At the end of 2013, Paulig launched the large-scale Sustainable Coffee Strategy responsibility programme. At the heart of the programme is the promise that all procurement - including everything from green coffee to packaging - will meet the responsibility criteria set for them by the end of 2018. The criteria and the targets for the programme will be determined in the course of 2014.

Two young people have been recruited for the procurement team to cultivate professionalism in coffee procurement. It is also hoped that, by providing employment for young people, Paulig will continue to have sufficient talent also in years to come.

Collaboration with partners to be further intensified

An important area of priority in procurement in 2013 was the development of partnering. All of Paulig's main raw material suppliers were assessed, and on the basis of that strategic partners were defined with whom we want to do business in the future and further improve collaboration.  The attainment of the targets set, such as performance quality, punctuality and traceability, will in the future be monitored on a monthly basis with the chosen partners. The introduction of common benchmarks will promote the monitoring and fulfilment of targets throughout the value chain.

Increasingly intense collaboration with partners will assist in the optimisation, for example, of the batch size of orders and packaging materials, thus reducing wastage. When partners' operations and processes are known thoroughly, the entire value chain runs more smoothly and this ultimately makes itself felt by the consumer.

Responsibility labels and traceability

Consumers' interest in responsibility-labelled products is growing constantly. The output of certified coffees is also growing steadily so that the growing demand can be met. The responsibility-labelled products in Paulig's range remained the same, and no new certified products were launched on the market in 2013.

Coffee's traceability is partly dependent on its country of origin. For example, in Ethiopia almost all coffee is sold through the country's internal coffee exchange, so traceability cannot be extended to the plantation. By contrast, about half of the coffee coming from Brazil, for example, can be traced back to the plantation. 2013 The traceability surveys of 2013 will be completed in spring 2014.

Large trading firms have a number of responsibility projects of their own in the countries of origin. Collaboration and participation in these schemes is a natural way to promote responsible procurement - together with certification by third parties. Naturally, these schemes must comply with Paulig's requirements.

The low world market price for coffee impacted growers

The year 2013 was marked by an extremely sharp fall in green coffee price. The large coffee-producer countries like Brazil, Vietnam and Colombia enjoyed exceptionally good harvests, which expanded coffee reserves and dropped the world market price for coffee at times to less than production costs. At its lowest, the price of coffee fell to only a little over 100 US cents per pound in November 2013.

The low price level for coffee is also meaningful from the perspective of responsibility. Efforts are made to cut cultivation costs, for example by reducing the use of fertiliser, which may result in quality problems. Growers may move over to robusta instead of arabica or cultivate entirely different crops, which will result in availability problems for coffee. Coffee-growers also had fewer opportunities to make new investments last year than normally. For instance, adopting certification involves start-up costs for growers, even if it usually means increased productivity per hectare. Certified coffees also command a better price on the market, in addition to which Paulig pays growers a quality bonus.

Paulig mostly buys its coffee direct from the countries of origin rather than through large trading firms. The people in charge of coffee procurement actively visit the coffee countries of origin. In this way, we can make sure with our own eyes that operations are in line with the jointly set criteria. At the same time, we can improve the growers' expertise and quality control.

Year 2013 in figures.