The Grounds for Sharing: A study of value distribution in the coffee industry

With over 2.25 billion cups of coffee consumed globally every day, the international coffee market generates substantial and growing value. However, there has been a knowledge gap on how this value is distributed in the supply chain and how much of it reaches coffee growers. 

The complexity of the coffee market and price volatility brings risks for all stakeholders in the supply chain. Risk mitigation has led to a concentration of value away from producers, in the hands of coffee buyers and brands. Rising costs of labour and inputs have hit the most vulnerable coffee producers hard. Having farmers in a disadvantaged position is a long-term risk for the sector as a whole. 

With this in mind, the Global Coffee Platform (GCP), IDH and Solidaridad commissioned BASIC (Bureau d’Analyse Sociétale d’Intérêt Collectif) to build a model to estimate the distribution of value, costs, taxes, and net profit margins along coffee value chains, from coffee farmers in Brazil, Colombia, Ethiopia and Vietnam, to retail consumers in Germany. The aim was to shed light on the value created, and the costs and margins, at each stage of the supply chain, to provide a starting point for additional ways to work on farmer prosperity, that think through value and risk distribution in the sector. 

Producer Country Annexes

Figure 1: Costs, profit margins, taxes and net farmer income for a kilo of branded ground coffee.
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