The Rise of Buyer-Driven Sustainability Governance: Emerging Trends in the Global Coffee Sector

The coffee industry connects millions of smallholder farmers with global markets and has historically been a frontrunner in sustainability efforts. Yet, the governance of this value chain and its sustainability depends on the distribution of power between market actors. Like many agri-food goods, coffee is a particularly dynamic sector where relevant actors continuously emerge and disappear as global companies adapt their brand mix, consumer tastes change, NGOs take on new focal areas and industry organizations are founded and dissolved. In the last years, this pace of change has only accelerated, overthrowing many assumptions about key players, trends and tendencies in the coffee industry. This article thus has two interlinked objectives: To provide an updated characterization of the coffee sector’s distribution of power and market opportunities from a Global Value Chain perspective (Gereffi, 1999), and to trace how these power dynamics are redefining the sector’s non-state market-driven (NSMD) sustainability governance schemes (Bernstein and Cashore, 2007). It is based on an in-depth analysis of recent literature, documents and data related to the coffee sector, as well as over 60 expert interviews and observations gathered from field work in Costa Rica, Colombia, Honduras and Guatemala and the attendance of various industry events between 2015 and 2016. The study finds that in a strongly buyer-driven chain subject to high price competition, the reinterpretation of sustainability as supply chain management has led to the emergence of more company-owned standards and direct-impact projects as alternatives to third-party certification schemes, as well as their coordination in pre-competitive sectoral platforms. The simultaneous rise of producing-country definitions of sustainability points to a continued fragmentation of sustainability governance and a loss of authority of traditional NSMD channels.