to claim control over their own regional denominations; secondly, the more discreet but probably also more significant affair was the decision taken by the European Union to acknowledge the denomination of origin "coffee of Columbia," which is currently beginning to offer a reasonable alternative to major chains of coffee shops. Last, in Jamaica, the Coffee Industry Board (CIB) is reporting that it has registered the Jamaica Blue Mountain and Jamaica High Mountain logos and trademarks in more than 20 countries worldwide. This trend for coffee origin denomination has started spreading across Central America following the establishment of the denomination "coffee of Veracruz" a few years ago.
This interest of the producers to protect their naming is a step to gain back that increasing fraction of the profits which is more and more eluding them. It is the complex and requiring process that their European colleagues, wine growers or olive growers for example, are well aware of.
A very simple fact that even the recent uplift of the international market cannot conceal: coffee, as well as the vast majority of agricultural products, has been suffering for over 30 years from the increase of the difference between what is paid to the local farmer and the price at which the product is finally sold to the consumer. Moreover, this trend has sped up relentlessly in the past few years: the increasing importance of major brands, the spread of espresso-type consumption, the use of pods, specialty coffees and even Fair Trade, all contribute towards leaving a greater fraction of the final retail price in the countries of importation, at a loss for the original producers.
Several objective technical elements can explain why less of the agricultural product cost is present in the goods sold to the consumer. Generally speaking, the soaring costs of packaging (i.e. pods) effects most modern products. The case of espresso, and the benefits it brings to the roaster, is more specific to coffee: all of a sudden, a roaster's role is not limited to selling coffee anymore, he also provides services such as machine overhaul. In consuming countries, only the distribution costs are sharply decreasing ... the number of merchants between the farmer and the coffee drinker had never been so limited!
Nevertheless, the chief cause of that price gap probably lays in the incredibly expensive marketing efforts--the added value that the brand brings to the product is so important, that it deserves millions of dollars expenditures. Even the "no logo" supporters ask for recognition signs such as organic or Fair Trade seals, and, incidentally, the recognition provider is always based in a northern country and a small part of the "recognized" product price goes back to the producer.
Hoping to create a new brand for each individual producer is obviously wishful thinking. Even for products with much greater added value such as olive oil and wine, this is a difficult and financially taxing process. However, what has been done in the case of the aforementioned products can be applied to coffee as well: the establishment of collective labels that will benefit a group of producers rather than an individual. This can be done either through the Trade Mark international legislation or along the more difficult path to a denomination of origin to the same effect. Moreover, it is clear that in countries with a culture that is strongly oriented towards gastronomy like the Mediterranean region, as well as those "old nations" such as Japan and China, a collective label which is attached to a specific geographical location will require much less advertisement and marketing than other commercial brands. This phenomenon arises from the widespread belief, be it real or culturally induced, that a great product is influenced by its origin. Indeed, because it is the product of civilizations, of centuries of work on the same land, these goods with a designation of origin bear a sort of nobility that no industrial creation could ever claim. Thus, even in the press, one will often see the review of some traditional product whereas nobody would write an article on a commercial product of industrial make.
An obvious question now springs to mind: why, if the solution is so obvious, do all producing countries not join in on it? Although a collective label may relatively easily succeed where the product is exported, it must first become a tangible reality within the production zone.
Of colonial origins, coffee is rarely directly associated with a specific region so that it has not become, like olives in Greece or cheese in France, a corner stone of popular culture and the exporting countries are often only modest consumers themselves. The fact that the first nations to look into this policy are Columbia, Ethiopia and Veracruz (Mexico) does not come as a surprise. Indeed, in Ethiopia, coffee is omnipresent and some rights are even based upon it. The coffee producing region of Manizales in Colombia or Xalapa in Mexico has managed to forge its own identity through customs, feasts and specific architectural styles, and its population of small producers remains firmly rooted in its traditions.
Even in the rare cases where this coffee-based tradition does exist, the challenge of setting up a coherent designation or label remains. In other words, the production needs to be sufficiently homogenous to be easily recognizable by the consumer and interchangeable between producers for this association to make sense. This is rendered more difficult in regions where vertical spread has more effect than horizontal, and where the choice of plant has often been made based on productivity arguments rather than on a quest for a product of quality. Maintaining homogeneity within the producing region would probably require extensive quality controls, maybe blended, and even perhaps roasted by the producers themselves.
For this to become a viable economic reality, the producers must be ready, with the help of their governments, to lead a demanding and autonomous policy within their region. Indeed, without sufficient production output, they will not be able to cope with the financial requirements for organization and advertising such a campaign. The denomination of origin only exists in reality if it comes up on the coffee sold to the consumer in Rome, Paris, or Tokyo. A strong organization is absolutely necessary in order to deal with the demands of the other links in the coffee chain whose best interests do not lie in letting part of their profits remain with the producers.
Wine in Europe has followed the reverse trend to that of coffee. The only great wines acknowledged as such were all of controlled origin. Today, however, they are challenged as equals by commercial makes, aggressively or symbiotically as Champagne producers have managed with great international corporations.
Let us wish that coffee producers can find their way to similar success, through strong regional associations and hopefully though nations' combined efforts, to show consumers across the world that coffee is also a noble regional product.
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|Title Annotation:||At Origin|
|Comment:||A denomination of origin for coffee: will it help?|
|Publication:||Tea & Coffee Trade Journal|
|Date:||May 1, 2009|
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