Coffee
Find out more about our approach to sourcing coffee
Coffee is the world’s second most tradable commodity (after oil) which makes it a big and complex business. UK consumers drink approximately 70 million cups of coffee per day, in and out of the home. Whilst sales at coffee shops continue to grow, the amount consumed in the home is in decline (particularly instant coffee).
Generally, coffee is grown within 1,000 miles of the equator, from the Tropic of Cancer in the north, to the Tropic of Capricorn in the south. It’s grown in more than 50 countries with Central and South America producing approximately two thirds of the world’s supply. There are two main commercial types of coffee bean – Robusta and Arabica. Robusta coffee grows best at lower altitudes whereas Arabica is better suited to higher altitudes. Seventy percent of the world’s coffee continues to be grown on farms of fewer than 10 hectares and most sell relatively small quantities – sometimes as little as only a few bags per year – to local traders, co-operatives, exporters and manufacturers. This means it can be a struggle to make a decent livelihood out of the crop. Climate change is also posing significant challenges to smallholder coffee farmers.
We sell coffee both in store and in our M&S Cafés. We are actually the UK’s third largest coffee shop chain, selling 35 million cups of coffee each year in 450 outlets, all sourced to high ethical and environmental standards.
Commitments and targets
We want to lead our sector in sustainable production and consumption, offering our customers the good value, high quality products and services they expect from M&S, while respecting planetary boundaries and the need for social equity.
Our goal is to ensure that all the coffee we sell both in store and in our M&S Cafés is Fairtrade certified. We are also committed to building resilient supply chain communities by investing in programmes which build livelihoods, protect the environment and improve wellbeing.
Approach
Coffee is very important to M&S. Our aim is to source the best tasting, best quality coffee from coffee co-operatives around the world. We source the majority of our coffee through two expert suppliers who have excellent relationships with our growers. We have been working with our key suppliers and many of the coffee growers for over 25 years and are very proud of the strength of our working relationships.
In 2004, we became the first retailer to source only Fairtrade certified coffee for our M&S Cafés. We sold Fairtrade only in stores from 2006. We took this decision to ensure that we have a viable coffee supply chain and to help strengthen the economic viability of the smallholder farmers within our supply chain. This commitment means that our growers receive over £180,000 a year in Fairtrade premiums which goes to a communal fund for workers and farmers to use.
The Fairtrade coffee standard only applies to smallholder farmers which means that all of our coffee is supplied by smallholder farmers – 20 co-operatives in total with key sourcing countries being Ethiopia, Peru, Sumatra and Nicaragua.
Our approach to sourcing coffee more responsibly is as follows:
To understand our supply chain and work with our main supplier to secure a quality supply chain
Minimum Standards
Our Technical Terms of Trade set our minimum technical expectations for suppliers to meet. It also sets out our position on a number of areas.
We have adopted the Fairtrade standard as our minimum global sourcing standard for coffee. This means our growers receive over £180,000 a year in Fairtrade premiums which goes to a communal fund for workers and growers to use, to enhance the lives of people and communities. Our growers determine what is most important to them; this might be education or healthcare for their children, improving their business or building vital infrastructure such as roads and bridges for their community. The use of the premium is decided by an elected premium committee which meets regularly and consults with the smallholder members of that co-operative. Fairtrade standards require that coffee producers must allocate 25% of their premium spend on yield and quality improvements.
We expect our growers to meet high environmental as well as social standards. We see our commitment to Fairtrade as the best way we can support the long term sustainability of our coffee growers due to the premium that is paid to them and the overall breadth of the standard. Our growers also get vital support and expertise from Fairtrade local liaison officers.
Our suppliers are also required to meet the requirements set out in our Global Sourcing Principles. Find out more about our approach to supplier management.
Continual review
We work with our coffee suppliers to regularly review the key challenges they face.
The reviews look at the key hotspot areas – particularly climate change and social issues and we then determine where further intervention is need to support the supply chain.
Establishing positive relationships with our growers
Understanding our supply chain is really important to us. We know the name of every grower and get quarterly updates on how much coffee we are buying.
There have been a few occasions where our growers have fallen out of the Fairtrade system, usually when they have not met one of the requirements of the audit standard. We have had relationships with our growers long before Fairtrade and as such we want to ensure we continue these relationships. When this does happen we work closely with Fairtrade Foundation, our supplier and other stakeholders to help our grower re-enter the Fairtrade system.
There have been a few occasions where our growers have fallen out of the Fairtrade system, usually when they have not met one of the requirements of the audit standard. We have had relationships with our growers long before Fairtrade and as such we want to ensure we continue these relationships. When this does happen we work closely with Fairtrade Foundation, our supplier and other stakeholders to help our grower re-enter the Fairtrade system.
Our key supplier sits on Fairtrade International’s (FLO) Product Advisory Council (PAC) for Coffee. The Council brings together industry experts, such as producers, traders, brands, retailers and civil society to look at key challenges and opportunities facing coffee growers. The PAC also helps guide FLO on issues of minimum pricing/premium levels.
We are also currently working on an exciting project with the Fairtrade Foundation to help us understand more about our growers and what support they need to help them thrive.
To support programmes which enhance the lives of people and communities
Natural coffee project – Ethiopia
This project provided farmers in the Killenso Mokonisa primary society (part of the Oromia Coffee Farmer Co-operative Union (OCFCU) in Ethiopia with natural processing capabilities and improved the quality of their coffee.
115 high quality drying beds were provided to replace beds of inconsistent and poor quality or floor-coverings. Over 1,500 farmers were also trained in high quality natural processing.
Through a combination of training and the beds farmers will have greater capacity for high quality natural processing so that they can diversify their export earnings and reduce their dependence on water and availability of milling facilities. The coffee from this project should be available in M&S Café blends later in 2016.
The project was funded jointly between Matthew Algie, M&S and Fairtrade Foundation.
Climate adaptation - Peru
In 2013, we visited our long-standing producer partner San Juan del Oro (SJdO) in Peru and met growers whose yields had fallen by 70% due to “coffee leaf rust” (a disease which had flourished with the onset of milder winters and harder rains).
To help combat this we worked with Matthew Algie and Twin Trading on a collaborative climate adaptation project for farmers and a more resilient supply chain.
Project activities included a combination of training and provision of equipment to ensure a joined up approach to educate farmers and facilitate the adoption of best practice techniques. Farmers also planted over 3,000 native trees in buffer zones to protect water sources and prevent soil erosion. In years to come the trees will provide a diverse shade canopy for the coffee plants which will create a positive growth environment and high levels of biodiversity. Sustainability of the scheme is further secured because farmers themselves collected the seeds and have built their own tree nurseries.
Results of the impact of this programme are still being collected but adoption of these innovative, more resilient farming methods will mean the supply chain is more robust and farmers’ yield and income streams are more consistent, allowing them to plan and invest more confidently.
Climate adaptation, gender & youth empowerment – Peru
The initial climate adaptation project in Peru and our supply chain analysis highlighted the importance of Peru to our overall coffee supply chain (both in store and M&S Cafés) and the challenges faced.
We decided to take the learning and expand the reach of the programme, this time working with both our suppliers (the first time this has been achieved) and Twin Trading (an NGO working with producer organisations to deliver social, environment and economic development for smallholder farming communities in developing countries).
The new project will share and develop best practice sustainable agriculture, gender equality and youth engagement and will last for three years benefitting over 2,000 farming households.
Working with others
Listening, learning, responding and working in partnership is an important part of how we do business.
We are working with a number of industry and civil society organisations to tackle many of the challenges in the coffee industry. Outlined in more detail above, with our direct suppliers and Fairtrade Foundation we are improving the livelihoods of our growers through the Fairtrade premium that is paid.
We’re also supporting a number of projects in partnership with our suppliers and Twin Trading to enhance the lives of people and communities in Ethiopia and Peru.
