Sustainable Coffee Supply Chain – A Monitoring

Sustainable Coffee Supply Chain – A Monitoring-Approach
Bastian Behrens, Nadine Dembski, and Georg Müller-Christ
Department of Sustainable Management, University of Bremen, Wilhelm Herbst Str. 12, 28359 Bremen, Germany
E-mail: [email protected]
Abstract:
First grade coffee beans are sensitive goods. This is due to
the fact that their reproduction is jeopardized by ecological
and social depletion in the countries of production. The
continued availability of coffee can thus only be guaranteed
if all actors of the coffee supply chain act in a sustainable
way. That is, the inherent rules of each actor working in the
value creation chain needs to be preserved and the ability of
reproduction of the resources needs to be conserved.
I. INTRODUCTION
In the discussion about sustainable development these
coherences are often debated having conflicting goals
between single actors and are commonly reduced to the
contradictions of ecological, economic and social goals.
The understanding of conflicting goals is based on the
fact that they can be solved according to the conflict
terminology [1]-[3]. Opposed to this idea is the
perception that the conflicts created in the context of
sustainability are not temporarily solvable, but instead are
antagonisms which need to be seen as contradictions and
need to be treated as such. Based on the different
perceptions of the interaction of ecology, economy and
social responsibility, an application of a monitoring
concept is presented in this work. This paper shows how
one can deal with the controversial goals which are
strived by the actors. Coffee, as a renewable resource, is
mainly cultivated in South countries and processed in
North countries and offers a wide spectrum of
controversial requirements. The value creation chain of
coffee is thus used as an example application.
task. The realization of this intent is only possible in a
few selected cases. It is not the main purpose of the
science of sustainable development to demonstrate these
rare win-win-win situations. Rather, the point of interest
is to analyse how ecological, economic and social goals
can be attained even if such controversial interrelations
exist.
A. Inherent rules of the dimensions of sustainability
By showing the inherent rules of the dimensions of
sustainability the contradictions of the goals can be
clarified:
- The lasting existence of nature requires an operative
reproduction process on the basis of the laws of
nature.
- The lasting existence of the economy requires a
steady growth due to the inherent rules of the
financial markets.
- The lasting existence of society demands more and
more social equity and justice in complex processes
of exchange [5].
The understanding of resource exchange relations
reveals immanent dependencies of the three dimensions
of sustainability [6]. Nature is not only a resource for the
economy but also for our society. The economy generates
income as well as products with these resources and can
be seen as a source for the striving of our society.
Nature as a
Resource
The goal of this commitment is to present an approach
to the improved handling of the controversial goals of the
sustainable value creation chain of coffee, using process
monitoring as its foundation. At first the contradictions
are explained and the monitoring process is introduced as
a method to cope with these multiple contradicting
objectives (chapter 2). Subsequently a sustainable coffee
supply chain is developed with the resource perspectives
in mind (Chapter 3). The monitoring process for the value
creation chain of coffee is presented exemplarily in
chapter 4. Finally, the results of using the proposed
monitoring process to solve the conflicting goals will be
presented in chapter 5.
II. SUSTAINABILITY AND CONTRADICTIONS
A three dimensional comprehension of sustainability in
economy, politics as well as in science is well established
[4]. The ecological, economic and social dimensions are
emphasized differently though. Unfortunately, difficulties
emerge with the implementation of the general principle
of sustainable development. This is due to the fact that
achievement of all the objectives of the three dimensions,
environmental protection, social equity and economic
success at the same time has proven to be a complicated
Society as a
Resource
Economics
as a
Resource
Figure 1: Resource Exchange [5].
Nevertheless, there is no exchange of resources from
society and economy to nature. Considering the
restrictions that the dimensions of sustainability apply to
each other the actors of the economy for example can’t
maximize their profits and stick to their economic basis.
The renewal of the resources goes at the expense of the
profit [7]. Both goals can’t be maximised at the same
time. Prioritising the first always has a decrease of
importance of the second as a consequence. A logical
contradiction can be observed. To stay capable of acting
and taking decisions despite the controversial
requirements in the context of sustainability, a
constructive handling is important. Hence, not just to
solve the conflicting goals but to go beyond is essential.
B. Concept for a sustainability-monitoring process
A way of approaching the multidimensionality and the
contradictions of the sustainability dimensions is by a
systematic monitoring process [5]. In such an approach
the decisions of the actors concerning their dedication to
do something for the sustainability of the coffee supply
chain are visualised over a certain lapse of time. The
controversial objectives that arise herein are then tackled
by sequencialisation.
Systems behave rational if the impact of their handling
of their own sources is rethought through feedback.
Complex cause-and-effect-chains need to be evaluated ex
ante because the impacts of one’s handling are not
deterministic and a big time lag can occur. The
monitoring process thus enables to visualise decisions in
the context of sustainability. The decisions are allocated
in salutogenetical as well as pathogenetical monitoring
fields which permit to draw conclusions about the
dedication of the actors in the three dimensions of
sustainability. The ideal monitoring process takes place in
four steps [8]:
1. Identification of the dedication for sustainability.
2. Allocation of the dedications to the monitoring
fields.
3. Evaluation: allocation of dedication points.
4. Documentation of the evaluation process.
The synchronicity of controversial requirements as part of
the principle of sustainability is weakened when taking
into account the lapse of time in which the monitoring
process takes place. This is due to the fact that achieving
the goals of sustainability is seen and evaluated as
asynchronous in the time elapsed.
III. THE SUSTAINABLE COFFEE SUPPLY CHAIN
More than 25 million people cultivate coffee
worldwide, and North Americans annually consume an
average of 64 liters per person [9]. Exporters, importers,
agents, roasters, distributors, retailers and a lot of other
actors are members of the chain connecting coffee
farmers and coffee consumers. Coffee is after crude oil
the second most important export good [10]. Several
national economies are dependent on this resource. In
Burundi (Africa) the coffee export constitutes 79 percent
of the entire export. In Ethiopia it represents 54 percent
and in Uganda 43 [11].
A. Exchange relations of resources in the Coffee
Supply Chain
The global coffee supply chain system serves its
different subsystems as a continuous value creating
source.
RER
Actors when
cultivating
RER
Actors when
transporting
RER
Actors when
processing
RER
Actors when
trading
RER: Resource Exchange Relation
Figure 2: The Global Coffee Supply Chain.
Actors when
consuming
The actors of the global coffee supply chain exchange
among each other the material and immaterial resources.
These are for example: coffee berries, coffee beans,
products of roasted coffee, funds in different currencies,
natural energies and resources as well as values and
standards for a good cohabitate and a good collaboration.
If the actors of the coffee supply chain are consistent with
their sources, they receive the resources they need for self
preservation in return. The actors of the coffee supply
chain - respectively their subsystems - are dependent on a
constant inflow of resources. This is necessary to stay
competitive, to achieve one’s goals and to serve social
purposes. The actors, as representatives of their
respective subsystems, need to develop the sensitivity
required for long term exchange relations to last. This
includes an understanding for the inherent rules of the
other participating actors, their subsystems and the
transferred
resources.
An
existence-threatening
withdrawal of resources can thus be avoided (e.g. the
withdrawal of funds by consumers). In Luhmans words:
„Ein System verhält sich im Umgang mit seinen
Umwelten dann rational, wenn es seine Einwirkungen auf
die Umwelt an den Rückwirkungen auf es selbst
kontrolliert“ [12]. [A system behaves rational in contact
with its surroundings if the impacts of the system on the
environment are controlled through feedback.]
The coffee supply chain becomes sustainable as soon as
the actors feel as a part of a resource network whose
members mutually invest in the continuity of its partners
to ensure their own survival and further development.
Such an act corresponds to the economic rationality. The
following constituted in former times and still is today
the core of the comprehension of sustainability: The
balanced relation of consumption and supplies of all
resources necessary to a system. It was Aristotle who
influenced the European comprehension of keeping house
and goods (oikos) in a provident way. In 1713, the
Saxonian Oberberghauptmann of Carlowitz introduced
the expression sustainability in connection with the
sustainable management of German forests.
The fact that sustainability is nowadays a topic of
conversation again may be derived from the growing
awareness that the resources one depends on will not be
to one's disposal automatically. Accordingly, a coffee
supply chain, whose actors conserve their material and
immaterial sources, invest in the reproduction of the vital
resources and reduce the negative effects on their partners
of the network as far as possible, transforms to a
sustainable coffee supply chain. The result of this is that
the cooperation in this resource network of the coffee
supply chain needs to convert from a market-oriented and
strategic collaboration to a collaboration of partnership.
Examples of market-oriented cooperation are logistic
relations between the consumers and the suppliers and
relations between producers and users. These are
characterised by having few actors, a minimum of
confidence and an incoherent collaboration and control
mechanism which is very close to the market. Typical of
strategic cooperation is that they take into account the
interest of the cooperation partners to maximise the
realisation of their own goals. The cooperation in
partnership is influenced by the market-oriented as well
as the strategic mechanisms. Furthermore they attempt to
balance the existing gap of power between network
partners by applying the principals of fairness. The
interest of sources that are not able to articulate, like the
natural environment and future generations for example,
are also considered in this type of cooperation [13].
RER
Actor 1
other Actors
RER
Actor 1
other Actors
RER
RER
Actor 2
RER
4Cs
Actor 5
Actor 3
RER
RER
RER
Actor 4
Actor 2
RER
?
Actor 5
Actor 3
RER
RER
RER
Actor 4
Figure 3: The Actors of the Coffee Supply Chain and
their Resource Exchange Relations (RER).
A common goal for actors cooperating in a partnership
is the development of a collective good. In case of the
coffee supply chain this collective good consists of
theoretical knowledge about the practical realisation of
exchange relations of resources to guarantee a continuous
production of socio-ecological and economic first grade
coffee products.
B. Collaboration in the Coffee Supply Chain
To generate this collective good, an intensive exchange
between the actors about the inherent rules of their
subsystems is necessary. Normally, only actors involved
in the direct resource exchange are linked to each other.
An authority, that mediates and interconnects between all
actors of the coffee supply chain seems to be missing:
„Da eine solche Managementaufgabe in einem relativ
dynamischen
und
vielschichtigen
Umfeld
zu
bewerkstelligen ist, bedarf es hier trotz aller EDVtechnischen
Automatisierungsmöglichkeiten
eines
„leibhaftigen“ Intermediärs, der einer solchen
Koordinationsaufgabe gerecht wird“ [13]. [Given that
such a management task has to be accomplished in a
relative dynamic and complex environment, an
“incarnated” intermediary is necessary to satisfy such a
coordination task and this despite all possibilities of
automation by computer applications.]
This intermediary could be a non-governmental
organisation. NGO’s are organisations that are formally
structured; organisationally independent of the
government in the meaning that it is not a public
institution; they are usually non-profit organisations
which represent the public interest as a proxy and by the
purpose of lobbying. Further NGO’s are selfadministrated; they gain a portion of their funding by
donations and are supported by volunteers [14].
Figure 4: 4C as an Intermediate NGO of the Coffee
Supply Chain.
The Common Code for the Coffee Community (4C)
that evolved out of an initiative of the German and
European coffee industry is such an intermediary NGO
for the global coffee supply chain. Producers and their
merging, trade unions, NGOs, commercial and industrial
companies as well as their associations and governmental
organisations are participating. In the context of this 4CNGO the actors of the coffee supply chain deliberate on
how to organise the different resource exchange relations
to guarantee the continuity of all subsystems involved.
Until now, NGOs like Oxfam, Greenpeace or the
Rainforest Alliance were primarily focused on the
lobbying role for subsystems of the coffee supply chain
which were not able to articulate or were powerless (e.g.
the natural environment or the coffee farmers). A new
type of NGO arises here – an intermediary management
NGO, which represents everyone and which observes the
welfare of the whole system. On conferences the 4Cmanagement assembles the representatives of all actors.
Together they determine economic, ecological and social
indicators for sustainable coffee and define the
monitoring instances. Gottschick et al. claim: „Hierfür
sollte der Intermediär einerseits mit hinreichenden
Macht- und Fachkompetenzen ausgestattet sein,
andererseits aber auch über breites Vertrauen verfügen,
das zum gemeinsamen Beschreiten ungewisser Wege vor
allem dann zwingend erforderlich ist, wenn die
Kontrollkosten niedrig gehalten werden müssen (...)
Wichtig ist darüber hinaus, dass der Intermediär für die
Vergemeinschaftung
von
Gruppen
wichtige
Kompetenzen eindeutig besitzt. Hierzu zählen Dialogund
Kommunikationsfähigkeit,
Monitoringund
Mediationskompetenzen sowie die Rekursivität als die
Fähigkeit zur Entwicklung von Handlungsstrategien unter
Berücksichtigung der Rückwirkungen auf die Beteiligten
und andere mehr“ [13]. [Therefore the intermediary
should on the one hand possess sufficient leadership
skills and professional competencies, and on the other
hand he should possess large confidence. This is
absolutely necessary to break new and uncertain grounds
together, especially if the control costs need to be kept
down (...). Furthermore, it is important that the
intermediary possesses important competencies for the
collectivisation of groups. This includes dialog ability
and communication skills, monitoring and mediation
competencies as well as the ability to develop strategies,
which take the repercussions on the participants and
others into account.]
IV.
MONITORING OF THE SUSTAINABLE COFFEE
SUPPLY CHAIN
The indicators of sustainability play an important role
for the significance and the transparency of the
monitoring-process. The scientific discussion about the
composition, the selection and the emphasis of the
„appropriate“indicators will not be elaborated here
[8],[15]. Unlike the existing monitoring systems, namely
the syndrome approach [16] and the Need Field
Approach [17]-[21], the presented approach is based on
the monitoring of the dedication for sustainability. In a
first step, the dedication for sustainability is identified.
Afterwards,
salutogenetical
and
pathogenetical
monitoring fields are distinguished which originate from
the psychology of health. The aim of this approach is to
explain which kind of system generates morbid effects
(pathogenetical perception) but also to explain which
health keeping respectively wholesome effects
(salutogenetical view) are produced by certain actions for
a system using system theory. The evaluation of the
dedication for sustainability is a challenge for the
monitoring process and can be seen as the main task of
the intermediary NGO.
A. Identification of the dedication for sustainability
For the identification of the dedication for sustainability
it is necessary that the resource flow within the coffee
supply chain is adequately implemented. Furthermore it
is important that a basic understanding about how the
single sources work exists.
1. The economic dimension - ensure efficiency
To receive the financial resources that are needed for
the future, the actors of the coffee supply chain depend on
improving their efficiency. To attain this efficiency goal
the coffee farmers have to cultivate first grade coffee
berries. The carriers have to transport the coffee beans
fast and safe across the world. The big roasteries of the
industrial countries have the challenge to make coffee
products out of the delivered raw materials and to
advertise those to the customers.
At the end of the chain is the consumer who has to pay
a reasonable price for the consumed coffee product to
assure that all other actors of the coffee supply chain can
also profit. The economic efficiency of the whole coffee
supply chain is long-lasting guaranteed by a continuous
observation of disturbing and encouraging factors. An
example of the coffee supply chain would be a high
unemployment rate of coffee farmers and qualitative lowgrade beans as well as the decrease of the coffee
consumption. All these factors challenge the effectiveness
of the coffee supply chain. If this happens the actors of
the coffee supply chain may face a decrease of the
monetary funds of the consumers (when the quality
deteriorates) or a retraction of the legitimisation by the
society (when high unemployment exists). In return
monitoring fields can be found that have a positive
influence on the efficiency of the coffee supply chain. For
example the investments in research and development
and the investments in further education and in the
product technology of the coffee farmers to achieve a
quality improvement as well as to realise marketing
measures of the coffee industry to increase the sales.
2.
The social dimension – common organising of the
coffee supply chain
In the social dimension of the sustainable coffee supply
chain it is important to conserve the social resource basis
of all participating subsystems. That means a peaceful
habitat and a successful collaboration of all actors of the
coffee supply chain. Each member of the value creation
chain, whether a coffee farmer, a coffee roaster, a retailer
or a consumer should participate in the value creation of
the coffee supply chain according to his workload.
Exploitation, fraud, the exploitation of market power and
the restrictions of access to the market are exemplary
factors which disturb the sustainability in the social
dimension. Justice and equal opportunities, participation,
investments in the development of the coffee farmers, in
the health- and the risk provision, in the compatibility of
professional life and education in the producing
countries, as well as the enabling of realising both career
and family in the industrial countries are positive
exemplary factors that keep the subsystems of the coffee
supply chain socially healthy.
3.
The ecological dimension - conserve nature as a
source
A considerable amount of energies and raw materials
of nature are used along the coffee supply chain. The
cultivation of coffee berries in huge mono cultures, the
processing, the transportation of the beans, their roasting
and their distribution, need resources, like electricity,
diesel, pesticides, fertiliser, water and paper. As a
consequence exhaust gas, waste and sewage are produced
as a by-product. This inevitable consumption of the
natural resources and the environmental pollution need to
be observed and reduced continuously. At the same time
they need to be transferred to the public by instruments of
the environmental and sustainable communication
(explanations, reports, Internet forums and workshops).
The management of most industrial roasters has been
working for several years on minimising the negative
environmental effects and is trying to increase the
ecological efficiency. In this area a lot of improvements
have been achieved. The ecological core problems are
rather up to the actors of the subsystems on the other end
of the coffee supply chain: „Die Monokulturen und die
Aufbereitung der Kaffeekirschen sind mit der
Zerschneidung von Ökosystemen, Reduktion der
Artenvielfalt, Belastung von Gewässern und Boden sowie
Energieverbrauch
und
damit
einhergehenden
Luftemissionen verbunden“ [22]. [The mono cultures and
the treatment of the coffee berries are bound to the
destruction of ecosystems, the reduction of biodiversity,
environmental burden of waters and of soil as well as
energy consumption that cause air emissions].
B. Allocation to the monitoring fields
The actors of the global coffee supply chain can only
achieve their goals and purposes continuously if on one
hand they work as efficient as possible, and if on the
other hand they consider the preservation of other
participating subsystems – their sources. The actors can
only cope with this challenge when they cooperate in
partnership. Therefore an intensive communication
between all participants is necessary. In doing so the
actors are reliant on an intermediary organisation such as
the 4C. In the context of this NGO, representatives of all
actors have agreed upon several indicators for sustainable
coffee. In the following illustration the indicators are
attributed to the salutogenetical and pathogenetical
monitoring fields of the coffee supply chain according to
our models.
C. Allocation of dedication points and documentation
of the evaluation
In this stage of the monitoring process the ultimate
evaluation of the dedication for sustainability takes place.
The dedication observed beforehand is allocated to socalled dedication points. This is accomplished by the
monitoring team. For the coffee supply chain this could
be done by the 4C-NGO because the representatives of
the whole value creation chain are assembled there. The
process of evaluation is vulnerable due to its subjectivity.
It can only get its legitimisation through discussions
within the NGO and through common decisions of the
monitoring team. Thereby the composition of the team,
its scientific as well as practical experiences in the
context of sustainability are important. The ability to
foresee impacts on the supply chain is another important
factor. The experience taken from the evaluation
processes need to be seized, documented and shall then
be incorporated into other monitoring processes.
V. CONCLUSION: HANDLING CONTRADICTIONS
revealed. In this case the monitoring can be used as an
instrument to visualise the contradicting goals in different
decisions, to evaluate them and thus to cope with them.
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