Specialty coffee making an impact

Despite a recent surge, the world market price of coffee has been at a low level for years. This has led to even lower wages for smallholder farmers, who are often living in rural, low-income areas and already struggling to support their families.

At the same time, the ‘specialty coffee’ market came into being a little more than 20 years ago. Specialty coffee is about maintaining a keen focus on standards and excellence from start to finish. The focus is no longer on getting the cheapest or easiest caffeine fix, but it’s about the enjoyment of the unique and various smells and flavours. The difference in quality is clear and as a result, coffee shops that serve specialty coffee are no longer a rarity, but a worldwide phenomenon.

The two founders of Oikocredit partner Caravela Coffee, Alejandro Cadura and Giancarlo Ghiretti, recognised this development when they founded their ‘responsible coffee trading’ company around 20 years ago. They saw it as a great opportunity for smallholder coffee farmers in Latin America. Caravela stood out to Oikocredit because it is not only focused on the quality of the coffee but on the social impact of the farmers and their communities. They believe that the standards for coffee should not only be higher but also the wages and working conditions of the farmers.

Caravela uses direct trade principles, bringing together the specialty market and smallholder coffee farmers. It now works closely with around 4,000 smallholder farmers and their communities in eight Latin American countries to source high-quality coffee which it then sells to specialty coffee roasters in more than 25 countries. 

Caravela observes the market and passes on information about popular varieties and preparations to the producers. The coffee farmers, in turn, receive various training courses, technical support and analyses from Caravela in order to improve the quality of their coffee which they can then sell at a higher price. This support is vital given the challenges coffee farmers face, such as fluctuations in coffee prices, natural disasters and crop diseases. Equal opportunities, social care and inclusion all play an important role in the process.

In addition, Caravela’s work offers new job opportunities – especially for young people who often ask themselves whether they can stay in the country and whether the labour-intensive and risky work in the field is worthwhile at all.

To support and expand Caravela’s work, Oikocredit took an equity stake in the company in 2019. The positive impact that the company has on the lives of smallholder coffee producers in Latin America makes it a perfect match for Oikocredit.

Want to know more about Caravela and their impact? Join us on Thursday 24 June from 19:30-20:30 CEST for an online event with the founders of Oikocredit partner Caravela Coffee to learn more about the realities faced by coffee producers and how Oikocredit’s financing is supporting the coffee sector. Register here: Registration form - Oikocredit International