What is the market share of eco-certified coffee?

Certified coffees (organic, Fair Trade, Bird-Friendly, Rainforest Alliance, Utz, and Starbucks C.A.F.E. Practices) make up only about 4% of world green coffee exports, or about 220,000 metric tons. The U.S. is a major importer of various types of certified coffee, which make up nearly 8% of green bean imports. Let's take a quick look at the market share* and growth of the three certification labels that focus largely on ecological standards: organic, Rainforest Alliance, and Bird-Friendly.

Organic
North America imports around half of the world's organic coffee. In 2006, this amounted to 30,000 metric tons, a 56% increase over 2005.  In 2007, sales reached $1 billion, with 38,000 metric tons representing a 29% increase from the previous year. Still, organic coffee is less than 3% of the total North American market. Farmers receive about a 20% premium (average $0.24/lb) over the C market commodity price of coffee. Nearly 80% of the Fair Trade coffee sold in the U.S. is also certified organic. All Bird-Friendly coffee (see below) is certifed organic.

Rainforest Alliance
As of late 2007, Rainforest Alliance (RA) had certified over 200,000 ha of coffee on nearly 17,000 farms; total production was around 40,000 metric tons. Their website currently states that 1.3% of the world's coffee is RA-certified. The U.S. is the largest importer of RA-certified coffee, acquiring just over 40%, while Europe is not far behind. In 2006, RA-certified coffee was less than 1% of the total North American market, about 12,000 metric tons. RA is growing rapidly, with 100% average annual growth the last several years. RA does not specify a price premium, but farmers receive about 10 cents a pound over the C market price.

Bird-Friendly
Bird-Friendly is the shade certification of the Smithsonian Migratory Bird Center (SMBC). As of May 2008, it certified 28 producers growing on 7200 ha. Production is less than 3100 metric tons. This is a very small market share, and only a relatively small portion of the total production is sold labeled as Bird-Friendly. In 2006 this was less than 200 metric tons out of 3600 produced. Farmers receive a premium between 5 and 10 cents a pound, on top of the premium for the organic certification (Bird-Friendly coffee must also be certified organic).

The graphic below (click to enlarge) is a shot of a slide from a talk I attended by SMBC's Robert Rice at the SCAA annual meeting and gives some sense of relative production and overlap in a variety of certifed coffees.

As the numbers indicate, though, if there was a circle on the diagram representing mainstream commerical coffee, it would dwarf those of the certified coffees. Sustainable coffees are still a niche market. 

What drives the market? Interestingly, a 2001 survey of the North American specialty coffee industry asked coffee business owners to rate the importance of various factors to their buying/selling choices for sustainable coffee. The most important was quality, but next to last was consumer awareness. Author Daniele Giovannucci notes, "This is an interesting indication that consumer demand may not currently be the primary driving force behind the sustainable coffee market. There are indications that the industry itself has played the key role in developing sustainable coffee markets by first providing the supply."

This doesn't mean the coffee industry wouldn't respond to consumer demand; I think it would only enhance market growth in sustainable coffee. Let's grow those eco-certified coffee circles!

---

*Not all certified coffee gets sold as such - some may be blended with non-certified coffee, the buyer may be interested in other attributes besides the certification and purchases it without intending to market it as certified, or other reasons. The estimated figures are market share of coffee actually sold as certified, not the amount of certified coffee produced under each scheme.

Sources. I had the pleasure of attending a talk by poverty and agriculture expert Daniele Giovannucci at the SCAA meeting. He is the author of the sources of the information used in this post.

Giovannucci, D., Liu, P. and A. Byers. 2008. Adding value: certified coffee trade in North America. In Pascal Liu (ed.). Value-adding Standards in the North American Food Market - Trade Opportunities in Certified Products for Developing Countries. FAO, Rome.

Giovannucci, D. and A. Villalobos. 2007. The State of Organic Coffee: 2007 U.S. Update (PDF). CIMS: San Jose, Costa Rica.

Giovannucci, D. and F. J. Koekoek. 2003. The State of Sustainable Coffee: A study of twelve major markets. International Coffee Organization, International Institute for Sustainable Development and UNCTAD. Available online.

Giovannucci, D. 2001. Sustainable Coffee Survey of the North American Specialty Coffee Industry. Working paper commission by The Summit Foundation, The Nature Conservancy, North American Commission for Environmental Cooperation, Specialty Coffee Association of America, The World Bank. Available online.