What Are Green Mountain Coffee Roasters’ Fair Trade Credentials?

On February 27, 2007, the International Development Committee of the UK Parliament House of Commons heard evidence from Starbucks senior officials and others on various public questions. (The transcript was posted here in four parts.)

Last week, I forwarded follow-up questions and request for interviews to Starbucks, TransFair USA, Green Mountain Coffee Roasters (GMCR), and others. Yesterday, after Part IV of the script was published, I received Starbucks’ agreement for an interview; therefore, I will present their views as soon as it is made available. I also expect a response from TransFair USA.

Meanwhile, as Starbucks’ major competitor that has agreed to recognize Ethiopia’s ownership of her coffee marks, it would be curious to know what the GMCR would have responded to the questions raised by the Members of Parliament had the company been given the opportunity to present its case. So I asked GMCR about their Fair Trade credentials and the company’s relationship and future plans to work with the Ethiopian farmers. The company’s prompt response, which I am grateful for, is posted below.

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Green Mountain Coffee Roasters' commitment to Fair Trade and our recent work to support the efforts of Ethiopian coffee farmers, are the result of a long-standing commitment to assist communities where we do business, both here in the U.S. and where we purchase our coffees. This commitment started shortly after we were founded in 1981 in a single retail store with a small coffee roaster in a small village in Vermont. At that time, we took simple acts, such as making coffee grounds available to our customers for composting and providing coffee to non-profit organizations for their fundraising efforts. In 1988 we started supporting the efforts of Coffee Kids, a non-profit organization that is working to improve the quality of life in coffee communities, primarily through microcredit programs. In 1990, we introduced the first oxygen-whitened coffee filters, to eliminate the use of elemental chlorine in the manufacturing process, which had significant environmental implications for the paper manufacturing process, and for the health of those who relied on rivers and streams nearby. Also in 1990 we introduced Rainforest Nut coffee, which is a flavored coffee. For many years, we contributed a total of 10% of the profit from this best-selling coffee to the Rainforest Alliance and Conservation International to support their important work.

In 1996 Green Mountain Coffee Roasters (GMCR) introduced its first organic coffee. Over the subsequent five years, the company expanded this line to over 20 certified organic offerings. In 2000, GMCR signed a licensing agreement with TransFair USA and launched its Fair Trade coffee program in September of that year. Our initial goal was to purchase and sell 3% of our coffees under Fair Trade terms that first year, and ultimately bring Fair Trade to mainstream outlets. Instead, we sold 6% the first year. Nearly all of our Fairtrade certified coffees are also organic certified. Today, approximately 50 of our 100 or so total coffee offerings are Fair Trade certified. The sales of this line is growing 2-3 times faster the sales of our conventional lines of coffees. In the fall of 2005, we were pleased to announce a collaboration with McDonalds Corp., placing Fair Trade and organic certified coffees roasted and packaged by GMCR in 658 McDonalds restaurants in the Northeastern region of the U.S.

A logical question might be, "Why has Green Mountain Coffee Roasters invested in Fair Trade and other initiatives for so long, and what does the company hope to accomplish through its investments in this area?" Early on in the company's life, we realized that our success was closely linked to the success of our coffee producing partners. As a specialty coffee roaster, we need a constant supply of consistently high quality coffee. To produce this coffee, coffee farmers and processors need a constant supply of resources to maintain both the quality of their coffee and the quality of life for their families and their communities. Over time, we have recognized the direct relationship between the quality of life in a given community and the quality of coffee the community is able to produce on a consistent basis. We have also realized that if any link in this supply chain is weak, from the individual farmer to GMCR, the entire chain is in jeopardy. Our interest in our partners is increasingly based on long term relationships through which we support their efforts to improve economic and social conditions; it is based on a vision of providing our partners with resources that they need to meet their needs, which in turn meet our own.

A few years ago, when the "coffee crisis" arrived, the wisdom of this approach became very apparent. During this time period, Oxfam America estimated that close to 600,000 coffee farmers in Lain America, facing historically low coffee prices, were forced to leave their coffee, their communities, and their families to seek alternative sources of income by migrating either to nearby urban centers or to the US. Also during this price crisis, we found that some of our most reliable producers of high quality specialty coffee were members of Fair Trade cooperatives. Unlike many of their neighbors, these farmers were able to stay on their farms, and invest in the quality of their coffee. We found that some of the highest quality coffees during this period (and since) arrived from Fair Trade cooperatives. This quality continues to be reaffirmed through the Cup of Excellence auctions.

In a 2005 impact report we received from TransFair USA, it was noted that our Fair Trade purchases were providing 136,601 people with a higher standard of living. This was very motivating to our employees.

Two years ago, GMCR reaffirmed its commitment to growing our Fair Trade coffee purchases and sales, by stating that in 2008, 35% of our purchases will be Fair Trade certified. While we have more work to do to reach this goal, last year our Fair Trade purchases represented approximately 27% of our total purchases.

All of this begs another question, "Is Fair Trade enough?" We believe that the growth of our organic/Fair Trade line of coffees is having a significant impact in the communities where it is grown, both economically, social, and environmentally. At this time however, over 70% of our purchases are not Fair Trade certified. Some of these purchases are made from fincas or estates that are not currently eligible for Fair Trade certification. Others are from cooperatives and mid-size farms that are not Fair Trade certified. We are reaching out to many of these producer organizations, as well as to some of our Fair Trade cooperatives, in offering support through other programs as well.

GMCR continues to support the work of Coffee Kids (www.coffeekids.org), which is providing economic alternatives to coffee growing families, so they are not entirely dependent on income from coffee, a product who's price is established thousands of miles away, over which producers have very little control. We also work closely with Grounds for Health, providing services for the early detection of cervical cancer in coffee communities in Latin America. GMCR also has developed a partnership with Heifer International to enhance both income and nutrition for coffee farming families in coffee growing communities.

Recently, GMCR signed a Letter of Intent with the Government of Ethiopia to support this country's efforts to bring better value to its coffee and better income to its coffee farmers and their families. The Letter of Intent states that GMCR will not oppose Ethiopia's applications for trademarks in the US. The document also states that GMCR is willing to continue to cooperate and support discussions concerning the establishment, development, and implementation of a program involving the use of the marks as well as efforts to further enhance the quality of the coffees that will be covered under the marks, and to discuss any other program both parties believe will bring pricing levels of Ethiopian coffee up to levels realized by similarly situated coffee growers offering premium specialty coffees. Green Mountain Coffee Roasters has also said that it seeks to increase its purchases of Ethiopian coffee, to ensure the sustainable growth of the specialty Ethiopian coffee market, and to pay increased prices for specialty Ethiopian coffee for the benefit of Ethiopian coffee farmers and their communities. We believe that this Letter of Intent is consistent with our desire to strengthen every link of the supply chain in which we work, to better meet the needs of our partners, of our customers, and of our company.