Tab 4 | Our sourcing principles
We love coffee, and we think the people who farm it should be paid living wages. Our coffee isn’t certified Fairtrade for two main reasons:
1. Fairtrade cannot guarantee the quality standard required for specialty coffee. Fairtrade certifications are standardized, meaning it assumes one batch of coffee is equal to another, which isn’t true for specialty coffee. That makes it more complicated to get specialty coffee certified Fairtrade.
2. We’ve adopted sourcing principles that guarantee farmers a fixed and more premium price point than what they would get with Fairtrade, because it’s based on local living wages as opposed to variable coffee commodity prices.
We’re not trying to cancel Fairtrade - they do fantastic work - we’re just invested in finding the very best strategy for everyone, from the farmer who grows the bean to the person sipping on their latte at the very end of the chain, and we’ve chosen to go with another model of making that happen.
Our green coffee is sustainably produced and ethically traded. We’re dedicated to sourcing practices that prioritize the people we trade with. We have partnered with a Social Enterprise called Raw Material ↗, who guarantee that all Minor Figures coffee is sourced at a stable price even higher than what is considered ‘Fairtrade’. This means farmers are paid a premium on top of the local living wage and protected against commodity trading instability. 100% of the profits generated from sales through Raw Materials is returned to producers through payments for coffee and community-level investments.
New York Stock Exchange & Fair Trade prices for Arabica coffee, 1989-2009
Fairtrade minimum price acts as a safety net for farmers at times when world market prices – characterized by their extreme volatility – fall below a sustainable level. While the commodity market prices can range 6x between all time low to all time high, the farmers' cost to produce coffee, look after their family, and prepare for climate changes to come doesn't reflect those variations.
The Fairtrade system proved highly effective during the price crisis of the late 1990s-early 2000s. While world market prices fell to a 30-year low of 0.45 US$ / lbs, the Fairtrade system guaranteed a minimum price that was 180% higher. In recent years, the differential between world market and Fairtrade prices has been more modest, raising questions about the necessity of Fairtrade certification for small-scale farmers.
'Farm Gate' Raw Material vs market prices in Colombia, 2017-2019
Farm Gate prices is what Minor Figures pay for the green beans at the farm, before it's transported to be roasted. The cost of transport is not included to only reflect the changes in coffee price. Farm Gate prices are about 25% over cost of production to ensure farmers a guaranteed price and income.
'Farm Gate' Raw Material vs Fair Trade vs NYC prices, 2017-2019
'Export price' Raw Material prices vs Fairtrade and NYC prices (US cents/kg of green coffee)
Raw Material's impact on small farm holders
Let's change things. in 2019, seeking through Raw Material generated an average 5.1x higher profit for families in Colombia.