The coffee industry is worth almost €100 billion euro a year but it’s badly broken. In recent years a handful of ginormous multinationals have hijacked the supply chain to create a huge economic imbalance between coffee producing and consuming countries.
50% of green bean export is controlled by 6 major multinationals and 5 multinationals are responsible for roasting 70% of the world’s coffee. This means that while global demand for coffee has exploded coffee producing countries have seen little or none of this extra value.
Where once 47% of the value from your coffee would stay with coffee growers today just 15% goes back to the country of origin. In fact only 1-2% of what you pay for your coffee goes back to coffee farmers. Improvements in farming and bean quality have been offset as every opportunity to make money – roasting, distribution, streamlining operations and branding - has benefitted those in the West.
Take Ethiopia as an example. It’s Africa’s largest producer of coffee and home of the Arabica bean. One quarter of the population relies on coffee for their livelihood. That’s about 20m people. But the country’s biggest industry is still charity not coffee. Each year, Ethiopia pulls in almost €3 billion in International aid but earns just €750m from its coffee harvest.
FairChain is all about sharing more of the value created in producing countries with producing countries! In other words, helping the people who grow our coffee to enjoy a bigger chunk of the €4 we spend on our double shot cappuccinos. Its about cultivating a domestic coffee roasting industry in the belt. It’s about helping coffee growing countries like Ethiopia to start roasting, bagging, branding and selling their own coffee.
We’ve calculated that if Ethiopia did start to roast it’s own beans and export the finished product the country could triple it’s income to over 2.5 billion dollars a year and start to move beyond aid.
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