SCTA Gala & Forum attendees discuss need for co-responsibility in tackling trade issues
Industry leaders explained that a collaborative effort is needed to help the industry battle its current challenges at the 7th SCTA Forum & Gala Dinner. The event took place in Geneva, Switzerland on 6-7 October and for the first time featured a networking forum allowing participants to exchange opinions among one another.
The first panel session looked at the future of coffee trading with CEOs from major trading houses. According to Vivek Verma, managing director and CEO of coffee at Olam over the last decade coffee consumption has grown by 2.5 percent and an estimated 190 million bags will be consumed in the next ten years.
However, supply-side challenges including yield growth, climate change and labour shortages are proving to be stumbling blocks. Supply chains need to become more efficient, reliable and sustainable, therefore “the focus on sustainability needs to increase if we as a coffee trade want to solve the challenges along the supply chain,” Verma said.
In an attempt to better the supply chain, Alain Poncelet, CEO of coffee and cocoa at Ecom believes merchants needs to begin taking risks to create a more sustainable chain. “The evolution is for merchants to move away from being traders extracting value from the supply chain, and instead becoming supply chain managers adding value to the chain,” he explained.The second panel discussed climate change, one of the most prominent and important issues within the industry. Aaron Davis, senior research leader at the Royal Botanic Gardens, said, “Climate change is inevitable yet manageable. We are able to make good estimates and look at the past—we have said for a very long time that it is coming. It is not only here but has been happening for many decades.”
Initiatives such as the PurProject have been developed to aid farmers and enable them to better adapt to the more frequent weather changes. The project works on agroforestry programmes by planting trees within coffee plots to improve the production yields and coffee quality, whilst reducing agricultural pressures on the forest.
Founder Tristan Lecomte, commented, “Trees bring in organic matter to the soil and ensure productivity, the roots of the trees help water infiltrate and become replenished, without the trees the water cycle is broken.” He said forests can never be destroyed by pests and diseases as they are too diverse, noting “trees are the best possible investment for farmers.”
The question of finance was one that lingered over most topics, but none more so than the urgent need to expand coffee varieties. In response to this, Ross Colbert, managing director global sector head and beverage at Rabobank International explained, “I’m really encouraged by what I’m hearing, the coffee industry is being very proactive.
“It’s about managing risk and understanding long and short term issues which enables us to make better informed credit decisions,” he said. “We believe strongly in collaborative efforts with tangible results, the instant reaction is to throw money at something whilst I think it is important for us to see basic actions.”
Lastly, the role of the consumer in helping tackle climate change was one suggested by senior vp/managing director at Keurig Trading, Lindsey Bolger. “Meeting the consumer half way is our responsibility, meet them at their cup with quality and the consumer will reward us by buying brands. We take the same position on responsible sourcing, this is the common denominator that all of our sourcing practices need to follow,” she concluded.