September 29, 2005

Klatsch Warfare

by peterb

One of the items in last Friday's snarky list of one-liners was: '"Fair Trade" coffee means that I pay more for the coffee beans, but then to make up for it they taste like crap.' This (partly) inspired fair-trade coffee fan Green LA Girl (there's only one?) to write a couple of articles on fair trade vs. taste, including an interesting conversation with a company that buys a lot of fair trade coffee, but has not bothered to seek certification themselves.

The summary of the point of view of the coffee company was essentially "the desire for fair trade does not trump our duty to provide quality coffee." I thought it was an interesting read, and I wanted to elaborate on this a little.

"Fair trade" coffee is doomed, as long as the business model is for it to be marketed directly at the individual coffee buyer.

"Fair Trade", as currently envisioned and marketed, concentrates solely on the value provided to the supplier rather than on that provided to the consumer. As long as this is true, it will remain little more than a sad footnote in the history of commerce. If the primary message behind the marketing of a product is "buy this because of a moral imperative," rather than "buy this because it tastes better" or "buy this because it's cheaper," that product is doomed.

Consider the organic movement. Those of us who buy organic milk don't spend twice as much on it than we do on non-organic milk because we think organic farmers are somehow more deserving than the non-organic cooperatives in, say, Vermont. We spend twice as much on it because, rightly or wrongly, we have been convinced that it tastes better and is better for us. Whereas fair trade coffee is marketed solely on the basis of where the money goes rather than on the basis of what the product is. That's a losing proposition.

Not only don't I particularly care where my money goes when I buy a cup of coffee, but even asking me to think about it is demanding far too much of me, especially before I've had my first cup of coffee of the day. It's a cup of coffee. This is not exactly a high-ticket item: it's not a car, or a house, or a major investment in a mutual fund. Fair trade coffee as marketed to the consumer is doomed to eternal marginalization, fundamentally, because it is asking the consumer to evaluate a nonsequiteur when making a trivial purchase. Merely having to think about where the money goes on a cup-by-cup basis increases the transaction cost on the part of the consumer. Consumers will respond by telling you, with their dollars, that they don't care.

The way I see it, there are exactly two ways for fair trade coffee to make inroads among anyone other than people who don't actually care about how their coffee tastes:

(1) Have "fair trade" also imply a guarantee of some minimal standard of taste and quality, in which case the consumer may actually care. Some people will point out that this isn't the "purpose" of "fair trade." So what? The "purpose" of Whole Foods is to make money, yet somehow they manage to convey the idea that they have other corporate goals as well. Alternatively...

(2) Market fair trade at the corporate level. If your fair trade coffee isn't going to taste better then the average consumer won't care at all. But you might convince a coffee shop that they care, because they can then pass that on to the consumer: "Hey, we only sell fair trade coffees, and here are the ones we recommend." This increases the impact of the transaction on the fair-traders, and simultaneously eliminates the psychic transaction cost to the consumer of choosing between fair-trade coffee that tastes ok or non-fair-trade coffee that tastes better. All the consumer has to decide is whether she or he likes the coffee shop.

Now, I can already hear the protests: "but there is fair trade coffee that is just as good as non-fair-trade coffee, at the same price!" To which the only reply is: poppycock. If fair trade coffee was as good as non-fair-trade coffee at the same price, then coffee shops would have to be insane to sell anything else.

We can analogize this to the decaf coffee market. Yes, caffeine is a flavor component of real coffee. Removing the caffeine changes the taste subtly. But the fact is that most decaf coffee tastes much worse than it needs to. Why? Because all decaffeination processes cost money. The good processes cost more. And consumers have demonstrated that they are unwilling to pay more for a cup of decaf coffee than for a cup of regular coffee. The nearly universal solution chosen by coffee roasters and packages is to use cheaper, lower quality beans for their decaf products, and present a lower quality (but "same customer price") product to the customer. I have seen no argument that convincingly explains why this same dynamic won't affect "fair-trade" coffee as well.

Another interesting analogy here, of course, is to vegan food, which is a phenomenon marketed solely at people who don't care if their food tastes good. There seems to be just enough of these people to make the market viable, with a number of firms competing for their dollars. But each vegan consumes much more food per capita than a coffee drinker drinks coffee. Are there enough people who are willing to purchase coffee solely on the basis of where the money goes to meet the needs of the business model?

For the sake of small coffee growers, I hope so. But as a consumer of the product, I suspect not.

Posted by peterb at September 29, 2005 08:47 PM | Bookmark This

OK -- that's SO NOT True about vegans! And this is coming from a nonvegan. Yes, there are some vegans who're not foodies, but by and large, they are! check out Vegan Lunch Box (veganlunchbox dot blogspot dot com>, for example. Of course, it's a lil tough to prove that it actually tastes good from a picture...

Anyway, back to coffee -- I can agree that getting coffee stores on board is a big part of the movement, but I guess I feel like the strides made in fair trade so far have been at the grassroots level with individual consumers. Fair trade label recognition is at 50% in the UK -- and I'd venture to say that -- if it hadn't been for consumer demand -- Tea Leaves would not care enough to be posting about it either -- no?

And your summary's rather off, in my view -- though perhaps that's due to my own writing? :o Ric of Groundwork does sell a lot of fair trade coffee certified on the farmer's end -- some of his best tasting coffee, in his words. It's not an either or issue. He just felt that quality should be one of the criterion for certification -- that ALL certified coffee should meet a certain quality -- which some may agree with.

My question about improving quality for FT coffee to make it more attractive to consumers would be -- If consumers care so much about quality, how do we explain all the Folgers and Yuban buyers? For some, price is obviously THE deciding factor -- and in general, grosser=cheaper -- fair trade certified or not --

Posted by green LA girl at October 1, 2005 01:18 PM

One of the easy ways to explain the Folgers and Yuban buyers (in addition to the continued presence of massive drip pots) is simply inertia - people are used to Folgers and to bad coffee preparation. God knows, I didn't actually enjoy a cup of coffee until I was 23, because my definition of a cup of coffee was the burned drip-pot produced Folgers swill my parents drank. My father is addicted to gas station coffee.

Posted by Mike Collins at October 2, 2005 12:59 PM

As you guys already think I'm morally defective, perhaps it will not surprise you to hear that how much the supplier got paid for some good that I'm purchasing matters absolutely zilch to me. I'm wholly mystified by the impulse to pay extra for literally no benefit. Why not just give to charity? Why build charity into your coffee purchase? And if you did, would this be the charity you felt it most important to support?

I live in the UK (where fair trade labels are all over wine also) -- I'm aware of the label, and I treat it, just as peterb suggests, as a sign of reduced quality at the price. Something not to be embraced but avoided! Actually, contra peterb, I am also suspicious of organic goods for exactly the same reason -- and try to avoid buying them whenever possible.

Posted by daw at October 14, 2005 06:44 AM

The fair trade wine is a new one on me. For what it's worth, I can assure you that no Kiwis were exploited to bring you that sauvignon blanc. Although God knows I worry about German vintners - it keeps me awake most nights.

So to what does this fair trade wine apply? I can see Argentina possibly, or Chile maybe. But the lot of the vineyard workers there is generally better than that of other agricultural workers. The same applies to the USA (for wine grapes). In South Africa the vineyard workers ARE exploited, but no worse than anyone else.

To me the problem with "fair trade" stuff is that it is a teensy tiny self-congratulatory patch on the problems of globalism. I know, I know, longest journey - single step, act locally etc etc. But still.

Posted by WCE at October 14, 2005 08:21 AM

Yeah -- Even as a fair trade advocate, I have to admit that at times, I'm very disappointed at the limited reach of the fair trade movement.

But hey, like you said, WCE -- it's a step -- in the right direction...

Posted by green LA girl at October 30, 2005 01:31 AM

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