Many consumer goods in grocery stores now have labels stating if they are direct trade, or Fairtrade. Beyond the altruistic appearance, what do these labels mean? What’s the difference between direct trade vs Fairtrade?
What is direct trade coffee?
Direct trade is just like it sounds, where coffee is bought straight from the producer rather than through a third party. Roasters source green coffee directly from producers without the use of intermediaries. Under this model, producers profit more than they usually would because the money goes directly into their pockets, ensuring they earn a sustainable income. Coffee farmers also avoid hidden costs, such as processing and transport fees. Direct trade coffee fosters relationships between roasters and producers, whereas those relationships did not exist before. Through this relationship, quality and price consistency thrives. This supports coffee farmers more directly and sustainably. However, only farmers with the right resources can take advantage of this program.
What is Fairtrade coffee?
Fairtrade USA is a nonprofit organization that labels consumer goods produced according to ethical standards. These standards include fair wages and good working conditions. Fairtrade works with certified organizations that establish independently validated country-specific and region-specific living wage benchmarks. For example, the living wage for a tea worker in Sri Lanka is LKR43,080 (SRI LANKAN RUPEES), this equates to $120 USD per Month (2022 Estimate).Thus, any Fairtrade labeled tea from Sri Lanka is guaranteed to pay this living wage to farmers.
Fairtrade relies on ensuring quality products are produced in the right conditions and with proper compensation. However, this leaves wiggle room with regard to where the money goes. Do farmers get that wage? How do we know that every farmer is getting paid fairly? Many intermediaries exist in getting coffee beans to stores, such as coffee mill processors, transporters, etc. Fairtrade pays farmer co-ops and associations, but then it becomes the co-ops and associations' responsibility to distribute the money. You can read more about Fairtrade coffee here.
Direct trade vs Fairtrade
Both direct trade and Fairtrade aim to uphold ethical pay for coffee producers, however, they achieve this goal through different approaches. Fairtrade is an organization that standardizes goods based on base pay according to country or region. This program helps establish a baseline for coffee prices, working conditions, and more. Direct trade is a transparent exchange of goods between the buyer and the producer, where buyers know exactly how much the coffee is, how much the farmer makes, and how much exporters or importers make. This is important for building a strong relationship between coffee farmers and buyers.
Bean & Bean coffee
We pride ourselves on sourcing and selling ethical coffee at Bean and Bean. We offer both Fairtrade and direct trade coffee. On our site, you can find categories for both. Some of our best Fairtrade coffee includes the Downtown Blend, Perus Las Damas, and Indonesia Sumatra. For direct trade coffee, we roast all of the beans ourselves. Some of our best direct trade coffees include the award-winning Santa Felisa Gesha Honey, Panama Gesha Lot 290, and Santa Felisa Washed.
Fairtrade and Direct Trade coffee are essential parts of the coffee economy and that support coffee farmers differently. While Fairtrade uses a standard living wage to ensure the coffee farmers receive more pay, direct trade cuts out intermediaries so that coffee producers receive more money upfront.
Buying ethically sourced coffee is a great way to practice sustainability, you can browse our selection of ethically sourced coffee here. However, buying Fairtrade or direct trade coffee is not the only way to be sustainable. Learn how to drink coffee more sustainably here.