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Activist calls for 'real shared value' from coffee corporations

By Lynda Searby , 14-May-2015
Last updated on 14-May-2015 at 16:07 GMT2015-05-14T16:07:55Z

Activist calls for 'real shared value' from coffee corporations

Entrepreneur, journalist, political consultant and campaigner Fernando Morales-de la Cruz is launching a coffee capsule brand he hopes will accelerate the eradication of poverty among coffee farmers by reinvesting 10 cents for every cup sold back into the coffee producing regions.

The dot.com venture, Café for Change, will be financed by a crowd funding campaign which calls on coffee lovers to “change and disrupt the coffee industry, Morales-de la Cruz told BeverageDaily.com.

He confirmed the plan was to start selling the capsules online to consumers in 20 European Union (EU) countries, Switzerland, the USA and Canada, by September.

Morales-de la Cruz hopes Café for Change will raise consumer awareness of how little coffee farmers are currently being paid, exerting pressure on the major coffee companies to change the way they structure their pricing.

“If companies are selling coffee at €70 per kg no-one in the supply chain should be starving. There is enough margin to eradicate the poverty of these suppliers. I’m advocating something simple: tell the consumer how many cents per cup are paid to the coffee farmer,” he said.

Shared value rhetoric and reality

At the Shared Value Initiative Summit in New York yesterday, Nespresso CEO Jean-Marc Duvoisin told delegates Nespresso was already paying its coffee farmers 30-40% higher than the market value.

But according to Morales-de la Cruz, this isn't enough if Nespresso’s coffee partners are to be treated as partners rather than 21st century slaves.

“30% isn't lifting their producers out of poverty. It isn't even enough to provide a living wage. Until every girl goes to high school we haven’t solved this problem,said Morales-de la Cruz.

Duvoisin told delegates about Nespresso’s AAA sustainable quality program, which he said “helps farmers produce more, better quality coffee, and get a better price for it.

“We have 63,000 farmers, and the AAA program helps to improve their standard of living, their income and their yields. This is how creating shared value is embedded in our business model, he explained.

He gave examples of how Nespresso, through forging relationships with its farmers, was able to take direct measures to improve their situations.

In Colombia, for example, where there is an issue with ageing farmers who cannot retire, Nespresso, together with the Ministry of Agriculture, had developed a saving scheme, he said.

“We now have 900 farmers with what is effectively a pension plan, allowing them to retire and their children to take over the farms,” said Duvoisin.

However, Morales-de la Cruz believes such programs are merely paying lip service to the idea of shared value.

Fernando Morales-de la Cruz.

“If you are sharing less than 3 cents of a Nespresso capsule you are not sharing enough. You will not bring running water to a community in ten years, not in a generation, he said.

He accused the big coffee manufacturers of a lack of transparency in disclosing exactly how much of their profit margin they are ‘sharing’.

“What is fundamental is that when we talk about shared value, we talk about how much we are sharing. When Nespresso talk about shared value, I want to know what value they are sharing,he said.

Fairtrade flawed

He also criticized Fairtrade certification for being too lightweight as a means of tackling poverty in coffee producing regions.

“Fairtrade is not enough for me. My measure is eradication of poverty in one generation. The present goal of Fairtrade is alleviation of poverty. This problem should not take 15 years to solve in an industry with a retail value of $175bn.

“If 20 of the most influential people in the coffee industry sat round a table and agreed to pay 10 cents per capsule to producers, this issue could be solved in 10 years. With just half of those people round the table, and with consumer support, it could be solved in 10 years.

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