LONDON - Food groups such as Nestle and Sara Lee Corp. face growing pressure from consumers to guarantee farmers in poor countries a better deal, the head of a so-called ethical coffee scheme said on Tuesday.
Consumers also want to know where their food comes from and that it is produced without damage to the environment.
"There is ever more focus on transparency in food chains. Consumers expect companies to know where their products come from and how they are made," Utz Kapeh Executive Director David Rosenberg told Reuters.
"They trust a brand. They are buying the relationship buyers have with producers. Consumers can be lazy but they can also be unforgiving when they find you have abused that relationship," he added.
Rosenberg was previously director of corporate responsibility for six years at Dutch retailer Ahold, the world's No. 4 food retail group in sales terms.
Sara Lee roaster Douwe Egberts is in talks with the Netherlands-based Utz Kapeh to increase the coffee bought under its certification scheme so it can launch a product for the UK retail market, where demand for food products guaranteeing certain social and environmental production standards is growing fast.
Sara Lee will triple its use of Utz Kapeh coffee to 7.5 million kg, or 10 percent, of its coffee purchases this year.
"They found it difficult to make credible claims about what they were doing in origin, and with Utz Kapeh they can," Rosenberg said.
Nestle, the world's largest food group, entered the ethical coffee market earlier this month with a ground coffee certified by the Fairtrade Organisation for the UK retail market.
Farms selling coffee under the Utz Kapeh scheme have to meet certain criteria on areas such as labour rights and environmental sustainability. Buyers can then assure their customers they can trace the beans back to origin.
Fairtrade certification means farmers receive a minimum guaranteed price and a premium, whatever the fluctuations of the world coffee market, whereas Utz Kapeh leaves producers and buyers to negotiate a price, which included an average premium of $0.04 cents a pound in 2004.
Rosenberg said that in the long term such certification schemes will probably consolidate as farmers learn to diversify.
"We see in Central America and Peru lots of producers trying to figure out a way to get the maximum bang for their certification buck, looking for synergies in the auditing and integrated systems that can be used for different certification schemes," he said.
Other coffee giants such as Kraft Foods Inc. and Procter & Gamble Co. have also bowed to demand from ethically aware consumers and sell some coffee certified by Rainforest Alliance, which focuses on environmental protection on farms.
The change in attitude by large food companies, even though non-governmental organisations such as the UK's Oxfam say they still have far to go, stems from three factors, Rosenberg said.
"Clearly one is social accountability...Another is the exposure of Europe to food safety issues over the past 10 years and, finally, global attention to corporate accountability. These things create a perfect storm for coffee -- three waves converging at the same time."
He expects Utz Kapeh coffee purchases to rise almost 50 percent in 2005 to over 30,000 tonnes.
The programme, whose name means "good coffee" in a Mayan language from Guatemala, has producers in 18 countries in Africa, Asia and Latin America.
Other Utz Kapeh buyers include French retailer Casino, Mitsui in Japan and Somerfield Plc in the UK.
The strategy chosen by Somerfield illustrates Utz Kapeh's main aim, Rosenberg said. It uses certified beans for its whole own-label coffee range, as opposed to presenting an ethical coffee as a niche item alongside its mainstream products.
Story by Eleanor Wason
REUTERS NEWS SERVICE
