WHAT IS DIRECT TRADE COFFEE AND WHY SHOULD YOU CARE?
Direct trade suggests a more equitable coffee trading system, but does it really work without a regulatory body? Let’s explore.
True coffee lovers care about more than just the delicious flavors in the cup. You care about where your coffee comes from, the people who produce it, and the future of the coffee industry as a whole. After all, a sustainable coffee system benefits us all.
Where does direct trade fit in the pantheon of ethical coffee?
In this article, I’ll explain direct trade in the context of coffee, how it compares to fair trade coffee, and whether it’s worth seeking out when shopping for beans.
What Does Direct Trade Mean In Coffee?
The simplest definition of direct trade is that it’s when a roaster buys directly from a coffee producer, cutting out traditional middlemen like importers and exporters. However, because it is unregulated, its precise nature can vary in practice (1).
A promising approach for, at least, the specialty coffee sector is to foster direct relationships between growers and roasters.
Direct trade is an approach, not a certification. When you see a direct trade label on a coffee package, it doesn’t strictly mean there was no intermediary. Rather, it means that the roaster had some kind of direct communication with the coffee producer.
What Are The Benefits Of Direct Trade Coffee?
The definition may be simple, but the implications of the direct trade program are profound. From an ethical standpoint, the shorter supply chain of direct sourcing ensures that coffee producers get more money for their crops.
It also benefits the consumer by facilitating better coffee quality. When a direct trade roaster builds a relationship with a coffee producer, they become more involved with quality control. They often work with farmers to implement improved farming practices. In my experience reviewing coffee beans, I regularly see coffee from a particular farm improve year-over-year as the grower develops a longer-term relationship with a quality specialty coffee roaster.
Lastly, direct trade allows coffee to be more traceable – a key tenet of Third Wave coffee. Conscientious coffee consumers today want to know exactly where their coffee comes from, who grew it, and how it was processed. Direct trade coffees can typically be traced to a specific washing station or farm, sometimes even a specific lot from a given farm.
What Is The Difference Between Direct Trade And Fair Trade Coffee?
Direct trade and fair trade both strive to ensure better wages for coffee farmers, but they go about it in two distinct ways.
Fair trade is a coffee certification implemented by the non-profit organization Fairtrade International (2). All it does is set a minimum price the farmer must be compensated based on local salary norms. To be awarded a Fairtrade label, a coffee buyer must pay the producer the set fair trade price. It doesn’t set any regulations around coffee quality, environmental friendliness, or worker treatment.
Which Is Better, Fair Trade Or Direct Trade?
Every coffee-growing relationship is unique, but in general, direct trade seems to be a better model for sustainable coffee than the fair trade system. Fairtrade ensures that coffee producers are paid a fair price for their coffee, but that’s essentially where the benefits end. It doesn’t offer the extended advantages of a direct trade relationship.
In the fair trade certification model, farmers aren’t necessarily compensated more for higher-quality beans, giving them little incentive to improve practices. At the same time, coffee roasters don’t benefit from a direct relationship that allows them more of a say in the coffee they source and roast.
Roasters who trade directly with growers also tend to have far better product knowledge – a win for baristas and home coffee consumers.
The direct trade price paid to a coffee grower for green coffee tends to be higher than fair trade minimums. This is partly because it avoids middlemen, including the certifying body. It is also because when coffee roasters and producers work in concert, they produce better beans that warrant higher prices.
Final Thoughts
What is direct trade coffee? The direct trade model is a concept rather than a regulated procedure. The idea is to foster a direct relationship between coffee roasters and producers – to the advantage of both.
Direct trade builds on the ideas of fair trade standards by ensuring higher wages for producers, but it also benefits roasters and consumers by incentivizing higher-quality coffee beans. While the system undoubtedly has room for improvement, it is currently one of the best models for a sustainable world coffee market.
FAQs
It is difficult to designate a company as “most ethical,” given that everyone has their own ethical priorities. My suggestion is to look for sustainable coffee brands – Driftaway Coffee is a great example – that are very transparent with their buying practices. You can also look for certifications like Fair Trade, Organic coffee, Rainforest Alliance, Bird-Friendly, and B-Corp, all of which prioritize different ethical practices.
The main negatives of the coffee industry are environmental degradation and unfair treatment or exploitation of workers (3). However, neither of these conditions is mandatory. Coffee can be grown sustainably; it simply costs more money. And those of us who love coffee should be willing to front those costs.
Third Wave coffee doesn’t have a specific definition, but it is a modern movement toward higher-quality coffee (4). It extends throughout the coffee supply chain, from the coffee farm to the coffee shop or home consumer. Key concepts in Third Wave coffee culture include direct trade, lighter roasting, traceability, sustainability, and greater care with brewing methods.
References
- Prasad, R. (2019, July 11). How the 2019 coffee crisis might affect you. Retrieved from https://www.bbc.com/news/world-us-canada-48631129
- Fairtrade International. (2024). https://www.fairtrade.net/
- Myers, AJ. (2015, August 31). The dark side of coffee: an unequal social and environmental exchange. Retrieved from https://theconversation.com/the-dark-side-of-coffee-an-unequal-social-and-environmental-exchange-46838
- Guevara, J. (2017, April 10). What Is “Third Wave Coffee”, & How Is It Different to Specialty? Retrieved from https://perfectdailygrind.com/2017/04/what-is-third-wave-coffee-how-is-it-different-to-specialty/
