A Roadmap For Sustainable Coffee Production

Thursday, July 11th, 2024

APFI spoke with Sara Mason, Head of Sustainability Engagement for Coffee at sustainable food ingredients company ofi about sustainable coffee production.

Ofi’s initiatives are designed to support consumer health, farmer welfare, and environmental sustainability. The company’s Coffee LENS program, launched in 2020, aims to improve the livelihoods of coffee farmers and the ecosystems of coffee-growing regions.

The program aligns with the UN Sustainable Development Goals and has led to increased coffee traceability in 18 countries, support for over 100,000 farmers, and soil health improvements across 34,000 hectares.

In this exclusive interview, Sara Mason delves into the heart of Ofi’s mission to harmonise the well-being of consumers, the livelihoods of farmers, and the health of our planet. We discuss the launch of the Coffee LENS program to the achievements in coffee traceability and soil health improvement across multiple continents.

Q. What are the key objectives and targets of ofi’s Coffee LENS 2.0, the new 2030 sustainability roadmap for ofi’s coffee business?

Sara Mason (SM): Our new sustainability goals under Coffee LENS 2.0 represent the next chapter in our long-term ambition to build more resilient and regenerative coffee supply chains, with bigger and bolder targets.

By the end of the decade, we are aiming to cut supply chain emissions by 30 percent, help enable 20,000 farmers to earn a living income, expand our human rights programs, and apply regenerative farming practices to half a million hectares in key coffee growing landscapes.

Ofi has established the following four focus areas for its coffee business up to 2030:

  • Improving farmer livelihoods: Expanding segmentation models to deliver customised support to 300,000 farmer households, with 20,000 achieving a living income.
  • Empowering communities: Implementing Child Labor Monitoring & Remediation Systems (CLMRS) in all high-risk supply chains with 50,000 children benefiting from educational support to protect human rights.
  • Accelerating decarbonisation: Scaling up climate-smart actions and resource efficiency to reduce on-farm GHG emissions by 30 percent and by 50 percent in processing plants.
  • Restoring coffee landscapes: Working towards regenerative production systems to build Natural Capital while embedding geo-spatial tools in deforestation monitoring systems.

Our targets are ambitious, but our history of effective actions for farmers, rural communities, climate and nature, as highlighted in the latest Coffee LENS impact report, shows that we understand and can develop effective strategies to simultaneously address the most pressing challenges in the industry.

Q. How does ofi measure and report on its progress and impact in reducing greenhouse gas emissions, improving farmer livelihoods, and restoring coffee landscapes?

SM: Technology plays a crucial role in our effort to measure and report our sustainability impact and progress.

For instance, AtSource, our sustainability management system, features a Digital Footprint Calculator that allows customers to calculate their total carbon footprint, by measuring 28 different metrics across the supply chain, from farm to processing and final delivery.

We measure the carbon emissions associated with factors like land use change, fertiliser, electricity, machinery and transportation, as well as how much is sequestered in soil and trees.

Every three years, the data is verified by an independent party for compliance. This data can be used to assess the impact of interventions such as decarbonisation and agroforestry projects.

Specific to farmer livelihoods, we utilise a mix of quantitative and qualitative data such as from household surveys and partner projects to track progress and assess the impact of our programs.

This is accompanied by data from our Olam Farmer Information System (OFIS), which captures data from the first mile of the supply chain, such as the farmer’s name, farm location, training attendance, and locations of nearest schools and other social infrastructure.

Q. What are some of the innovative solutions and technologies that ofi is using or developing to enhance its coffee sustainability programs?

SM: At ofi, we have developed dedicated tools and innovative solutions to advance climate action and improve transparency and traceability in our supply chains, while ensuring that coffee farmer livelihoods are well looked after as they all contribute to the success of our sustainability programs.

For example, we use our award-winning Carbon Scenario Planner (built into AtSource) to model the most cost-effective way to reduce our carbon footprint. This allows us to better target emissions hotspots in our joint supply chains, and work with farmers and partners to explore opportunities to lower emissions and work towards net-zero targets.

Also in our AtSource suite of tools, our Carbon Sequestration Monitoring tool was created by our climate action experts in collaboration with Google geospatial partner NGIS to measure carbon gains and losses across supply chains.

It uses satellite imagery and machine learning to track changes in forest cover and carbon stocks, helping us identify areas at risk of deforestation and prioritise our conservation efforts.

Our Living Income Calculator allows us to estimate the proportion of farmers living below or above the living income threshold to identify income gaps and poverty hotspots across our supply chain.

It is also able to simulate the impact of various income improvement scenarios by applying different income drivers, such as quality premiums or income diversification.

From these scenarios, we can make sure our interventions are adding up to a living income for farmers. Since its pilot in 2021, this Calculator has helped us design income generating strategies for 20 farmer groups across Indonesia, Guatemala, Honduras and Uganda.

Q: How does ofi collaborate with its customers, suppliers, farmers, and other stakeholders to co-create and implement its coffee sustainability initiatives?

SM: We recognise that we cannot deliver progress and impacts alone. Listening, engaging and collaborating with the private and public sectors and civil society, directly and through our participation in multi-stakeholder forums, is essential to making real and tangible progress to achieve our own goals but also to tackling the major social, environmental and economic challenges collectively facing us.

We actively engage farmers, partners and customers to explore ways where we can make a real difference. We and our customers have the benefit of the data and insights visible on AtSource to inform action plans and monitor progress, and inspire partnerships where we can create a bigger impact through collaboration.

One example of our multi-stakeholder partnerships is in Indonesia, where we are partnering with the United States Agency for International Development (USAID) on LASCARCOCO, a USD 8.2 million initiative that aims to help 6,500 cocoa and coffee smallholder farmers increase their yields by 25 percent.

We have also secured funding from the Asian Development Bank to support 7,000 coffee farmers in Sumatra through activities including agronomy training, nursery establishment, the provision of tools and farm supplies.

Q. What are some of the best practices and learnings that ofi has gained from its coffee sustainability journey so far?

SM: Our relationships in farming communities and investment in digital tools generates the insights we need to deliver meaningful impact.

For example, because we know that providing equal support to every farmer does not yield equal results, so we are applying a segmentation model to deliver tailored support. This starts with a simple conversation with farmers to understand their individual situations.

Farmers are then categorised based on factors such as farm size, yields, skills and willingness to invest, so we can better understand the diverse challenges and opportunities that exist within our farmer network and assess living income gaps.

Our local team of agronomists then deliver tailored interventions according to the different producer segments. This exercise draws on a combination of simulations performed using our living income tool and lessons learned from 10+ years’ experience in the field, as well as involvement in sector initiatives like the IDH Living Income Roadmap.

Since developing our Living Income Calculator in 2021, it has been calibrated to design income generating strategies for 20 coffee farmer groups across Guatemala, Honduras, Indonesia, and Uganda.

Q: What are the future trends and opportunities that ofi anticipates or envisions for the coffee industry in terms of sustainability?

SM: Consumers are increasingly discerning about their coffee, a trend that is apparent especially in more mature consumption markets like Singapore. Beyond just a pick-me-up, more drinkers see coffee as ‘small luxuries’. They are willing to indulge in higher quality, unique offerings that carry a positive story for the people and environment.

We expect that this will boost demand for specialty coffee, which tends to fetch more premium prices, in turn supporting farmer profitability. This presents an opportunity for coffee producers like Indonesia, where most of its Arabica coffee have already been categorised as specialty coffee.

On the production front, we expect to see continued momentum for the adoption of sustainable farming practices and regulation. By the end of 2024, any company that either places products on or exports from the EU market is required under the EU Deforestation Regulation (EUDR) to carry out due diligence to ensure that any products fall within its scope. ofi’s history of working to end deforestation in cocoa and coffee smallholder supply chains — through traceability, promoting agroforestry and advancing sustainability programmes — will help ofi and our customers to meet the EUDR obligations ahead of them becoming enforceable by the end of December 2024.

We are using both GPS points and polygons to progressively map farms – with over 960,000 coffee and cocoa farms mapped by the beginning of this year — so that we can accurately assess the history of deforestation, issue alerts to country managers, measure land-use change emissions — and monitor or remediate through enrolment and training of farmers in sustainability programs.

Looking ahead for ofi, we will continue to innovate and improve our tools and approach to working with our farmers, partners and customers.

By focusing on four interconnected impact areas — Prosperous Farmers, Thriving Communities, Climate Action, and Regenerating the Living World — we aim to offer customers food ingredients and solutions that are naturally good for consumers, farmers, and the environment, and lead the way towards a more sustainable and thriving coffee sector.