The Fairtrade Asia Coffee Webinar successfully concluded on 5th June with around 90 attendees from different coffee organisations across the globe. The theme of the webinar ‘Effect of COVID-19 on Fairtrade Supply chain across Asia and Way Forward’ was adequately met through an in-depth insight provided on the Impact of COVID 19 and the changing scenario across the Fairtrade supply and demand side by Fairtrade NAPP, Fairtrade International, Fairtrade America and Producers from Indonesia, Vietnam, and India.
Sanjeet Singh Khurana, COO Fairtrade NAPP highlighted the production challenges faced by producers in the Asia Pacific region and how the people at the bottom of the food pyramid, especially the migrant workers are most affected. While the Govt prepares to reopen the economy, the population is struggling to balance between food and health security. NAPP along with Fairtrade International have also come up with a Relief and Resilient fund for emergency support and for rebuilding the resilience of the affected farming communities. Peter Kettler, Senior Coffee Manager of Fairtrade International laid emphasis on what does sustainability looks like in an uncertain world. The current supply challenges coupled with the uncertainty of trade, job-losses, and decrease in out of home sales contributed to a change in the way consumers look at sustainability. He mentioned Fairtrade has provided increased flexibility in the spending of Fairtrade premium to support its producers along with the launch of a general COVID-19 Fund to help them mitigate the short term and long-term impacts of COVID-19.
On the market front Isabella Pacheco, Business Development Manager Lead for Coffee- Fairtrade America, presented that the total sales volume for FT coffee in 2019 had increased by 19% as compared to 2018. Though the NFO aims to maintain an aggregate of the same volume in 2020, the pandemic certainly posed a challenge in the sales front, but they remain positive for the situation to improve. Specialty conventional coffee showed the maximum demand accounting to approx. 99.7% of the total sales volume as compared to instant or organic coffee. To speak on the on-ground challenges the webinar had 03 speakers representing the key coffee-producing countries in Asia:- Armiyadi Bin Zet Mansur, Secretary of Koperasi Baitul Qiradh Baburrayyan from Indonesia, Bijumon Kurien, President-Manarcadu Social Service Society from India and Pham Thi Huyen Anh, Director-Po Ko Fair Agricultural Service Cooperative from Vietnam. The challenges highlighted by the SPOs were postponement of contracts by their buyers, limited or no new sales contracts, built up of stocks in the warehouse, decrease of coffee prices, and uncertainty of trade and pricing in the upcoming months. The co-ops spoke on how the impact had affected the livelihoods of the farmers. To mitigate the risk the SPOs have implemented various short and long-term initiatives to support its farming communities through Fairtrade premium support.
Learnings and Way Forward!
The webinar proved to be an effective forum in bringing together various perspectives from different Fairtrade partners involved in the coffee supply chain. It helped in the exchange of vital information from the field to market and vice- versa. The discussion proved fruitful in setting apart the expectations in terms of sales and businesses v/s the existing reality owing to the current situation world-wide.
- The impact of COVID 19 is felt across the globe by the wider coffee community and everyone in the supply chain is equally affected. Develop empathy for all the actors involved in the supply and demand chain.
- The rise in unemployment, decrease in out of home sales, lack of capital and other challenges faced by consumers and businesses in the Global North have led to a change in their buying and consumption pattern with a focus on supporting the local sustainability (immediate families and surrounding communities).
- Businesses worldwide are adapting quickly to new tools, technologies, and ways of driving their businesses. The quicker our producer and businesses respond to these changes, the easier it will be for them to recover from the impact in the long term.
- At-home brewing practices and consumption of high-quality coffee could create an opportunity for sales of Fairtrade certified coffee. Increased Relationship between brands and retailers, traders and local roasters and cafes are some of the long-term opportunities.
- Due to restrictions in international exports and uncertainty in trade, coffee producers in the global south should explore more on driving South to South trade initiatives , research and develop coffee products for domestic sales as per the preference of local consumers in Asia and Pacific, invest in innovative digital technologies and smart Agri-techniques to improve productivity and for climate change mitigation, use digital marketing tools and e-commerce platform to sell products online, and maintain a good relationship with their buyers, local traders, and retailers.
- Effective utilisation of Fairtrade Premium fund and COVID 19 Relief Fund for developing Short term Risk mitigation Plan: – to rebuild and strengthen the resilience of farming communities, to ensure the health and wellbeing of farmers and workers are well protected.
- Long term Risk Mitigation Plan by cooperatives to save more and spend less, to aim for food self-sufficiency and invest in intercropping and rearing live stocks, etc for generating an additional source of income, join Business Immunity and Marketing Projects of Govts and policies to find more buyers and access new markets, and strengthen the resilience of SPOs by building the capacity of its members.
- The pandemic has led to an uptake on empathy and communities coming together in a co-joined effort to fight the challenges in the global north, which also translates to local companies and coffee-producing communities in the global south.
Given the current scenario, it would be safe to conclude that there is no single way approach to address multiple challenges encountered by various partners along the supply chain. Further analysis can be provided on the basis of surveys to be conducted with our respective traders and buyers. We as a part of the Fairtrade system need to come up with a collaborative approach to create an awareness to our traders and consumers on the impact of the current situation on the producers, and communicate more in terms of supporting farmer families and farming communities rather than an individual farmer.
The key topic of discussion during the Q and A were: –
- Strategy for South to south marketing for driving the local sales in the domestic market:
Bijumon Kurien: Since the current exports for producers are severely affected, we need to find a branding for the Asian market and an alternate pricing system that can be offered to the consumers in the global south since the pricing offered to global north will likely not work for consumers in the south. Digital marketing, Pricing, and Product strategy would play an important role in driving the domestic market.
- Thought on precision farming and smart agriculture as one of the adaptive measures.
Sanjeet Singh Khurana: The most important tool for precision farming and smart agriculture would be the usage of digital technology through which farmers can increase their communication, anticipate, and adapt to climate changes, farm geo-tagging, sensors for crop monitoring. These analytical tools are used to make agriculture more effective and in handling agriculture operations and for risk mitigation. The way forward for sustainability would be to find a balance between commercial farming and responsible farming.
- Estimated volume of FT coffee sold in the US from the Asia Region.
Isabella Pacheco: The main coffee origin as mentioned for the US market is Vietnam and Indonesia. Demand from Indonesia is mainly for Specialty coffee.
Peter Kettler: There are many factors influencing the coffee trade world-wide. In Indonesia, Star bucks have closed 1000 stores in the last 02 months. Of recent the differential in the pricing of Fairtrade organic Sumatra has decreased to approx. 4000 /ton.
Short term Policy and Fairtrade programs to support coffee producers.
Peter Kettler: Fairtrade has established the Relief and Resilient fund to support the producers in the short-term impacts. Since the current situation has impacted the coffee community worldwide starting from buyers to producers, it is difficult to come up with a single solution to address the same. Fairtrade International and GPM will be conducting a survey with roasters and retailers to create an analysis of the effect of COVID 19 on their businesses, buying decisions, demand from customers, and the increased risk in purchasing certified coffee going forward.
The participants opined that such webinars were the immediate need for other key products from the region as well.
We thank all the attendees and speakers for their time and effort in making the webinar a great success. Stay connected to know about our upcoming monthly webinars for other products!