Sustainability Strategies in Coffee Industry Under Scrutiny
The global coffee industry is facing significant challenges as prices have reached the highest levels in approximately 50 years. Arabica coffee prices soared to an unprecedented $4.40 per pound in February 2025, mainly due to climate disruptions affecting Brazil, which accounts for 35% of global coffee production. This situation has led to a severe drop in coffee inventories worldwide.
The Coffee Barometer 2026 report indicates that despite numerous sustainability commitments, systemic reforms have not been realized. 'Two decades after the first Coffee Barometer report, producer incomes still fall below living income benchmarks, and climate vulnerability continues to deepen,' the report states.
According to Sjoerd Panhuyse, the report's lead author, the focus has shifted from core issues like hunger in coffee regions to consumer concerns about retail prices. Current sustainability strategies are criticized for not adequately addressing the fundamental problems faced by smallholder farmers, such as low farmgate prices and limited labor availability.
The report highlights that while voluntary standards like Fairtrade and Rainforest Alliance exist, they have not driven the necessary structural changes. In Latin America, only 17% of farmers are certified sustainable, yet the region accounts for 78% of certified coffee production globally. In contrast, Africa has 75% certified farmers but only 13% of certified coffee production.
Mandatory regulations are emerging as a potential solution, with regions like the European Union and the United States implementing due diligence and forced labor regulations. However, the report cautions that these regulations can shift power dynamics along the supply chain, leading to unintended consequences.
Major coffee companies are involved in multi-stakeholder sustainability initiatives, yet significant data gaps persist due to voluntary disclosure practices. The report calls for mandatory price transparency and enforceable living income benchmarks to effect real change in the sector.
