Methods and Challenges of Sustainability Measurement for Small-Scale Coffee Roasters

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2019-04-24

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Abstract

Strategic consideration of sustainability in business practices can create value for stakeholders, help manage supply chain risks from climate change, improve employee and customer retention, and increase the financial performance of a company (Whelan & Fink, 2016). Following the classic adage, “what gets measured, gets managed,” businesses across industries have realized the importance of quantitative sustainability assessment for internal accountability and external transparency purposes (Gardner et al., 2018).

The coffee industry has embraced the idea of sustainability, but confusion exists regarding exactly how to measure and track sustainability impacts throughout coffee’s complex global value chain. Industry groups and agricultural sustainability organizations have provided some guidance on the topic of which sustainability metrics roasting companies should measure, but efforts to standardize these criteria across the industry have thus far failed to take into account the perspectives of small-scale roasting companies. Roasters range widely in size, and those on the smaller end of the spectrum may have access to fewer resources, different partnerships, and a variety of rationales for pursuing sustainability initiatives. These three factors may influence the way in which roasting companies choose to measure their impacts.

The overarching objective of this research was to document the current methods of sustainability measurement used by smaller roasters and the main challenges that these roasters face in their pursuit of measurement. My results are intended to be shared with the industry so that groups such as the Specialty Coffee Association (SCA) and the Global Coffee Platform (GCP) can take the perspectives of smaller roasters into account in their efforts to standardize sustainability metrics across the coffee sector. More specifically, my research questions were:

  1. How does a roasting company’s motivation or rationale for measuring sustainability metrics influence their sustainability measurement?
  2. How does the scale/size of a roaster influence their sustainability measurement?
  3. How do partnerships with different types of organizations influence a roaster’s sustainability measurement?

Methods

I conducted 15 semi-structured key actor interviews with 10 representatives from smaller-scale coffee roasting companies across the U.S. and five interviews with industry representatives. Interviews were transcribed and coded using NVivo 12 qualitative analysis software (NVivo, 2018). Coding results were then used to inform the design of an online survey for small-scale coffee roasters. The structure of the survey followed a similar format to the interview guide and included questions regarding roasting company size, company use of sustainability metrics, rationale and motivation for measurement, existing partnerships, and demographic information. The survey was distributed with help from the SCA, World Coffee Research (WCR), and the roasting company representatives interviewed. I received 40 survey submissions, of which 35 were complete. Survey results were compiled and visualized in Qualtrics survey software.

Results

The following five themes were identified and explored throughout the interview process:

A. Area of focus under the broader sustainability umbrella B. Metrics currently measured by small-scale roasters and why C. Feasibility of sustainability measurement D. Influence of roasting company size on sustainability measurement E. Partnership support for general sustainability efforts and sustainability measurement

Interview and survey results suggest that sustainability efforts in the industry place an emphasis on the economic and social sustainability of producers, but sustainability measurement seems to focus on environmental and social sustainability at the roaster operations segment of the supply chain. Internal accountability and marketing were the top two rationales for measurement mentioned by key actors in interviews. However, internal accountability was stated as the singular top motivation to record metrics by 45% of survey respondents, suggesting that marketing benefits may be secondary to main internal drivers of measurement. Similarly, roasters seem to first look to their internal mission to decide which metrics to measure. Roasters then turn to certification/reporting schemes and coffee industry organizations for guidance regarding exactly which metrics to track. However, neither of these two entities were commonly mentioned as partners that help roasters actually measure sustainability. Rather, supply chain partners (importers, exporters, etc.) and sustainability assessment companies were indicated as partners that actively help roasters measure metrics by providing access to the information. Issues related to data collection and management are the biggest barrier to measurement for smaller roasters, with data management softwares/technologies and partnerships (with other smaller roasters and with sustainability assessment companies) seeming to offer the most promise in overcoming this barrier.

Recommendations

Given these results, I provide the following recommendations to smaller roasters and coffee industry groups.

Small-scale roasters:

  • Company internal social metrics may be easy to measure, but if the industry truly wants to address economic and social sustainability of producers (as was found in interviews), roasters need to dig deeper into measurement of producer profitability. The only metric related to producer wellbeing that is commonly measured is FOB (Free on Board) price, or the price a roasting company pays for coffee ready for export, which does not accurately represent producer profitability.
  • Look to supply chain partners for guidance on what to measure, given they are generally helpful in designing and/or measuring sustainability metrics (as indicated by survey results). These entities are also closer to producer communities in the supply chain than roasting companies themselves, and therefore, may be more aware of producer needs.
  • Form roaster partnerships to increase buying power when dealing with trading partners. In doing so, smaller roasters will leverage their ability to request sustainability related information about the green coffee they are buying from these trading partners, which they feel that they are not able to do when buying independently. Roaster partnerships will also increase representation of small-scale roasters in the sustainability dialogue to match the true extent of their presence in the industry.
  • Utilize third party sustainability assessment companies, if possible. Although their services come at a cost to the roaster, these companies seem to be the most helpful partners in designing and/or measuring metrics.

Industry groups:

  • Use influence wisely by taking the perspectives and challenges of smaller-sized roasters into account in efforts of sustainability criteria standardization. A standardized list of metrics will facilitate collaboration and benchmarking in the coffee sector, but further excluding smaller roasters from the sustainability dialogue will lead to the creation of unrealistic and ineffective sustainability criteria.
  • Dedicate resources to researching data collection/management solutions for roasters, considering this was the main barrier to measuring sustainability indicated by key actors. Creating and improving data management systems and technologies will help advance sustainability measurement in the coffee sector.
  • Explore ways to make sustainability assessment companies more affordable so that smaller roasters who have limited financial resources can take advantage of their tools and services.

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Pfeiffer, Taylor (2019). Methods and Challenges of Sustainability Measurement for Small-Scale Coffee Roasters. Master's project, Duke University. Retrieved from https://hdl.handle.net/10161/18393.


Dukes student scholarship is made available to the public using a Creative Commons Attribution / Non-commercial / No derivative (CC-BY-NC-ND) license.