The Fairtrade circuit
The Fairtrade label allows to better pay the producers and to guarantee good working conditions. Depending on the world price of the product, producers with the Fairtrade label are paid 15% to 65% more than a conventional producer. However, the brands are free to set the final selling price of the product in stores. The share of the selling price that goes to the producers depends on the value chain and depends from one product to another.
For 15 years, the world price of coffee has never been so low, at the end of 2019, a pound (450g) of coffee cherries was worth 0.86€. The Fairtrade label allows producers to earn a maximum of 1€41 for 450g. On the French market, a coffee pod is sold for about 40 cents and inside is only 5g of coffee. We will let you do the math: the Fairtrade guarantees a better remuneration, yes, but not a fair one! 1€41 has a much higher value in a coffee producing country than in a consuming country because the standard of living is not the same but it is not a price that reflects the hard work of the producers...
A circuit with too many intermediaries.
In the classic coffee circuit, that is to say the one where the coffee brands do not meet the producers to buy the coffee directly from them but go through a negotiation circuits, it is estimated that there are 30 intermediaries between the producer and the consumer. 30 intermediaries who will take a commission. This explains the high price of coffee for consumers compared to the purchase price from the producer. But why not work directly with the producers? The margin would be the same but the producer could get much more! This is what we do at Araku.
Araku, a different story
Araku is not the story of a French brand that wanted to sell coffee in France and went to meet the producers. No, it is a very different story! It is the story of an Indian, Manoj Kumar, who wanted to help his country. And his choice was the Araku Valley, a beautiful valley in the east of India, in total isolation from the rest of the country, with no technology, no money, nothing and an extremely high mortality rate. After helping the population, building hospitals, eradicating childbirth, sending children to school. The families asked for help to have an income, they wished to cultivate the coffee that used to grow in the Valley. After millions of trees were planted, farmers were accompanied in the organic culture, dozens of harvests, rather than letting the producers sell coffee to people with bad intentions, Manoj Kumar had the crazy idea to launch a brand, in France. He decided to create a brand to guarantee the good remuneration of the producers. This is how Araku was born. And to guarantee a good standard of living the price is fixed by the producers themselves.
A price according to the quality
The Araku valley is composed of ten villages far from each other. Thus, each village has a specific harvest day and a schedule during which a truck comes to collect the harvest of the day. Each producer then comes with the cherries of its harvest and account book. The cherry bins are weighed one by one and the color is checked. Once the cherries are weighed, the price is recorded in the account book of the family that harvested them. Two days after the coffee are left in the cooperative (in the center of the valley) the farmers receive a transfer on their bank accounts.
The price changes depending on each harvest, it could be on the evolution of the price of coffee or the living conditions evolution in the valley (drought, bad harvests,...), but the price never decreases. It is the farmers' cooperative that sets a price. In 2019, Araku paid 2.5 times the world coffee price in addition to the 65% Fairtrade and Organic premium.
Some farmers told us that since they are selling coffee directly to the cooperative, their annual revenues have been multiplied by 100 ! Which is the case of the widow Sundaramma Boy who raised by herself her kids but this is another story.