Kraft, the Phillip Morris subsidiary which is also the largest food and beverage company in North America, had an image problem. Between 1999 and 2003, worldwide coffee prices collapsed. Small coffee farmers in what were already some of the poorest countries of the world had to compete in a market dominated by mega-plantations, owned by corporations.
That $3.00 cup of latte you leisurely sipped at the local coffeehouse? The independent small farmer who may have grown some of the beans earned $0.02 on the sale.
Enter the Fair Trade Movement. Established in the Netherlands in 1988, in response to an earlier coffee market crisis, it encouraged small coffee growers to band together in environmentally-responsible, worker-friendly co-operatives.
The Dutch fair trade movement chose as its standard-bearer the fictional character Max Havelaar, who championed the cause of coffee workers in the Dutch colonies. The Max Havelaar Foundation offered Fair Trade certification to any co-ops who met its criteria for environmental and working conditions, and made sure that the coffee grown by these co-ops was marketed directly to the largest coffee processors, eliminating the middlemen from the process.
Certification guarantees growers a minimum of $1.26 per pound for their harvest; if market prices are higher, they get a $0.05 premium to the market price.
But Kraft, the producer of Maxwell House, which with Proctor & Gamble’s Folgers’, accounts for 56% of all coffee sold in the U.S., refused to support the Max Havelaar coffee producers. So in 2002, with coffee prices for small farmers at a thirty-year low, non-profit, poverty fighting OxFam International targeted Kraft with its Coffee Rescue Campaign.
The result? Although Maxwell House still does not contain coffee certified through the Max Havelaar Foundation, Kraft decided, in 2003, to announce collaboration with The Rainforest Alliance, which offers its own certification for growers meeting its environmental and humanitarian standards–but lets the market decide a fair price for its offerings. No guarantees, and no certainty that its growers will make enough to survive.
Now appearing at your grocery store, complete with the “Rainforest Alliance Seal of Approval”? Kraft’s All Life coffee, profit margin unknown.
