Introducing Firelight Coffee Sustainability Benchmarks

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How do you know that the coffee you’re drinking is good? Not just that it tastes good, but that it is good—for the people who grow it, transport it, finance it, sell it, drink it, dispose of the waste from it, and anyone else involved in the whole supply chain. How do you know that the coffee you’re drinking is good for the earth itself? This was the question that led Firelight to develop our new coffee sustainability benchmark system. Our goal has always been to offer sustainable coffee that tastes great, and it kept leading us to these questions around sustainability. We began looking for a certification, a rigorous test, or system that could help us find a believable answer—an answer that considers all the complexities that affect coffee and its supply chain, and that celebrates the forgotten few (primarily farmers and importers/exporters) who are key to creating equitable coffee sourcing operations. We kept coming up short, and rather than give up hope, we decided to create our own system.

What is it?

The Coffee Sustainability Benchmark system is made up of a large set of questions covering the environmental, economic and social sustainability of every coffee we source. These questions are sent to our importing partners and farmers, who complete the questionnaire with as much detail and documentation as possible. After any follow up questions are answered, we assign weighted scores to each question to come up with a simple 1 to 5 score for each section, while making most of the raw data publicly available as well. This allows us to celebrate the hard work of our farmers and producers who take the time and energy required to make high quality, sustainable coffee.

The benchmark system we came up with isn’t perfect, because no system like this can be. However, just like dialing in a perfect espresso shot or brewing a perfect pour-over, the coffee industry has always been about incremental improvement and the pursuit of perfection. We’d like to share our story with you so that you can be a part of the journey and, at the end of the day, you can answer the question: “Is the coffee I’m drinking good?”

Photos courtesy of Here For Good Films (@hereforgoodfilms)

Defining “Sustainable”

You are about to read this word a lot in the next few sections, so we want to define how we use it. We believe that sustainability means “something that can continue, at the same or a higher level, for the next 100 generations.” This definition, applied to a physical product, requires that the system used to create, use, and dispose of that product be able to continue for 100 generations without seeing a significant drop in quality, destroying the earth, or diminishing the humans involved in the system.

Environmental Sustainability

When we began putting together our coffee benchmarks, environmental considerations seemed to be a logical place to start. We began reaching out to importers and coffee farmers that we knew were already forward-thinking on this. Our initial primary contact was Felipe Croce at Fazenda Ambiental Fortaleza, also known as FAF Coffees. Felipe and his team have been working for over a decade to create an environmentally sustainable coffee sourcing operation in Brazil. This process has led them to create a wide network of partner farmers whom they work with year over year to ensure that quality levels are increasing and that environmentally sustainable farming methods are being implemented.

Throughout the course of half a dozen conversations, we began to learn a lot of specifics about coffee farming and sustainable vs. unsustainable practices. We learned about the use of Glyphosate (hint, it’s not great), the importance of plant and animal biodiversity on the farm level (hint, the more the better), and a many other things, from shade trees, to irrigation, to succession biomass. All of these specifics became individual questions within the environmental section of our benchmark document, and we recognized some underlying principles:

  • We should strive to neutralize negative effects on the land.
  • We should then focus on implementing positive change to the land.
  • If we can create virtuous cycles, we can systematize positive change.

The first two principles are directly related to creating environmental sustainability. To begin creating a system that will last for 100 generations, you must stop harmful practices. The specifics around this are very similar to the process of attaining an USDA Organic certification. Many farms FAF Coffees work with are organic in practice, but they don’t have the certification because the cost of attaining it is much higher than the extra price they can charge for their coffee, making the economic benefit negligible. Many of the organic farming practices involve stopping the use of fertilizers and herbicides. These chemicals do a great job of killing the intended weeds or pests but also kill everything else, especially microorganisms that help the coffee plants. For many farms, this process begins with limiting harmful inputs and slowly replacing them with organic inputs that are targeted toward the specific weeds or bugs that need to be controlled.

Once negative effects are neutralized, the next step is to begin implementing positive change. These changes include things like ensuring shade trees are being planted, cover crops are maintained, and irrigation is limited. Many positive changes require letting the earth “do its thing”. These positive changes are most readily seen by their effects – greater biodiversity, a return of ladybugs or bird species that had previously fled the land, and more naturally healthy fauna.

These changes all must be accomplished in a way that celebrates incremental improvement and tangibly rewards every step forward. FAF Coffees developed a simple system where farmers could implement more sustainable farming practices and receive a higher price per pound of coffee. Asking a farmer to become certified organic before offering higher prices is like asking McDonald’s to begin serving Wagyu beef before you buy a single burger– it’s probably not going to happen. FAF Coffees’ insistence on creating a virtuous cycle that tangibly rewards small steps forward became a key to our entire benchmarking system.

We began expanding our conversations around environmental sustainability to other importers, and it led us to realize that, much like Maslow’s hierarchy of needs, environmental sustainability sits on top of a pyramid. The base of the pyramid is economic and social sustainability. Simply said, it’s hard to care about the future of the planet when the future of your immediate family or your wider community is in danger.

Photos courtesy of FAF Coffees (@fafcoffees)

Economic Sustainability

Ensuring fair pay for people is hard. It seems like it should be simple, but the complexity that surrounds minimum wages and livable wages, the intricacies of trying to measure accurate cost of production, and the ever-changing nature of international trade regulations makes finding the right number difficult. Robin Roth of Tradecraft has said “we are painfully aware that 40 years of Fair Trade has not done enough”, and as Firelight began to look deeper into the economic realities facing coffee producers, we couldn’t agree more.

Making sure everyone in the supply chain is paid fairly is a key to real-world sustainability. It’s not just about the justice of people being valued as people (which is critical), but represents a very down-to-earth economic reality. If people aren’t compensated adequately for their work, they may seek other employment opportunities or face such severe financial strain that they are unable to continue working, potentially leading to situations where farms are bought out or families fall into extreme poverty and face starvation. If we cannot find a way to ensure fair pay, we also cannot move on to encouraging environmental stewardship in any meaningful way.

We did our best to simplify (but not minimize) the issue, and we had some good partners help us navigate the waters. Key partners that helped us include Jim Ngokwey with Mighty Peace Coffee, the team behind the Specialty Coffee Transaction Guide, and a particularly informative lecture at the 2023 Specialty Coffee Expo led by Azahar Coffee and Intelligentsia’s founder. We tried to stay laser-focused on whether the people doing the work at the farm were being paid fairly and made sure we were erring on the side of overpaying, not underpaying.

A key measurement we came across was the Free On Board (FOB) price of Coffee. Coffee’s FOB price is becoming a standard reporting metric in the specialty coffee industry. Basically, this is the price paid for coffee once it gets on a container ship for transport. This price is listed on international shipping documents and is verifiable. The FOB price is a single number that includes:

  • The amount the coffee farmer was paid
  • Transportation costs within the producing country
  • Additional logistics costs in the producing country
  • Margin for the exporter

This is helpful because every coffee has an FOB price that can be compared across countries and companies. We are able to compare the FOB price of a coffee up against the Specialty Coffee Transaction Guide (SCTG), which helps us know that we are paying above the industry standard for a coffee. See the table at the end of this post for a deep dive into how we use the SCTG and FOB price to help ensure we are paying fair prices.

What is your buying strategy?

A key question we started asking in this section was: what is your buying strategy for this coffee? We realized that all of our most thoughtful importers had a robust strategy that focused on supporting farmers. This support gave farmers the ability to invest in more sustainable farming methods that increased the quality. We started distancing ourselves from importers whose approach was to simply sample various coffees and then negotiate favorable deals for the best-tasting ones. Though not deceptive or unethical, this approach revealed a misalignment with our values. We wanted to guarantee quality over the long-term by ensuring that everyone in the supply chain was paid fairly, but some importers only valued quality and rock-bottom prices. For every importer that we had to stop working with, there were thankfully three others that were value-aligned. We received some amazing stories and insights into how some of our partners celebrated farmers, treating them as partners, and ensured they were being paid at or above market prices.

The economic section of our coffee benchmarks turned out to be quite robust, with a great deal of third-party verification built-in. We are confident that coffees which score well on the economic section of our benchmarks represent coffees that are paying everyone in the supply chain sustainably. The economic sustainability piece is only half the base of the pyramid, though. A living wage must be paired with social sustainability in order to create a firm enough foundation for long-term environmental sustainability.

Photos courtesy of Selva Coffee and Forest Coffee

Social Sustainability

You’re probably familiar with the saying “hurt people hurt people.” The good news is that the opposite tends to be true too. Because people make up communities, healthy communities grow healthy people that play a vital role in creating sustainable systems. To be completely honest, the social sustainability section of our benchmark was where we were the most out of our depth. We were not the experts, and we still don’t consider ourselves experts in recognizing healthy societal trends and practices. As with our other sections, we leaned heavily on several of our importing partners who were doing great work in social sustainability.

Jim Ngokwey from Mighty Peace Coffee, mentioned above, was a huge part of helping us create a system by which to measure the social impact of a coffee. As a women-and-minority-owned social impact company, Mighty Peace Coffee was born with the idea that coffee can “take care of people and the planet while promoting peace”. Multiple conversations with Jim helped us to realize that the social impact of any business can take many years to be realized. Poverty alleviation, for example, can be hard to gauge in anything less than a decade because shorter time-frames may produce results that aren’t able to be maintained.

We also did not want to force any of our partners to take on philanthropic endeavors for the sole purpose of scoring higher on our benchmarks. Our goal was to identify whether our partner’s approach to a community was holistic, recognizing and thoughtfully addressing areas that needed extra support. After asking about basic working conditions on the farms and processing stations (based heavily on the International Fair Trade guidelines), we built a list of questions around frequently mentioned issues.

Many coffee regions struggle with extreme poverty, gender inequity, and lack of access to education and basic needs (especially clean water and nutritious food). We began asking about these areas to see if our partners had a plan in place to address any issues they saw. Our answers differed widely from country to country. How you approach gender inequity in the Democratic Republic of Congo is vastly different from Costa Rica, for example. Given that many of our importing partners operate in-country, we trusted that they were the experts at interacting with those cultures and asked enough follow-up questions to ensure that we weren’t receiving scripted answers.

We still feel like small fish in a big pond when it comes to social sustainability, but we recognize the importance of getting started. This section is a key part of the benchmarking process, and we anticipate growing in our knowledge of the frequently seen issues and how we can partner with others to address them in meaningful ways.

Photos courtesy of Benchmark Coffee Traders

Next Steps

What’s next for Firelight Coffee as it relates to our benchmarks? We mentioned virtuous cycles above, and we hope that by taking this first step of creating benchmarks, gathering data, and sharing it publicly, we have begun a cycle that will encourage change. Our goal is incremental improvement with every passing year, and there are three key areas we want to grow in next.

First, we would like to update our questions and gather new information every harvest. Different coffee-producing countries have different harvest seasons, and, in an effort to keep our coffee as fresh as possible, we book from harvest to harvest. We will keep asking every importer for updated information when we re-book a coffee so that we can keep track of the incremental improvement taking place. Our attitude is, and will continue to be, one of celebrating and rewarding those who are doing the hard work of making our world a more sustainable place.

Second, we want to begin capturing more documentation. To get these benchmarks rolled out in a timely manner, we’ve had to rely on verbal agreements for many of our questions and trust the relationships we’ve built over the years. We recognize that best practice would be to have clear documentation on as many questions as possible. An even further step is to ensure third-party documentation. If a farmer says she’s not using a harmful input, that’s good. If she has a report that she fills out every year with soil analysis data, that’s even better. If a third party does the soil analysis and publishes it publicly or shares it with us, the importer, and the farmer, that’s best practice.

Lastly, we want to begin a process of helping to foster incremental improvement by putting our money where our mouth is. Especially in coffees that are just barely passing in a category, we want to be able to pay a premium to help with a key area of growth. If adding $0.50/lb helps a farmer plant shade trees that increase the environmental sustainability of his farm and increases the quality, we want to find a way to add the premium.

Conclusion

It’s important to realize that all of our work has taken place within the world of specialty coffee– a world that deals with only the highest quality band of coffee grown globally (about 2% of total supply). 75% of the coffee we were sourcing was already meeting our minimum requirements in the categories explained above. To attain the quality band that we seek, many of our partner farmers and importers had already begun implementing sustainable systems. Great tasting coffee, it turns out, comes from farms that are run with environmental awareness, grown by farmers who are paid equitably and who live in healthy communities. We have a few coffees that we’ll be cycling out as the importers were unwilling to share (or didn’t have access to) the information that our benchmarks required. The vast majority of our partners were already living by the benchmarks we were creating.

Our hope is that these benchmarks, first and foremost, create a higher level of transparency for Firelight and our key partners. It’s hard work creating a more sustainable world, and we want to recognize and celebrate when it’s being done well and when we, or our partners, fall short. Transparency and accountability go hand in hand, and we want to embrace both.

Secondly, we want these benchmarks to help every customer that visits our website discern the coffee that is right for them. Some offerings, like Minor Jiminez, are pushing the boundaries of environmental sustainability. Other offerings, like Daniela & Valdir, are some of the most economically sustainable coffees we source. These benchmarks will help our customers take that information in at a glance. We believe that these core categories of sustainability – Environment, Economic, and Social – help us simplify the complexity of ensuring a cup of coffee is truly good and be able to answer our initial question with assurance.

Lastly, there is a larger vision we hope these benchmarks help us realize, one that extends beyond the doors of Firelight. We want to be part of creating a better definition of “good coffee”. This definition would include coffees that taste amazing, pushing the envelope on quality, but would take into account the whole picture. A coffee that tastes great but destroys the earth and underpays the farmer is not a good coffee. It’s not good because it’s not sustainable. The earth will eventually no longer produce anything if not cared for, especially high-quality coffee, and the farmer will go out of business if not paid fairly. Our hope is that these benchmarks, and the system we created to gather them, will be a building block in creating that better definition of “good coffee”.

We must begin thinking of coffee, and every product, as something that can contribute to human flourishing or lead to its diminishing. Our mission at Firelight Coffee is to make sure that everyone has access to sustainable coffee that tastes great.

Will you join us?

***

Further Reading

Using FOB (free-on-board) Price & the Specialty Coffee Transaction Guide 

Mark Twain famously quipped “Facts are stubborn things, but statistics are pliable.” When examining economic sustainability in coffee, it’s important to avoid simply collecting statistics that can be manipulated to fit marketing narratives. In the previous section, we discussed the utility of the Free on Board (FOB) price of coffee. Much like pliable statistics, when taken in isolation, the FOB cost can be ambiguous. It becomes much more helpful when compared alongside additional information, such as the FOB costs paid by other companies.

At Firelight, we use the Specialty Coffee Transaction Guide to help give us valuable information on what FOB prices other people are paying for their coffee.  Below is an example of the charts that are present in the guide. 

CoffeeGrade (SCA Scale)# of Contracts Pounds  (Million) Value  ($ Million) Lower Price  (25th %ile) Middle Price  (Median) Higher Price  (75th %ile) Median over 3 years 
From 3,001-10,000 Pounds 
80-81.9 – – – – – – $2.25
82-83.9 202 1.19 $3.46 $2.40 $2.85 $3.44 $2.31
84-84.9 498 2.97 $9.73 $2.80 $3.28 $3.69 $2.78
85-85.9 527 2.84 $10.63 $3.25 $3.72 $4.17 $3.20
86-87.9 982 5.14 $21.06 $3.55 $4.00 $4.50 $3.55
88 plus 153 0.84 $3.81 $4.02 $4.50 $5.00 $4.01
No score 710 3.80 $14.67 $3.35 $3.80 $4.25 $3.25

Now this may seem like gibberish, unless you happen to be an actuary or a CPA. Basically, once we know the FOB price we’re paying, this chart is able to tell us whether we pay more or less than the average within the industry. This particular chart is for contracts between 3,000 and 10,000 pounds, which is about the size of our average coffee purchase. Most of the coffees we purchase would fall into the categories highlighted in green above. We are currently paying between the 50th and 75th percentile or higher on all these coffees. Several specialty lots we occasionally source would fall into the blue highlighted category. We are currently paying more than the 75th percentile for all of these offerings. 

You can take a deeper dive into the Specialty Coffee Transaction Guide by going to their website, downloading the guide itself, and reading more about their methodology.


Top photo credit and first gallery: Here For Good Films (@hereforgoodfilms)

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