Bicycle Coffee Co. pedals fair-trade coffee(Read article summary)
It delivers by bike and keeps overhead low so it can sell 'ethical' coffee at a competitive price.
JOSE MIGUEL GOMEZ/Reuters
And here is where that coffee came from. The top five, in order, are Brazil, Vietnam, Colombia, Indonesia and Guatemala â€“ all regions that share, aside from similar weather patterns, developing economies. Coffee is the second-most valuable commodity exported from developing countries, after oil.
However, the majority of coffee that you see on supermarket shelves is sold at a steep markup that increases the profits of the company selling it to you, without helping the farmer who grew the beans and harvested them under the hot sun.
By now, most people have heard of "fair trade." But the real-life, on-the-ground effects of the model are often overlooked. So here's a quick breakdown of what fair trade really means:
Rather than rely on the fluctuating, often low prices that the global commodity market tends to offer, Fair Trade International (FLO) guarantees farmers a minimum per-pound price for their product. That means they can sell beans into a market that promises them a "fair" price, which right now for coffee in the United States is $1.40 a pound, and five cents above market price if the conventional market surpasses the fair trade price. Here are detailed fair trade standards for the United States.
On the whole, fair trade is widely praised not only because it boosts impoverished farmers' income and marks a small step toward equalizing the very imbalanced global economy, but also because it frees up resources for the greater communities in which farmers live.
By earning a better price for their crops, farmers are often able to afford goods and services that are considered necessities in the developed world, but are still a form of luxury in developing economies â€“ such as the ability to send children to school.
Fair trade can also involve companies reinvesting in the community in the form of development projects that benefit entire towns or villages, not just individual families. Because fair trade companies are often built upon principles of providing a high-quality product to the consumer while also benefiting the product's origin community, you'll often see that kind of reinvestment being made to build a school, recreation center, or even a hospital, for example, or to help with other needs identified by the community.
Fair trade really established itself in the world marketplace through coffee, but has since expanded to other foods â€“ chocolate, tea, bananas, and some spices are among the most common â€“ as well as to nonedible goods like artisan-made clothing and jewelry.
Critics' main qualm is that fair trade, at least for the coffee industry, doesn't live up to the theory behind its model. They argue that little data exists about its actual results; that the model overlooks multinational companies that may treat producers well; that regulations restrict fair trade to small farmers and overlook the poorest segment â€“ migrant laborers; and that price standardization, coupled with a rising market price for commodity coffee, often results in low-quality fair trade coffee.
The farmers sell their high-quality goods on the commodity market, and leave the dregs for the Fair Trade price â€“ which, in turn, roasters don't want to buy.
"Fair Trade coffee has evolved from an economic and social justice movement to largely a marketing model for ethical consumerism," says Peter Giuliano, president of the Specialty Coffee Association of America and a green coffee buyer based in Durham, North Carolina.
One solution to the discrepancies? Cut out the middle man and purchase beans directly from farmers you've visited.
That's the approach for the young founders of the Bicycle Coffee Co., which delivers coffee by bicycle to local businesses in the San Francisco Bay area that is not only fair trade, but is also organic and locally roasted. It purchases from farmers the employees meet on their travels through Central and South America. And it makes its zero-emissions deliveries by bike.
The company has advantages over other fair trade companies because with minimal overhead costs, it can sell its coffee at the same price as its non-fair trade competitors. That means a consumer does not have to make the choice to spend a premium for a fairly traded product. (Although to be fair to consumers, at least one study has shown that such a premium does not stop customers from choosing the fair trade option, even if it's more expensive, and even during a recession.)
Ultimately, the founders of Bicycle Coffee Co. aim to build a "micro-replicable business" that's easy to sustain from city to city. Check out the video to see how they're doing it.
Additional reporting by Blair Hickman
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