#011 - Pay the Producers, Not the Consultants. About Certification.

Coffee is one of the most valuable commodities. It is said to be a $130 billion market that employs around 25 million people. Frankly, we don’t know the number. 

It is a flow from developing to developed countries. And consumers have the power. Most of the investments on production are done upfront and take 3 to 5 years to turn into positive cash flow. Once producing, farmers will sell for any price. So, most of the sensitivity to price is on the demand side.

Meanwhile, producers have real problems. Poor roads. Spoilage. Cost of capital. Floating prices. Shortage of labour. Lack of working capital, technology and infrastructure.

Under this scenario, the theme from certification sounds great. But it is just too shallow.

Certification became an expense to developing countries - and a revenue to developed countries. Moreover, its impact is limited, since it is concentrated in mass roasters, which tend to buy commodity coffee and pressure the entire value chain. So, it is effectively paying consultants rather than producers and employees. 

From a small producer’s perspective, certification is economically (barely) viable and only for higher value added specialty coffee.

Consumers can achieve a larger impact by buying specialty coffee rather than certified coffee. High quality coffee simply demands more attention to details, respect for the environment, time, labour and cleaner infrastructure.

But, what is the real impact of certification?

The logic is simple. To sell into the "conscious" segment of the market (such as Nespresso) you need the certificate. To get the certificate, you need to comply with standards written in Geneva or New York or Bonn. To prove compliance, you hire auditors. The auditors work for certification bodies. The certification bodies are almost all based in developed countries. The money flows from farmers to well-paid professionals.

Below, there are a brief research and estimates about the largest certification companies:

• Rainforest Alliance (New York, USA)

  Direct employees: ~730

  Average compensation: $100,000–$112,000 USD

  Maximum: ~$503,000 USD 

• Fairtrade International (Bonn, Germany)

  Direct employees: 90

  Average compensation: $60,000–$92,000 USD

  Maximum: $216,000–$270,000 USD

• 4C Services (Cologne, Germany)

  Direct employees: 21–32

  Average compensation: $65,000–$92,000 USD

  Maximum: $162,000–$216,000 USD

• Ecocert (L'Isle-Jourdain, France)

  Direct employees: 1,500–2,000

  Average compensation: $49,000–$81,000 USD

  Maximum: $324,000–$432,000 USD

• Control Union (Zwolle, Netherlands)

  Direct employees: 5,000+

  Average compensation: $54,000–$86,000 USD

  Maximum: $216,000–$324,000 USD

• SGS (Geneva, Switzerland)

  Direct employees: 99,500–100,000

  Average compensation: $103,000–$137,000 USD

  Maximum: ~$8.9 million USD

• Bureau Veritas (Paris, France)

  Direct employees: 81,000–84,000

  Average compensation: $54,000–$86,000 USD

  Maximum: ~$4.75 million USD

• Intertek (London, UK)

  Direct employees: 43,000–44,000

  Average compensation: $56,000–$88,000 USD

  Maximum: ~$8.2 million USD

• TÜV Rheinland (Cologne, Germany)

  Direct employees: 26,000–27,000

  Average compensation: $59,000–$92,000 USD

  Maximum: $432,000–$648,000 USD

• DNV (Høvik, Norway)

  Direct employees: 15,000–15,400

  Average compensation: $73,000–$110,000 USD

  Maximum: $675,000 USD

These are sophisticated, often publicly traded or foundation-backed entities. The standards they enforce are mostly reasonable on paper. But the enforcement mechanism is for the poor to pay the rich in exchange for validation. 

A farmer in Ethiopia or Honduras wanting Rainforest Alliance certification might spend $3,000–$8,000 on the initial audit, plus annual fees, plus the time of staff who could otherwise be picking coffee. Fairtrade certification is similar—cooperatives routinely complain that the paperwork and inspector visits eat into the very "fair" premium they're supposed to receive. 

There is very limited real impact.

Our case is that we should import the framework from impact investing - not the framework from auditing companies.

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Coffee Market Snapshot:

• Coffee Futures C Price in NY: -5.06% weekly, at 296.25 cents/lb.

• Coffee Price in Brazil's B3 in USD: -4.8% weekly, at 385.00 USD per 60kg bag.

• BRL/USD fx rate: +0.5% weekly.

• Proxy of 20' container freight prices from Santos to Rotterdam: down ~7% weekly.

Highlights:

• Starbucks reported its best quarterly results in two years, highlighting strategic menu innovations and operational efficiencies amid shifting consumer preferences for premium coffee experiences.

• De’Longhi achieved record 2025 results, driven by strong demand for home coffee machines, reflecting a consumer shift toward at-home brewing for consistency and convenience.

• Nestlé's new CEO revealed a personal habit of consuming 8 cups of coffee daily, underscoring executive-level endorsement of high coffee intake amid broader industry discussions on health and productivity.

• U.S. coffee consumption reached 66% daily among Americans in 2025, up 7% from 2020, but Starbucks' market share fell to 48% as consumers favored rivals like Dunkin' and drive-thru chains.

• Laird Superfood acquired Navitas for $39 million in December 2025, a strategic M&A move to expand in plant-based and health-focused coffee alternatives.

• Nueva Vizcaya, Philippines, allocated ₱5.7 million for coffee industry enhancements, a governmental initiative to boost local production through technology and climate resilience.

• Starbucks announced free coffee giveaways on February 9, 2026, as a strategic promotion to drive traffic and introduce new brews amid competitive pressures.

• India's 2026 Budget withdrew duty concessions on imported coffee machines, potentially increasing costs for machine-brewed coffee in cafes under new governmental fiscal rules.

• U.S. tariffs on coffee-producing countries were discussed, with exemptions confirmed, providing strategic relief to importers and stabilizing supply chains for 2026.

• Home coffee routines in 2026 emphasized speed and consistency, with consumers prioritizing durable, easy-to-use equipment amid hybrid work schedules.

• Brazil's Conab’s first official survey (released February 5-6, 2026) forecasts a record 66.2 million 60-kg bags (processed), up 17.1% from the 2025 cycle. If confirmed, it would exceed the prior record of 63.1 million bags in 2020; private estimates (e.g., Hedgepoint, Safras & Mercado, Itaú BBA, Sucden) range higher at 69-75 million bags for the 2026/27 cycle.