IISD reports rise in standard-compliant coffee production

The amount of coffee produced in compliance with voluntary sustainability standards (VSS) is increasing at a higher rate than the overall sector, according to a new report from the International Institute for Sustainable Development (IISD). The report shows the most significant growth in countries with low human development. IISD says about one-third of all coffee produced globally is VSS-compliant, with the sector experiencing a compound annual growth rate (CAGR) of around 24 per cent between 2008 and 2016. In the same period, VSS-compliant coffee increased at approximately 19 per cent CAGR in countries that rank lower on the Human Development Index (HDI). The institute adds that the sector’s continued expansion may require moving into new markets which have begun to adopt VSSs, including low human development countries (LHDCs), and working with farmers to support their transition towards more sustainable practices. “Brazil, Vietnam, and Indonesia are good prospects for increasing sustainable coffee production, given their volume of total coffee produced and VSS presence,” says Vivek Voora, IISD Associate and lead author of the Global Market Report on coffee. “However, Ethiopia and Uganda, followed by Côte d’Ivoire, Madagascar, and Papua New Guinea, could benefit the most from expanding VSS-compliant coffee considering their countries’ sustainable development needs as indicated by their HDI value, paired with their total share of global coffee production and VSS presence.” He says this potential for expansion in LHDCs may put a strain on farmers in countries battling price volatility and price decline, a lack of resources to strengthen resilience to a changing climate, as well as pest and disease outbreaks which can negatively impact coffee yields and farmers’ profitability. The coffee sector’s projected growth is fuelled by increasing demand from producing countries and emerging economies traditionally not among major coffee importers, including Brazil, Indonesia, and China, as well as the expansion of retail options, such as ready-to-drink coffee and pods or capsules. However, the IISA says the growth of VSS-compliant coffee is concentrated mainly in traditional markets, such as Europe and the United States and remains lower than supply. This supply-demand imbalance can limit the market growth potential of VSS-compliant coffee and needs to be addressed by value chain actors to benefit from the opportunities that stem from growing coffee demand from producing and emerging countries. For more information, click here. Global Coffee Report has launched a LinkedIn Showcase page. Follow HERE for up-to-date news and analysis of the global coffee industry.