Interview with Meine van der Graaf from MVO Nederland
It’s not a secret that the coffee industry is affected by inequality issues: farmers are structurally underpaid and small roasters are struggling by contending with low margins, high costs, and competition. Besides that, coffee production has also an environmental impact on our ecosystem in terms — for instance — of carbon emission, water pollution, and deforestation.
As we all know, coffee is a beautiful product, it makes people happy worldwide. Did you know that all together we drink more than 2 billion cups of coffee a day? However, the coffee industry is complex and many people worldwide are dependent on it (20–25 million smallholder farmers) and 200 billion dollars is the retail value of an industry that also leaves a huge footprint on our planet.
Wakuli was born as a way to address the challenges of the industry, collectively changing the way we approach coffee. For instance — together with MVO Nederland — we are part of the Futureproof Coffee Collective which strives to persuade companies and consumers to pay a different price for coffee by developing a joint source method for calculating the true price of coffee: a price that includes the social and environmental costs. Easy to say, right? Well, when it comes to doing it…this is a different story!
MVO Nederland is a movement of entrepreneurs in the new economy which strives for a future-proof world characterized by a climate-neutral, circular, and inclusive economy with fair chains. MVO Nederland is connecting entrepreneurs to enable them to join forces and work together towards this ambitious vision. Since the coffee industry is far away from being equal for all the actors involved, MVO Nederland launched a collaborative venture together with over 20 coffee companies aiming to charge a true price for coffee: the Futureproof Coffee Collective (FPCC).
Want to know more? Here we go…
Meine van der Graaf is working for MVO Nederland by connecting Dutch small and medium enterprises with a sustainable and social profile to facilitate the collaboration of front runners to get more insights into their value chain and he is going to tell us more about sustainability in coffee production and his experience with Futureproof Coffee Collective.
- Meine, what do you do at MVO Nederland and why should we all be talking about True Price?
I am a project developer at MVO Nederland. I develop projects or initiatives with SME companies that are willing and able to make their value chain more sustainable, mainly in coffee. Looking at the sector of coffee, there are a lot of companies that have ideas about how the world should function in order to make their product literally futureproof and to make sure that these products will be there in 10–20 years. In some cases, it is all about the social aspect: paying people enough so they can make a livelihood in order to make sure that these products will be there in one or two generations. In other cases, it is more about resources: climate change, loss in biodiversity, or soil degradation.
If you want to change the sector — and there is not enough room to invest in this change because of the business model — then there is no solution. So, in a lot of cases, a better price for a product is going to make a change, and in order to calculate that price, you need to know the price tag for the hidden costs of production. That component provides you a talking point towards your customers, stakeholders, the market to explain why a product needs to have a different price in order to make it futureproof. That is why I think it is elementary to change the coffee sector and in a lot of cases, the smaller companies need to explain why there is a different price tag. On the other hand, the bigger companies are big because they can make money on a market where these low prices are the way to go. We are not really talking with the big players because they are usually happy with the market as it works.
2. FPCC is a collective of small frontrunners. Shouldn’t big companies be on board as well?
The main goal of this network is to facilitate frontrunners companies to put ideas for a sustainable coffee sector into practice and all companies have different ideas about that. I would say Wakuli is a frontrunner. There are a lot of companies in this network that have ideas but Wakuli is exceptionally ambitious in that sense! There are bigger companies that are frontrunners in their own way or market segment. If companies are willing and able to really change their core activities towards a futureproof sector nobody should be excluded from working together. In a lot of cases, we see however that big companies can not make that shift.
We try to bring SME companies together to try to create one sound towards the outside world and also some methodology through cost-accounting for them to explain to customers why coffee needs a different price.
Besides that, small frontrunners are paying better than the big competition but, in a lot of cases, they are paying better for better coffee and this is where the problem arises. The farmers get less coffee from their lands when they focus on quality, so a higher price tag for their coffee is already normal. So the question is not “are they paying better for better coffee?” but “are they paying better all over the spectrum?”. What you should take into account is that when you buy less coffee then the cost goes up. So it doesn’t really mean that in the end, the farmer is earning more. Therefore, I would say in a lot of cases they are already paying a good price but for them, it is good to calculate what would be the best price to pay for coffee. For that, you just need to do more calculations — for instance — for living income but also impact on climate and environment.
3. How would you explain to people that a different price tag for their coffee is needed?
This is a million-dollar question! There is no one solution. I think the most important thing is to create a critical mass. You need a lot of companies that together explain why coffee needs to have a different price tag. Companies should explain to their customers: “so, this is the problem: coffee does not have the right price tag and, if we go on like this, we will have a problem in the future. We are willing to reconsider our business model but customers also need to reconsider their willingness to pay”.
What is really important is also the B2B market which is, of course, now very difficult because of COVID19. However, if you look at the governments they are already procuring coffee and they are taking ideas into account. We have been able to stimulate them to change their procurement criteria.
4. When can we say we have future-proofed coffee? Will we ever get there?
We will get there. It depends on what you define as success. I would say that individual examples of future-proofed coffee are already very much in their way: producers are working in a very sustainable manner and gain a good price for the coffee. The market influence needs to go down. You need to create a common approach to transparency and to make a common practice to know where your coffee is coming from. Companies are proud that their coffee is traceable but in the future, you need to turn it around: a market in which it is shameful if you don’t know where your coffee comes from. It should be the other way around and all the companies in this network are working on that. It is possible but the scale of it is the difficulty and it will take time. We hope that through our initiative we can speed it up a little bit.
5. What is driving you in doing what you do?
All of the above. I fell in love with the product. I have been working already for MVO Nederland for 9 years and for the last 3 years I have been focusing on coffee. I am intrinsically driven to make a difference and make sure that the world is not only about personal profit but also about keeping things livable and nice. Mainly I was triggered by the environmental side of it but along the way, I discovered that there are social components especially in developing countries. The social and environmental components are connected in a way that you need to solve both. If you don’t solve both you solve neither. And the coffee value chain I think is such a beautiful one because it is all about emotions. It’s not just the caffeine that is addictive but the whole market.
6. Meine, lastly; what’s your favorite coffee, and how do you brew it?
Very difficult question! I would say the high-quality Latin American coffee from Perù or Colombia. Washed. Brewed with a V60. Quite a specific answer :) But it’s an impossible question because today this is my answer but maybe tomorrow will be coffee from Ethiopia. And also…it depends on what music you are listening to!
