An estimated 20 million farmers and their families produce coffee. Over two thirds of them work on small-scale farms of less than five hectares. Many of these farmers live in poverty, a situation that worsens daily due to the forces of globalisation, with the market dominated by only a handful of multinationals and powerful commodity traders. The insatiable need to make healthy profits goes hand in hand with increased third world poverty - and it is this dynamic that Cafédirect seeks to challenge. 99% of the world's coffee is not fairly traded and as a result millions of growers receive less than 1% of the average retail price of coffee sold in coffee bars.

Cafédirect is a proven and successful model, which aims to balance the business of making money with the business of making lives better. At the heart of its operations are over 1million small scale tea, coffee and cocoa growers and their families, with whom the company works closely to ensure that it delivers the best quality product to hot beverage drinkers in the UK - while at the same time offering producer communities the finances and support they need to evolve from poverty.

Today Cafédirect is the leading Fairtrade hot beverage business in the UK and has blazed the trail for ethical trading since its inception as the first British Fairtrade coffee company in 1991. Cafédirect is sold in all major supermarkets where it must fight for shelf space among some of the giants of the food production world, like Nestle and Kraft Jacob Suchard (manufacturers of Kenco and Maxwell House). In addition, a Cafédirect espresso coffee and Teadirect tea are available in one of the UK's largest coffee shop chain - Costa Coffee.

Sadly, the coffee price crisis has deepened in the past decade, making it all the more important for the company to survive and prosper if it is to make a significant impact.

Cafédirect Mission
'We want to see Fairtrade become a widespread business practice. Fairtrade is not a charity, but a viable trading model that respects farmers as equal partners in a business relationship. It is a simple and balanced fair deal - we purchase quality produce to supply to UK consumers, and in return we offer a decent price for it.'
Penny Newman, Cafédirect Managing Director.

Cafédirect's mission is 'to be the leading brand which strengthens the influence, income and security of producer partners and link them directly to consumers'. Its success is built on the inter-dependence of the company and the producers and their relationships with other organisations.

Fairtrade may still be relatively small when compared to the entire coffee market - just under 2% (June 2002) by volume in the UK, but its impact on growers and their businesses is significant. Cafédirect seeks to provide a benchmark for other organisations, to offer hope to producers and tackle the issues affecting millions of people in developing countries.

What is Fairtrade?
Fairtrade means that growers always receive a fair price for their crops. Fairtrade is regulated through the global Fairtrade Labelling Organisation (FLO). All of Cafédirect's producers are registered with FLO, and the body audits and monitors both Cafédirect and its producers to ensure Fairtrade guidelines are adhered to. FLO operates a license and labelling system - in October 2002 a new international Fairtrade Mark was launched, which has been introduced on all Fairtrade products across 17 countries. [INSERT IMAGE OF FAIRTRADE MARK NEAR THIS TEXT] The Fairtrade Mark is the consumers guarantee that the products meet the high standards required for Fairtrade certification and that farmers around the world have been paid a decent price for their crops.

Cafédirect operates its own unique Gold Standard trading policy which goes beyond the basic principles laid out by the Fairtrade Labelling Organisation. It is the first and only Fairtrade company to run such a scheme. Like other Fairtraders it currently pays on average three times the world price to its growers.

Cafédirect's Gold Standard goes beyond the basic principles of Fairtrade:

• for coffee, if market prices go above the minimum standard Fairtrade price of US$1.26 per pound for arabica coffee and US$1.06 per pound for robusta coffee, Cafédirect pays an extra 10% social premium on top of the market value, which goes directly to the co-operative, to be spent as per members' requirements.

• for tea, a premium is paid on top of the auction price and Cafédirect pays a higher premium than the standard Fairtrade premium.

Cafédirect is also the first and only Fairtrade company to pay additional premiums to producers who provide coffee for the growing organic gourmet and gourmet sectors. These premiums reflect the additional costs to farmers for producing these coffees and ensure they share in the added retail value, which is higher than other coffees.

The Gold Standard also incorporates business partnership programmes - called Producer Support and Development (PS&D) - which are tailor made to suit each organisation. Closely managed with partner Twin through a strong network of contact with every single one of the 22 coffee co-operatives supplying Cafédirect, the programme provides advice, market information, management training and support or any other elements required to grow their businesses.

PS&D has achieved some notable triumphs over the past decade:

• over half of the producer co-operatives supplying Cafédirect are now active exporters to a range of companies. Many of them had never exported at all before working with the company;

• in 2001 Cafédirect staged a mini-trade fair in London for all its producers, to which buyers from other companies were invited along. For many producers this was an essential first contact point for the wider market.

• knowledge sharing remains crucial to PS&D work. The bi-annual producer conference brings representatives of all the co-operatives together to listen and learn, together, identifying and addressing common issues such as how to strengthen Fairtrade and the link between farmers and consumers.

Cafédirect and other Fairtrade companies offer pre-finance of up to 60% of the value of the coffee giving stability to producers, which allows provides them with working capital at an affordable price.

In the past year the company has offered pre-finance of nearly $1.6 million per annum to coffee producers.

Sustainable relationships
This Gold Standard trading policy ensures producers are guaranteed a sustainable trading partnership with fixed minimum prices. Cafédirect still works with the producers it was first loaned coffee from, and works alongside co-operatives through good and bad times.

This is strikingly different from how the global coffee market traditionally operates. The continual drop in prices, caused by the over-supply of produce, the decline in consumption, and weak trading controls, leave producers vulnerable as traders take the cheapest coffee from whichever country or organisation is prepared to sell it.

Cafédirect's relationship with its growers is also different because it buys its coffee directly from grower-owned businesses. Most coffee traders buy from exporters and other long chains of middlemen.

As the market conditions are so tough, knowledge sharing is one of the strongest advantages for producers working with Cafédirect. This is built into the way it buys coffee as well as the advice it provides on market conditions and export strategies.

www.cafedirect.co.uk