- Certifications communicate that certain ethical, environmental, or quality standards have been when producing and sourcing coffee
- But as more certifications are launched, it’s important to ask if we are reaching a point of diminishing returns
- Certifications already pose a challenge for some farmers – and many may be wondering if there is a systemic issue to address
OVER THE last few years, new coffee certifications have been launched with increasing regularity.
Fair Trade, Organic, Rainforest Alliance, UTZ (now part of Rainforest), Bird Friendly, and 4C (Common Code for the Coffee Community) are some of the most well-known names in the coffee sector. Consumers have learned to look out for them when searching for sustainable coffee, and coffee producers have largely accepted them as a way to access new markets with higher prices.
But as more certifications enter the market, it’s become difficult for producers and consumers to keep up with what each label means and which ones hold more value.
These certifications cover various new and often niche sustainability practices. With the market becoming saturated with these labels, is there a risk that the value of certifications is experiencing diminishing returns?
Certifications compete against one another
Before we go any further, it’s important to consider certifications through the lens of the market they operate in.
Firstly, we have to recognise that there are a finite number of businesses that would apply for these certifications. Many of these also entail a cost – which creates a competitive marketplace.
As such, as more certifications are released, the marketplace becomes saturated. An overabundance of new labels can confuse consumers and possibly even dilute the intention behind them.
“If more suppliers pay for certifications, or the same number of suppliers pay more for a greater number of certifications, and the demand for certified coffee is relatively constant, the price certified suppliers receive will decrease,” says Elizabeth Bennett, PhD, who focuses on labour exploitation in globalised supply chains and serves on the Academic Advisory Council to the United Nations Forum on Sustainability Standards.
“And if buyers believe consumers cannot differentiate labels, they may purchase the most affordable certified coffee.”
As Elizabeth says, affordability is also a factor – and as the market becomes increasingly competitive, a race to the bottom becomes more realistic. This can then result in a shift in sustainability standards – possibly even diminishing certifications’ impact or meaning.
How important are certifications as a marketing tool?
As mentioned above, the growing number of certifications in the coffee industry also has an impact for the end consumer.
When there are a smaller number of certifications, they are more recognisable and potentially more impactful as a result. Too many labels and certifications can confuse consumers.
Elizabeth points to research that highlights consumer “label fatigue” and “decision paralysis” from the need to constantly update knowledge about certifications.
“At least one study has found that some consumers actively resist taking in new information because it has the potential to disrupt their narratives and challenge their justifications for habitual behaviours,” she says.
On the supply side, research suggests that many companies, brands, and nonprofits often make grand claims with few efforts to achieve them or back them up with evidence. This practice undermines the legitimate efforts of others in the eyes of consumers.
“From the perspective of the most rigorous certifications, this news is devastating,” says Elizabeth. “Certifications can’t differentiate products when consumers are too overwhelmed and brands are too loose with their claims.”
In addition, there are different pillars to sustainability: economic, environmental, and social. Another potential issue with certifications is that consumers can mistakenly believe that if a product has some sort of sustainability label, it is an “ethical product” by default.
However, it’s entirely plausible for a product to have a social responsibility certification while ignoring issues like deforestation or pesticide use, for example.
“Consumers need to understand that certification isn’t a seal of ethical practices or quality, it just means that someone paid for a certification,” says Luisa Mejia, founder of Cafe del Cielo Sustainable Coffee Farms in Colombia.
“Why should companies who truly produce with a positive impact pay more by acquiring certification? It’s like they’re being taxed for good practices. It should be those who have bad practices who pay a fine.”
Voluntary vs. mandatory
Having said that, awareness of the environmental issues the coffee industry faces is greater than ever before, and the rise in the number of certifications may simply be a response to that. This reflects an increase in sustainability efforts and provides assurances to consumers that all the bases are being covered.
However, the argument that more certifications are a sign of improved sustainability practices is clearly reductive. The reality is that there are various issues in obtaining, regulating, and enforcing these certifications.
Nevertheless, there is also an argument that the increase in visibility and pressure means that certifications are increasingly embraced into wider legislation and governance – considering the EU’s Corporate Sustainability Due Diligence proposal, for instance. The idea that a more active market makes it difficult to ignore certifications does have credit.
However, Elizabeth says that the mechanisms of the overall marketplace still leave something to be desired.
“Research clearly suggests that certifications are falling short of their intended objectives,” says Elizabeth. “So the question is not whether or not certifications can be impactful, but how we can change them so that they are as impactful as possible and at the same time invest in other strategies that will be more successful.”
For many, “change” means bringing certifications into a mandatory framework for producers and buyers to operate within. However, until this becomes commonplace, it will be important to recognise the value of voluntary certifications – but to exercise scrutiny nonetheless.
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