Leading Colombian coffee exporter expands mandate to strengthen farming communities
Offering sustainability and a higher standard of living to small-scale farmers and indigenous coffee growers in Colombia through transparent pricing and specialized agricultural certifications
Bogotá, Colombia, 29 June 2020 – Colombian coffee exporter Lohas Beans has joined Business Call to Action with a commitment to expand their suppliers by 60 percent, from 22 to 35 coffee grower associations and support them in acquiring organic certification by 2022. Lohas Beans will also invest in training to improve production quality and guarantee a minimum monthly income increase for small-scale farmers.
BCtA aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that engage people with less than US $10 per day in purchasing power (in 2015 dollars) as consumers, producers, suppliers and distributors. It is supported by several international organizations and hosted by the United Nations Development Programme (UNDP).
Most of the 500,000 coffee growers in Colombia live on incomes that barely cover their production costs. Indigenous and isolated farmers face economic barriers including unclear payment systems from purchasers, low international market prices, and a comparatively low rate of production for high-value speciality beans. Despite being the world’s third-largest producer of coffee, Colombia is ranked only 15th for organic coffee production.
Lohas Beans purchases organic coffee directly from producers and associations of small farmers and indigenous people who live in relatively isolated regions with low income. Coffees that are certified as organic, Fairtrade, or Rainforest Alliance earn a premium over standard coffees. That’s why Lohas Beans is committed to expanding the certified coffee trade to increase the financial benefit for low-income coffee growers. The company’s transparent price mechanism also allows all members in the value chain to participate in the profits generated by these organic premiums.
The company pays its coffee growers a premium of 20 percent above domestic market price for these certified organic beans. In 2018, these premiums totalled more than $2 million. The company also offers advance payment and empowers producers to understand the market price dynamics for themselves.
“Lohas Beans began our operation in organic coffee when this was a niche market. Today organic coffee is not just a niche, but a trend with high demand. Our position as the market leader of organic coffee in Colombia is key to continuing our growth and realizing profits for the growers who work with us,” said Juan Pablo Campos, Founding Partner of Lohas Beans.
The company’s two-year plan focuses on enhancing relationships with farming communities to improve production quality and sustainability.
Beginning in 2020, Lohas Beans will train four local coffee associations to improve the quality of their coffee from 82+ to 84+ on the SCAA scale. This two-point increase represents a value of US $0.05 per pound, which will offer greater returns to both Lohas Beans and the growers themselves.
When quality reaches the 84+ target, Lohas Beans will work with four associations to build an indicator of the growers’ monthly income. By 2022, they will guarantee a minimum monthly income of at least 70 percent (around US $625) of the associations’ members through the direct purchase of organic coffee beans.
As the Lohas Beans network expands to 35 local coffee associations, it will place emphasis on empowering women. Men currently outnumber women nearly four to one in Colombian coffee cultivation. Lohas Beans will encourage each of its new partners to include at least 30 percent women in the production chain to be eligible as a supplier.
“Lohas Beans’ focus on gender parity, fair pricing, and enhanced training opportunities for low-income coffee growers demonstrates how inclusive business values can contribute to not only a better industry, but also to a better society,” said Luciana Aguiar, Head of Business Call to Action.
BCtA membership does not constitute a partnership with its funding and programme partners, UNDP or any UN agency.
About Lohas Beans: Since 2011, Lohas Beans has been Colombia’s leading player in the specialty coffee export segment. Its supply base comprises 22 coffee associations representing 1,500 small-sized producers. Since its creation, Lohas Beans has established a business model that generates impact on the communities in which it works. Lohas Beans is a B-Corp certified company, and has recently become a vehicle to realize co-investments of buyers and roasters in some projects designed to improve the quality of the coffee and the standard of living of the growers.
About Business Call to Action (BCtA): Launched at the United Nations in 2008, BCtA aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that offer the potential for both commercial success and development impact. BCtA is supported by the Dutch Ministry of Foreign Affairs, Swedish International Development Cooperation Agency (Sida), Swiss Agency for Development and Cooperation (SDC), UK Department for International Development (DFID), and hosted by the United Nations Development Programme (UNDP). For more information, please visit www.businesscalltoaction.org.