By Tash Shifrin,
May 13, 2004
Aid agency Oxfam is to open a chain of high street fair trade coffee shops in a venture that will be part-owned by growers' co-operatives in the developing world.
The Progreso cafe chain, launched by Oxfam and independent coffee company Matthew Argie, will buy coffee at a fair trade price from growers in the developing world who have been hit by a 70% slump in coffee prices since 1997.
Customers at Progreso cafes will be able to sip espresso made from a blend of premium quality coffee beans grown at co-operatives in the Honduras, Ethiopia and Indonesia. The growers' co-operatives will not just be able to promote their products, but will share ownership of the Progreso chain.
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"Coffee growers will win three times with Progreso. They'll be selling their coffee at a fair trade price; they'll share directly in the profits and will also showcase their coffee to the UK," said Chris Coe, Oxfam trading director and one of the founders of the Progreso concept.
Fair trade coffee is the fastest growing sector of the UK coffee market. Last year, consumers purchased 2,083 tonnes of fair trade coffee from shops and supermarkets - an increase of 42% on 2002 figures. Coffee shops sold another 385 tonnes of fair trade coffee in 2003 - up 67% on the previous year.
Growers' co-operatives will own 25% of Progreso shares, with another 25% held in trust for projects in the wider community in coffee-growing areas. Oxfam will own the remaining 50% of the company, which will be a standalone operation run separately from the charity.
Progreso hopes to open three shops by the end of the year and aims to have a chain of 20 shops serving fair trade coffees over the next three years. The company is investigating potential sites in south-east England and Scotland and is seeking concession partners, such as large bookshops, that could host Progreso cafes.
Oxfam and Matthew Algie, which is the UK's largest supplier of fair trade coffee to the food service industry, are each contributing £50,000 to Progreso's start-up costs. The coffee firm will also supply equipment, logistical support and expertise.
The idea for the fair trade shops came from discussions between Oxfam and the La Central coffee growers' co-second supplier, operative in the Honduras, one of the three countires that will supply the cafes.
With the second supplier, Oromia from Ethiopia, La Central is a member of the Progreso group of 11 coffee co-operatives from seven countries which work together to build sales. The third supplier will be Indonesian co-operative KPTO.
The new shops are not Oxfam's first venture into cafe society: in 1991 the charity was one of the joint founders of Cafédirect - the UK's largest fair trade hot drinks company, while Oxfam shops sell fair trade coffee and other ethically sourced goods.
Progreso managing director, Wyndham James, who has worked for Oxfam for 20 years, said: "This is a bona fide commercial venture. We will be launching smart, contemporary outlets that provide consumers with fantastic coffee and help growers through ready-made retail outlets. Progreso will have a strong brand identity and its high-quality coffee will be the cornerstone of its offering.
"Oxfam pioneered fair trade in the 1960s and 1970s and helped to launch Cafédirect. We want Progreso to have the same sort of impact. Oxfam sells fair trade products through its stores and campaigns for changes that help coffee growers overcome poverty."
Opening the cafe chain was "another logical move" considering the charity's background, he said. David Williamson, the managing director of Matthew Algie, said: "We're committed to fair trade because we care about growers and care about supplying the finest coffee to consumers. The Progreso model takes fair trade to a new level with the additional benefit to the growers of a share of the profits."
He added: "We have a moral obligation to assist people involved in producing the raw material on which our business is based. To sit on our hands in the current crisis and wait for a correction in the market is not an option we are comfortable with."