A recent study conducted with coffee traders, roasters, and retailers in Melbourne has revealed the significant role retailers play in driving sustainability in the coffee supply chain.
While previous research has focused on producers and consumers, this study, led by a team from RMIT University in Melbourne, highlights how Australian retailers can influence both ends of the supply chain, from supporting sustainable practices at the farm level to promoting sustainability with consumers.
The respondents included local representatives from multinational coffee traders, Australian coffee roasters, café operators, and a retailer specialising in pre-made coffee drinks. The research aimed to explore how these businesses engage with sustainability and support environmentally friendly practices, including shade-grown coffee farming.
The study found that retailers, particularly large multinational traders and independent roasters, are well-positioned to support environmental, social, and economic sustainability at origin while undertaking initiatives at the consumer end of the supply chain.
This is because large multinational traders and independent roasters were found to be more likely to operate via a ‘purpose driven business model’ – a model based on having a positive social and environmental impact.
All five of the multinational traders, who source and distribute green coffee beans in large volumes, and eight of the 11 roasters, apply the ‘relationship coffee model’, a direct-trade approach aimed at building long-term relationships with coffee producers. This model is designed to increase transparency in the supply chain, allowing more financial value to reach farmers, though logistical and governance challenges often prevent direct transactions.
Quality and price were the most common determinants for coffee purchasing decisions, with sustainability impacts and long-term relationships also playing a key role. Most respondents indicated that their commitment to sourcing high-quality coffee indirectly supported shade-grown coffee, as these farms often produce the best beans.
Additionally, respondents were involved in social and economic initiatives at the origin of the coffee supply chain, such as providing agronomy support, microloans, and gender equity projects.
While smaller cafés were less involved in sustainability initiatives, larger traders and roasters played a crucial role in driving positive environmental, social, and economic outcomes in collaboration with farmers and other supply chain actors.
The paper, The Critical Role of Retailers in Leveraging Sustainability of a Global Supply Chain, is available to read in full here.
