BOGOTA (Reuters) - An app that sends money in the form of tips from appreciative caffeine devotees around the world to coffee growers in Colombia could help farmers battered by dismal prices earn more income, the initiative’s founder said.
Many growers in the Andean country, the world’s top producer of washed arabica, are struggling to scratch a living even though high-quality Colombian beans remain sought after by coffee drinkers around the world.
Arabica coffee futures fell in May to their lowest level in more than 13 years, just 87.60 cents per lb, before recovering slightly to around 96 cents per lb. The low price has some farmers looking for alternative crops.
It even led Colombia’s growers federation to float the idea of untethering production from international prices set on the New York market.
But a former U.S. hedge fund manager, inspired by a stint working on a Colombian coffee farm to mount a non-profit effort to help growers, is hoping his tipping platform can help alleviate farmers’ burden and get consumers invested in the future of the crop.
The ‘propina’ platform, which launches worldwide on Friday, comprises two different apps. One will be displayed on iPads in coffee shops and other locations and will send funds to workers at the farms the locations source from.
The second app, available on smartphones, will allow drinkers to directly tip their favorite cafe’s supplier or contribute to a general fund.
The contributions - managed by Colombia’s pension administrator - will ensure farmers and pickers earn more even if big buyers refuse to pay higher premiums, said platform founder Crawford Hawkins.
“Right now the system is completely warped in the favor of Nespresso and Illy and the large roasters,” said Hawkins. “This is probably the perfect environment for them to be doing business and yet they’re doing the bare minimum to say they care about farmers.”
Nespresso did not respond to a request for comment. However, it recently launched its own charitable effort it says will help more farmers swap coca, the base ingredient in cocaine, for coffee.
Illycaffe said in a statement to Reuters it guarantees producers who meet its quality standards a premium over the cost of production. “Producers are the most vital and endemically the least fairly compensated actors in the coffee supply chain,” it said.
The app will also allow users to set up recurring donations and get updates direct from farmers. Hawkins hopes to expand into gyms and co-working spaces, reaching between 500 and 1,000 locations in the apps’ first year.
The effort will begin in a dozen locations supplied by Madrid roasters SupraCafe, which stocks restaurants and hotels, but Hawkins said he is already in talks with rapidly expanding chains in the United States.
Many farmers have trouble finding people willing to do the arduous, all-weather work of hand-picking beans on steep mountainsides.
The pension payments may help growers attract labor, Hawkins said, and will motivate them to formalize their workforce.
Hawkins acknowledges asking drinkers to tip on top of the cost of their latte and gratuity for a barista may be a hard sell, but says significant funds could be raised if just a quarter of customers participate.
The propina iPads will be displayed alongside a looped short documentary about the price crisis - an effort to attract the attention of clients waiting for their orders.
“Guilt is sometimes a very good driver,” Hawkins said. “You love your specialty coffee, but it’s at risk and the farmer who produces it is at risk. You can do something about it.”
The app may soon offer consumers the option to round up their bill to the nearest dollar as a tip, Hawkins said, and could eventually expand into offering microloans to growers.
“There are enough specialty coffee shops out there to grow this in a big way.”
(This story has been refiled to fix spelling of ‘platform’ in paragraph 6)
Reporting by Julia Symmes Cobb; Editing by Daniel Flynn and Sandra Maler