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  • Certification and marketability in coffee

     
     

    Over time certification has become an almost indispensable marketing tool for many agricultural products, particularly perishables such as fruit and vegetables. The Flower label required on principle by many western retail chains for imported fruit and vegetables is a good example.

    However, these are products that are sold directly to the end-consumer, i.e. they are not transformed, and as such certification in fact ensures market access. This is so because labelling proves to the end-user that producers subscribe to good agricultural and management practices; protect the environment; practice safe pesticide use; and engage in resource protection generally. Thus, the product is accepted as both safe and environmentally friendly. For coffee the situation is rather different because coffee growers in the main provide green coffee to overseas roasters who in turn produce and retail the finished product. Therefore, in most instances the identity of the producing countries, let alone the individual producer, is not known to the end-user. Consequently there is much less consumer awareness of the production process and whether certification (or verification) by itself enhances a coffee's marketability, is therefore a pertinent question.

    In the coffee industry certification schemes also guarantee, through a certificate, that specific rules and regulations of voluntary standards are met. On-pack labels then make this known to the end-user on the producer's behalf and, often, the end-user is expected to pay a premium to recompense the grower for this specific effort.*

    To note here that the scope for premium priced coffee, purely based on quality, is in theory unlimited because it has direct and universal appeal to many more end-users. The market for quality or specialty (gourmet) coffee is increasing constantly, i.e. this market segment is demand driven and is showing strong growth.

    But, the scope for premium prices, based on certification rather than on quality, is limited because of demand reasons. This is so because for many if not a majority of end-users the intrinsic quality of a product is of more importance than is certified compliance with a code of conduct or standard. Therefore, the potential for certified coffees that require to be sold at a premium mostly lies in niche markets.  However, the supply of such coffees is not necessarily always demand driven and over time some may be subject to oversupply. And so, whilst certification definitely adds to a coffee's image and may enhance its value, in the longer term certification by itself (so without the 'quality') is no guarantee for premium prices. But it can add to a coffee's marketability…

    *Verification similarly ensures that certain agreed criteria and practices are met, but does not use certificates or on-pack claims to market this to the end-user. Typically a mainstream market tool that offers market access rather than premia, verification is meant to improve efficiency, sustainability and profitability for growers on the one hand, whilst enabling buyers to make more informed decisions on the produce they purchase and process. To note here that, currently, the mainstream market accounts for between 85 and 90% of all green coffee exported from producing countries. Over time, it may be expected that buyers of mainstream coffee will increasingly insist on certain guarantees as regards the manner in which the coffee they buy is produced, perhaps to the gradual exclusion of those producers unable or unwilling to provide them. Verification would appear to be the most likely tool for this, in many cases enhanced by certification for a particular type of niche market. 

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