A Radical New Social Contract Concept from James Hoffmann

James Hoffmann speaking at the 2018 Let’s Talk Coffee Global event in Cartagena, Colombia. Photo by Bryan Clifton, courtesy of Sustainable Harvest/Let’s Talk Coffee.

As famed coffee entrepreneur James Hoffmann proceeded through his keynote-like speech at the recent Let’s Talk Coffee event in Cartagena, Colombia, he repeatedly noted a kind of collective attitude change among sustainability-minded roasting companies regarding the pursuit of quality.

Hoffmann recognized himself as one of the enthusiastic adopters of the popular notion that quality can be something of a silver bullet in the coffee trade: Higher-quality greens fetch higher prices; everybody wins; challenge completed.

While primarily reflecting on his own professional experience — from his 2007 World Barista Championship, to launching London’s Square Mile Coffee Roasters, to writing “The World Atlas of Coffee” — Hoffmann suggested that many roasters in the specialty realm have come to realize that the pursuit of quality is profoundly limited in its impact.

“I think we felt that we were not above the rest of the industry, but separate. We believed we had a meaningful, sustainable model that was fair because we paid for quality,” Hoffmann told the crowd at the event, which was produced by Sustainable Harvest. “But to think that we had built a system that could perhaps be scaleable, be implemented more broadly, I don’t think we succeeded in creating that kind of a model; and I think I represent a growing number of people for whom an obvious truth is now becoming quite apparent.”

That truth has been hammered home recently by an increased number of reports on market prices not covering production costs for farmers, on labor issues, on climate change’s current and impending threats to Arabica production, or on the very viability of smallholder coffee farming for a livelihood.

Power and Risk

Despite all of the best intentions and practical efforts of the specialty coffee sector’s progressive leaders, it seems little has changed in terms of the coffee trade’s fundamental dynamics of power and risk, Hoffmann contended. Hoffmann’s perspective here stems in part from his origin-focused country-by-country research for “The World Atlas of Coffee.”

“I would look at the histories of so many different countries, and I would see a system built, from day one, to be unfair,” he said. “It’s very construct, the whole purpose of it, was to be unfair — to take wealth, to take money, to take power away for the colonial powers.”

Thus, Hoffmann seized the opportunity at Let’s Talk Coffee to propose a radical new concept, referring to it as a “new social contract.” The concept proposes to shift the dynamic of an individual coffee transaction between producer and buyer. In a nutshell, the contract asks roasters to bear more risk.

“For me, the two things that specialty does not really talk about… are the distribution of power and risk in the supply chain,” Hoffmann said. Coffee roasting companies, he added, are “very good at managing risk, and you could argue that most of the risk management tools that exist in the world are to the benefit of coffee roasters.”

Hoffmann pointed to the example of large Italian roasteries in the early 2000s that splashed their brand on the signage, napkin dispensers and ashtrays of their wholesale client cafes, while also locking down equipment supply and maintenance. He noted that while roasters may pay premiums for quality, they also hold the pen that draws quality’s boundaries, which may change through their collective whims from year to year.

Coffee farming, of course, remains a fundamentally high risk/low reward proposition. So under the looming specter of economic unsustainability on the producing end of the specialty coffee sector, Hoffmann asked roasters, “Of course, reducing risk is a desirable thing to do, but to what end?”

“I think we’re at a point, as scary as it is, I need to take more risk — roasters need to take more risk,” Hoffmann said. “And that’s a terrible short-term business decision. I get it.”

A New Contract

Such risk would involve a new social contract, one that breaks from the conventions of the trade by transferring power to sellers.

“Specialty has been terrified of the longer-term contract,” Hoffmann said. “They fear them because what if one year the coffee wasn’t quite as good. That is the terrifying thought that exists in the minds of tons of small specialty roasters throughout the world.”

Despite this way of thinking among specialty buyers, Hoffmann suggested there may be an opportunity for more meaningful connection to consumers if roasters broke from convention.

“I’m not saying as a coffee roaster, it doesn’t matter the quality that’s coming in,” Hoffmann said. “But at the same time… how we tell stories, how we communicate with our customers, I think there’s increasing hunger for participation in a broader vision from the companies [people] buy from. And the story of ‘I buy the best’ doesn’t fly anymore because everybody says the same thing.”

So what might this new social contract look like? Hoffmann, for one, said he’s not in a position to bring it forth, although he implored producer representatives and other actors throughout the chain to consider a vision.

“I cannot turn up on this stage and produce a new social contract,” Hoffmann said. “The last thing the world needs is more of people like me telling us how to fix things. People like me, we can be useful because we can participate. We can put our money where our mouth is because we can buy in ways that are more supportive — but I can’t produce this.”

A Long-Term Game

Yes, willfully accepting more risk in a contract defies all business sense. But there’s also growing momentum for the notion that business as usual, even among well-intentioned smaller roasters, is itself a threat to the specialty coffee sector.

“If we’re trying to play a long-term game here, where coffee stays diverse and interesting and excellent, and [where] we don’t end up in that terrifying future where four countries produce coffee for the world and that’s kind of it — which is not wildly unrealistic — if we’re trying to play a slightly longer-term game, then I think we need change,” Hoffmann said. “I think we need contracts written by people in this room who are not buyers.”

There’s also the argument that being on the leading edge of sustainability, no matter the size of your business, is a smart play in connecting with a more conscientious and influential consumer base.

“Consumers want more,” Hoffmann said. “I think there is an opportunity to deliver on quality — to tell the truth about how amazing and how delicious and how complex coffee can be — but to do something more, and something better, something that could make this a slightly more attractive, equitable, sustainable trade.”