Fair trade vs. direct trade coffee: What’s the difference?

While not a new concept, the specialty coffee industry has embraced “direct trade” in the last decade years. The term reflects a farm-to-table ethos in a product that has to travel thousands of miles from where its grown to reach consumers.

For roasters, buying direct can mean regular trips to the farm from where they buy coffee. This allows them to give farmers special instructions for how the beans are grown, harvested and dried. It also lets them spotcheck whether workers are being treated fairly and paid a decent wage.

Direct trade can also mean sourcing from suppliers who buy coffee from farmers whom they trust and have good relationships.

“There are usually some intermediaries in that transaction,” said Kim Elena Ionescu, who studies sustainability at the Specialty Coffee Association. “It’s usually not as simple as the roaster flying down to put cash into the producer’s hands.”

At its core, direct trade is meant to give farmers a better price for better beans.

In direct trade, buyers pay a premium to producers for high quality green coffees, which motivates farmers to keep growing higher quality beans, said Bruce Wydick, professor of economics at the University of San Francisco and author of the “The Taste of Many Mountains,” about the impacts of fair-trade coffee in Guatemala.

For farmers, it’s an opportunity to see which growing, harvesting and processing methods can help their beans command a higher price from buyers and use these techniques to earn more money, Wydick said. “With direct trade, there’s more potential for mutually beneficial relationships.”

Direct trade is a different approach from fair trade coffee, in which local growers pool their beans together so that beans, regardless of quality, are sold at a minimum set price.

“It doesn’t allow growers to create a niche to capture more value added to themselves,” Wydick said.

The current fair-trade price for conventional, washed Arabica is $1.40/lb, whereas specialty coffee can fetch 10 times at coffee judging competitions.

Farmers whose beans place first become “rock stars” in the specialty coffee world , said Chris Nolte, co-owner of Per’La. It’s not unusual for farmers of prize-winning beans to see their harvests get bought out for years in advance.

“It’s really brought a spotlight to the farmers,” Nolte said.