Since its discovery more than 1,000 years ago in Ethiopia, coffee has grown to become a staple for many people and is one of the most traded commodities in the world. About 125 million people earn their livelihoods in the coffee sector. Once harvested, roasted, ground, and brewed, the resulting beverage warms and energizes consumers around the world. Coffee is so popular that some consumers are deeply interested in how their coffee is produced and prepared.
Voluntary sustainability standards (VSSs) have become well established in the global coffee sector since they emerged over 30 years ago. Roasters, retailers, and consumers in many markets regularly use standards to distinguish between conventionally produced coffee and more sustainable alternatives.
VSS-compliant coffee makes up a major portion of global production. Most certified coffee comes from Latin America and the Caribbean, with large volumes also grown in Asia and Africa. Demand for sustainable coffee is increasing, but the global market remains oversupplied, with a significant amount of VSS-compliant coffee not being sold as such.
Prices are a crucial factor for coffee producers, and VSS compliance can yield price premiums and protect farmers when international market prices are depressed. By differentiating their coffee through sustainability, they can also set a higher price floor, such as the Fairtrade minimum price, that serves as a platform for negotiating even higher prices for specialty varieties.
With global production exceeding 10.7 million tonnes of coffee produced by 12.5 million farms, moving the sector toward better environmental and social practices would go a long way to advancing Sustainable Development Goal 12 on responsible consumption and production, with complementary effects supporting the broader Agenda 2030.
Our research on coffee maps sustainable market trends and explores how governments, standards bodies, buyers, and other supply chain actors can use VSSs to fuel a more sustainable global coffee sector.
125 million jobs
The coffee sector provides jobs for about 125 million people around the world. Many work on 12.5 million coffee farms on the planet. About 95% of these farms are smaller than 5 ha, and 84% are less than 2 ha.
USD 102 billion
The retail coffee market is worth an estimated USD 102 billion. Annual production totalled 10.7 million tonnes in 2020, about 80% of which was exported.
2 million to 4.5 million tonnes
Between 2 million and 4.5 million tonnes of coffee was produced under VSSs in 2019, with a farm gate value of USD 4 billion to 11 billion. VSS-compliant coffee was grown by 1.1 million farmers, 60% of which are in Latin America and the Caribbean, with significant quantities also coming from Asia and Africa.
VSS production growth is fluctuating
Between 2008 and 2019, VSS production increased by a compound annual growth rate (CAGR) of 13%–19% but contracted at a CAGR between 1% and 7% from 2014 to 2019.
VSS-compliant coffee accounted for at least 21% of total coffee production in 2019
In 2019, 21%–45% of the global market was made up of coffee that is either compliant or potentially compliant with a VSS.
Major coffee roasters continue to pursue sustainable sourcing
The 10 largest coffee roasting companies purchased 3.44 million tonnes of coffee in 2020. From this total, 1.31 million tonnes, or 38% of all coffee purchased that year, were compliant with a VSS or corporate sustainability initiative (such as Starbucks C.A.F.E. Practices or Nestlé’s Nespresso AAA).
VSS-compliant coffee production in 2019
VSS-compliant coffee experienced a CAGR of 13%–19% from 2008 to 2019, accounting for 21%–45% of total coffee production in 2019. By production volume, 4Cs is the largest VSS in the sector, followed by UTZ Certified, Fairtrade International, Rainforest Alliance, and Organic.
How can VSSs affect farm gate prices?
VSS-compliant coffee producers may receive prices higher than the international market price. But the increase is not enough to meaningfully increase farmers' crop income due to recurring dynamics in the international coffee market. Prices tend to increase with double certification of Fairtrade and Organic and rise further for specialty coffee producers.
Distribution of coffee production in the top 10 producing countries in 2019
In 2019, almost 60% of VSS-compliant coffee came from Latin America and the Caribbean, led by Brazil, Colombia, and Peru; however, Vietnam produced the highest volume that year.