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  • QA 240
    Question:
    Is it advisable to concentrate on one particular client model only?
    Background:

    Are cooperative members at risk if their only sales target is marketing to Fairtrade partner companies? Would this not exclude them from also developing relations with conventional trade partners? In other words, should producers perhaps rather see Fairtrade as a stepping-stone towards wider market entry and more independence?

    Asked by:
    Grower - Ethiopia
     
    Answer:

    In general terms it is always advisable to aim for a certain amount of diversification amongst one’s clients. For example…

    1. Relying on one or two buyers only always brings the risk of being left with insufficient sales opportunities when one or the other terminates the relationship, goes out of business or simply loses interest.

    2. A buyer may not necessarily be interested in all the certified coffee one produces, both in terms of quality and of quantity. It is opportune to note here that approximately 8% of total 2009 world exports were certified coffees. Whilst demand is growing, in most if not all instances the total supply of the different certified coffees exceeds the actual demand.

    3. Having no conventional business partners at all risks being unaware of how the conventional market operates and what it demands. What will happen if one’s situation were to change?

    From our perspective, in as far as possible one should always try to be aware of all major market segments. For the time being the vast majority of consumers do not actively pursue the purchase of certified coffees – they are happy to buy conventional or mainstream coffee as long as they are reasonably satisfied that such coffee was produced under decent conditions. For example, no child labour is used, no prohibited chemicals are applied, and so on. For this they rely on the coffee industry (the large or mainstream roasters) to verify that such unacceptable practices are not condoned - in this respect see for example www.4C-coffeeassociation.org. The 4C Association works with a verification scheme that provides just this kind of assurance.

    In our view being associated with one or another standard (Fairtrade, Rain Forest Alliance, Utz Certified, Organic, 4C etc) is always a plus in that it assures existing and potential clients that their counterparts are serious and understand what can and what cannot be done. Over time there will be more insistence for producers and exporters to commit to at least an entry standard such as provided by the 4C Association that is itself a mainstream initiative.

    Posted 21 September 2010

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