The business case for sustainability
Chameleon Coffee has partnered with Anacafe in Guatemala on a programme that focuses on the health of farmer families. Image: Chameleon Coffee
Implementing sustainable initiatives throughout the coffee and tea supply chains is not only good for the environment, the people and the product, it is simply good business. By Anne-Marie Hardie
Sustainable practices and profitability, factors that were once perceived to be in conflict, are now recognised as being harmonious. Investing in origin, including paying higher wages and environmental initiatives, has improved the quality and yield in both the tea and coffee industries. At the same time, consumers are actively seeking and embracing companies that are doing better, providing external motivation for companies to act and communicate these initiatives to their market.
“The market research says that younger consumers are expecting sustainable practices, and as a business, you have to respond to that expectation especially because they have legitimate concerns,” said Jason Walker, Firsd Tea North America, Lyndhurst, New Jersey. “So, there is the loyalty aspect of having a sustainable brand, but there is also a profit side to it. There can be significant savings when things are done more efficiently, including a reduction or even elimination in pesticide use, and the integration of more efficient technologies.”
Firsd Tea’s parent company, Zhejiang Tea Group, based in Zhejiang Province, China, applied its knowledge of best practices when it expanded operations to the West of China. This included applying research on light and pheromone traps to reduce pesticide application and donating 15 million tea cuttings to support the new smallholder farms in Western China. Applying these best practices to these new farms, decreased the company’s environmental impact while increasing yield, and in turn, profitability.
Consumers and business partners are increasingly more cognisant of the values that companies embody. As a result, there is an expectation for companies to do better, whether itisenvironmentally, socially, or ethically.
“There is a growing level of interest in knowing whether you are buying something valuable for society, compared to a decade ago where no one was really asking those questions,” said Elisa Criscione, founder and CEO, Digital Coffee Future. “I do believe that this interest is expanding on a worldwide level. However, communicating sustainability values has become increasingly more challenging as sustainable initiatives expand beyond philanthropic activities and certifications.” Being authentic and transparent about business practices, shared Criscione, is vital in helping provide clarity to the consumer and aid in their decision-making process. The integration of digitisation throughout the supply chain is one strategy that can help provide consumers, and partners in the supply chain, with that transparency.
“Today, more than ever, our consumers are demanding sustainable options, not just in coffee, but across the total CPG market. It’s important to stay the course and ensure that our brands are communicating our commitments in transparent, honest, and authentic ways to make that connection with our consumer,” said Matt Swenson, director of coffee, Nestlé Coffee Partners. “This looks different in practice across our portfolio as each of our brands has its own unique consumer base and differing expectations and desires for engagement on sustainability. We will always try to honour the reasons consumers choose our brands and continue to evolve with them.”
Based out of Oakville, Ontario, Reunion Coffee has been actively involved in sustainability initiatives for the past 16 years. “We’ve tried to be a part of redefining what sustainability in coffee is, including adopting a more holistic approach,” said Adam Pesce, president, Reunion Coffee. Nine years ago, Reunion Coffee became B Corp certified; since then, the business has doubled, and sustainability played a significant role in that growth. “When I first became involved in the business, I thought that growth would mean that I was a sell-out; but I’ve discovered that it actually means more impact,” said Pesce. “Because of the nature of our business model, the more we grow, the bigger the impact that we have; it kind of puts sustainability on autopilot.”By placing sustainability in the blueprint of their business, Reunion Coffee has discovered that growth, translates to an increase in positive actions, including more land being set aside for conservation and more employees being treated equitably.
“Sustainability has become table stakes; it is no longer a nice thing that some companies do; it’s become a necessary thing that all companies have to do,” said Pesce. “It has opened a lot of doors for us because we are committed to sustainable practices, but you have to pay attention to the quality, or the sustainability piece will fall apart.”
Traditional Medicinals, Sebastopol, California, invested in B Corp certification to aid with transparency and accurately track their sustainability aspirations against their progress and challenges. These sustainability initiatives have also helped protect its supply chain. “To continue providing accessible botanical wellness, we need to maintain a supply of high-quality herbs. This requires investing in the ecosystems where these plants thrive—and the people that steward them,” said Jamie Horst, chief purpose officer, Traditional Medicinals. In this last year, their production facility became Zero Waste certified and are in the process of launching their first compostable overwrap. “There is no specific point where we will have done enough,” said Horst. “Our goal is to invite our consumers and stakeholders on a journey with us, maintaining transparency about what worked and what didn’t.”
The transition to sustainable practices
“To implement sustainable practices, the first step is surprisingly inward, the company has to look within and consider if its genuinely ready to implement sustainable values throughout its organisation,” said Robert Bird, professor of business law and Eversource Energy Chair in Business Ethics, University of Connecticut, Mansfield, Connecticut. “If companies do not authentically believe in the values of sustainability, they will not be able to optimise the return on the business case. “Adopting the sustainability mindset requires accepting that the results will not be immediate and that there is always more that can be done.
“It’s an ideology, you are continually thinking can I get closer to zero, knowing that you will most likely never get there,” said Noah Bleich, CEO, The Tea Book, Los Angeles, California “But for us, it was about changing our mindset from being perfect, to continually try to be just a little bit better.” One shift that he implemented was adding the concepts of rot and rethink to the traditional three ‘Rs’: reduce, reuse and recycle pyramid. “The first step to rethinking is that you need to think you’re wrong, because if you think you’re right, you will go back to your old ways.” Bleich emphasised that this mindset shift could aid businesses in adopting solutions that are centred on sustainability, instead of performance and profit.
Blue Coffee Box, Canterbury, England, is an ethical coffee subscription that uses direct trade to source quality coffee for its subscribers. When developing a packaging to ship their coffee, Blue Coffee Box wanted to ensure that it was fully compostable. During their research, co-founder Jon Butt, discovered that the bag was not readily available in the market, so they developed their own. “In the end, we found all of the components, the lining, the ziplock, the valve, and then we arranged to have it all put together by a manufacturer to create a fully compostable coffee bag,” he said.
Integrating the principles of sustainability into the blueprint of a business lends itself to a holistic approach to business, one that considers the entire supply chain. Conversely, failing to have these practices may result in both parties getting want they want out of the relationship and moving on. “Sustainability creates a stickiness to their relationship because now the relationship is not only instrumental, based on revenue, but intrinsic, based on values,” said Bird.
Native Root Coffee developed with the goal of rectifying the wage struggle that existed for indigenous small holder farmers in rural Colombia. Founder Ervin Liz, a third-generation native farmer, witnessed farmers in his community, including his parents, leave coffee due to it being unsustainable. The creation of Native Root Coffee helped resolve some of these challenges by paying the farmers 10 to 15 per cent above market value. The company is also actively engaged in the sustainability conversation, using social media to connect with their consumers.
“There are so many other ways to keep your business growing long-term than just the environmental sustainability,” said Braden Mosley, brand strategist, Native Root Coffee. “At the root of coffee, there is a lot of human connection, so that is something that we are trying to focus on and bring back to coffee.”
Nestlé remains focused on climate change and its impact on coffee farming, continuously seeking strategic partnerships with their supply chain to ensure that the industry is not just successful today, but the next ten to twenty years. This year is the third year, for the Chameleon Coffee Community and Anacafé partner programme in Guatemala, which is centred around the health of farmer families, including distributing clean drinking water filters, drip irrigation systems for organic gardens and education on food safety. “We’ve also funded educational farm plots to share agricultural best practices and distribution of climate adaptive varieties,” said Swenson. “We’ve already seen double-digit production volume increases on a percentage basis from the partners that are engaged in this programme.”
The integration of sustainability requires collaboration, including recognising that value of each component on the supply chain. Roaster, Luis Fernando Velez of Amor Perfecto in Bogotá, Colombia, emphasised the importance of shifting the relationship between buyers and producers to one that is a partnership. “We as roasters, need to recognise that we are not coming to the farm to help out poor people. Coffee growers are our partners, and providing that level of respect, which includes paying the farmer for their investment and labour, is how you cultivate sustainability.” Sustainability, according to Velez, must begin with the price of coffee. “As long as you have a good price, then you can start to work on all of the other projects, organic farming, certifications, water conservation, biodiversity.”
- Anne-Marie Hardie is a freelance writer, professor and speaker based in Barrie, Ontario. She may be reached at: [email protected].