Introduction
This report provides the vision of developing a sustainable coffee shop by 2022, although some key components discussed herein have already been implemented in some coffee shops. Despite changes in the business models for most coffee shops to include other meals, coffee is still the most dominant, which has been the key reason behind maintaining most industry traditions, making the product the second largest traded good after petroleum (Treadway et al., 2015). However, key challenges such as climate change threaten the industry’s sustainability and the benefits that have accrued from it. Although coffee shops and key industry players such as Starbucks’ main concern is making profits, climate change affects the production process in farms, which transcends to negative effects on the quality, quantity, and price (Bacon, 2008). Therefore, sustainability management in the coffee industry is not only about ensuring that the benefits of coffee and the drinking culture that has been around for more than a century is passed to future generations, but also for the coffee business to continue to grow and offer employment, revenue, and other economic gains to different people across the world.
Vision for the Future
Environment
Carbon emissions remain a major threat to biodiversity today. With the continued loss of diversity, deforestation, and climate change, coffee planting will definitely be affected (Bitzer, Francken, & Glasbergen, 2008). Global warming is set to influence availability of resources such as water, farm yields, and the quality of coffee berries (Jang, Kim, & Lee, 2015)). The result is a potential threat to a century old culture, which necessitates initiatives to protect the environment.
More than 83% of adults in the U.S alone drink coffee. Countries like Denmark, Norway, and Finland have been noted to have an average consumption of 10kg of coffee per person yearly (Snedden, 2014). With the use of disposable cups being a major trend in most coffee shops, companies such as Starbucks have been noted to have more than 2.3 billion yearly disposable cups across the globe, which contributes to high CO2 emissions (Snedded, 2014). Medlock (2016) projects that the number of paper cups disposed yearly is 58 billion. Therefore, managing how coffee cups are disposed is a critical aspect in helping ensure coffee shops are geared toward sustainability, which will gain momentum with time. This goal can be achieved through the use of recyclable paper coffee cups, which has been a project that Frugal Pac has greatly sponsored. The company has been making coffee mugs from recycled paper in an effort to reduce wastes (Medlock, 2016). Besides, Eco Coffee can also give customers discount if they come with their own mugs or prefer taking their coffee in the coffee shop by offering them ‘for here’ cups.
Further, it is also crucial to focus on encouraging customers to take coffee in coffee shops. Jang et al. (2015) have indicated that customers would prefer spending time in coffee shops rather than having it at work. Therefore, restoring the image that coffee shops are places where one can go and enjoy their time is crucial in helping focus on a reduction in disposable cups. Offering free Wi-Fi, providing great customer service, and having coffee shops as places where people from diverse origins can meet is crucial.
Although disposables contribute to a large percentage of the adverse environmental effects from coffee, its production accounts to a significant emission of carbon. Traditionally, coffee was grown under the shade of trees. However, this has changed as ‘sun activation’ has been globally embraced (Blacksell, 2011). Besides, this type of planting has been largely dependent on the use of fertilizers, which has also caused massive environmental degradation. In turn, this has led to clearing of massive tracks of land to provide more land to grow coffee. Therefore, focusing on ‘shade grown’ coffee is paramount to foster protection of biodiversity and reduce amounts of carbon in the atmosphere.
Economy
While coffee production has been a blossoming industry with companies such as Starbucks reaping billions in revenue, the same has not been enjoyed by most farmers. The presence of many intermediaries and unfair trade have threatened the production of the crop. In countries like Uganda and Kenya, coffee farmers have not enjoyed benefits from the crops as compared to other export crops, which has seen a decrease in the number of coffee farms over time (Bacon, 2008). However, the future will pave way for direct transfer of funds, which will reduce the role of intermediaries. Globalization and IT development will also link companies like Starbucks directly to farmers all over the world. In turn, such efforts will be instrumental in improving returns customers get.
Besides, employee salaries and rewards is set to improve as companies seek to employ the best as a strategy to gain competitive advantage. Thus, companies will be more cautious on integrating employees to be part of the company, which will help improve service delivery and the focus for a better working environment. Moreover, with an expectation of increased economic activities globally, more people will have income rises, which will most likely transcend to spending and increased revenue.
Socially
Increased growth in population remains a major issue that will definitely be shaping the future. Globalization and urbanization will increase the number of customers for most coffee shops and necessitate the need for expansion. The health sector will also experience changes with new developments on treatment and prevention for most diseases. People will also be more cautious of their health and require the same from their employers. Thus, companies will have to focus on educating the public on many health problems and ensure that their products are safe to use. They will also focus on funding health promotional programs as a way of being socially responsible.
Industry/Market
Coffee Certification: Fairtrade
As the coffee industry continues to grow, the need to ensure that farmers find the commodity profitable has been gaining a wide acceptance. As such, certification of farmers has intensified over the years with the focus of organizations such as Fairtrade and Utz-Certified. Van Rijsbergen et al. (2016) note that coffee certification not only helps farmers in increasing their production, but also improves their welfare. Coffee certification organizations help in improving on coffee specialization, processing, production, and ensuring sustainability in prices (Raynolds, 2009). Therefore, coffee shops should fund and work with such organizations to improve the welfare of the farmers, and in turn, gain in terms of high quality produce, increased yields, and customer satisfaction.
Companies such as Starbucks have noted that Fairtrade has been a critical issue for most farmers. Fairtrade has a market share of 27%, making it the most vastly used sustainable system in the market (Blacksell, 2011). Improving the lives of producers is an avenue of ensuring that they are willing to participate in environmentally friendly practices while planting. To ensure that farmers get a price commensurate of high production costs, Fairtrade also helps remove middlemen and empower farmer’s cooperatives. In turn, customers earn more income that helps them attend quality development trainings, get quality health care, and improve their social status (Valkila, 2015). Besides, retailers also save on costs, which can then be used to provide training to farmers and participate in socially responsible activities, such as offering scholarships (Van Rijsbergen et al., 2016). Nonetheless, with preset premiums and minimum prices also helps protect the customer from market fluctuations.
Figure 1: Impact Pathways of Coffee Certification (Source: Van Rijsbergen et al., 2016)
Coffee Shop Design to Influence Coffee Drinking Culture
Influencing a growth in the coffee drinking culture remains a target for most companies. Waxman (2006) showed that providing a good designs influences how people perceive coffee shops and their willingness to spend their time there. Ideally, coffee should be a place where people not only visit to grab a cup of coffee, but also socialize, relax, and in some cases have business meetings (Qian, 2014). However, more people are opting to go home, walk, or head to work with their coffee mags. Therefore, the focus should be on encouraging them to spend more time in coffee shops, which affects the social and environmental aspects of sustainability.
Waxman (2006) suggests that coffee shops should help people realize their attitude and feelings about coffee, activities they engage in, and those they interact with. Therefore, a coffee shop should offer a social culture relating to developing a sense of community, support and networking, offer an opportunity to socialize, and influence personal growth. Such aspects can be actualized by designing coffee shops with a view to the outside, comfortable furniture, adequate lighting, an appealing aroma, and cleanliness (Waxman, 2006).
Additionally, the use of LED lighting offers a myriad of designs, saves costs on energy, and can be used to create a great appearance. With improvement in LED technology, it has become cheaper for companies to use LED at significantly low initial costs (Qian, 2014). Nonetheless, although most coffee shops have embraced the use of clean energy, there is still a need to ensure that they focus on avoiding carbon emission through recycling of mugs, encouraging customers to use in-house mugs through discounts, and using cups from recycled paper. Recyclable mugs can be branded in a way that shows customers that using such mugs helps them play a role in protecting the environment (Harith, Ting, & Zakaria, 2014). Finally, to minimize on wastage of water, coffee shops can also include water harvesting and recycling machines in their facilities. In turn, such strategies make coffee shops the ‘third place away from home and work’ (Oldenburg, 1989).
Reducing Carbon Emissions
Since the production process accounts to the largest percentage of carbon emissions, it is vital to start the process of reducing emissions to the atmosphere from this phase. Carbon emissions have been characterized as the major cause of climate change. The effects of climate change on coffee crops and firm yields have been recorded in Arabica as a result of a decrease in available land for farming and an increase in temperature (Bunn et al., 2015). Additionally, with a move toward ‘sun cultivation’ reaching a climax, deforestation poses a risk to coffee production in the long-term (Blacksell, 2011).
The Rainforest Alliance, following guidelines from the Sustainable Agricultural Network, has been working on modalities to encourage farmers to focus on environmental protection (Blacksell, 2011). Farmers who want certification from the Rainforest Alliance must focus on developing forest non-productive areas and shade grown coffee in their firms as well as restrain from deforestation and focus on reforestation. Areas such as Costa Rica and the rainforests of Ethiopia have had most of the initiatives from Rainforest Alliance implemented (Snider et al. 2017; Takahashi & Todo, 2017). The Rainforest Alliance requires a minimum of 40% tree cover for any agroforestry activity, which helps reduce sedimentation in rivers and encourages reforestation among farmers (de Jesús-Crespo et al., 2016). Takahashi and Todo (2017) note that shade coffee plantation have significantly helped increase Ethiopia’s tree cover and reduce degradation. Therefore, although certification programs from organizations such Fairtrade have helped improve the welfare of farmers, Rainforest Alliance has played an important role in helping reduce carbon emissions from the production stage.
Aligning Trends with the Vision and its Impact on the Organization
As the world moves towards sustainable management in business and other organizations, Eco Coffee’s success is dependent on whether trends in the environment, social, and economic context of sustainability align with those in the industry. Being sustainable is now a business strategy that firms can use to gain a competitive advantage despite the costs involved. However, to ensure the life of the coffee industry, companies have to warrant that they work toward achieving the outlined goals and vision.
Eco Coffee must focus on implementing new features in its coffee shop to appeal to customers as a sustainable firm. The company’s coffee shops should stand out as eco-friendly, offer a great working environment for workers, confirm that farmers get a high income, and provide a serene ‘third space’ where people can gather and socialize as they enjoy quality coffee.
Key Shareholders
The key stakeholders in the coffee industry include:
- Farmers
- Buyers
- Processors
- Exporters
- Importers
- Roasters
- Retailers: Restaurants, fast food outlets, coffee shops, supermarkets, and other sellers)
- Consumers
5 Key Metrics
Gladwin et al. (1995) suggested five key metrics to measure sustainability, which will be used in this paper.
Inclusiveness
Climate change has moved from discussions in boardrooms among key international player to a responsibility that everyone has to share. Therefore, coffee shops and the entire coffee industry must work together to foster a reduction in environmental pollution through reduction in carbon emission and also improve on protection of forest. Ensuring that farmers get an equitable share of proceeds from is also a key issue requiring participation from all stakeholders. Therefore, future and present generations are all responsible for ensuring economic, social, and environmental sustainability.
Connectivity
With cases of poor returns for farmers in countries such as Uganda despite a tremendous growth in the coffee industry, there is a need for improving the lives of growers. Thus, the input of certification bodies such as Fairtrade in helping provide training, improve lives of farmers through higher prices and premiums, and remove intermediaries transcend to better education, healthcare, and wellbeing.
Equity
Most revenues from the multi-billion coffee industry is enjoyed by importers, exporters, processing firms, and roasters while farmers get a lower income. However, the vision for Eco Coffee is to ensure that farmers get higher income by ensuring that the costs of sustainability is not left to them.
Prudence
To improve sustainability in the coffee industries, it is vital that all stakeholders act in fairness and ensure that they work on their part to foster sustainability. Although businesses aim at making profit, the goal should not be at the expense of the future generation.
Security
Ensuing that coffee production does not lead to deforestation should be a key agenda for different industry players. Shade farming offers a solution that has worked in different parts, such as Ethiopia and Coast, and can be embraced in other countries. Besides, global warming is a reality that needs efforts from different industries, including the coffee sector. Thus, coffee production can become an embodiment of environmental protection, which will ensure the security of future generations.
References
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