Fair Trade Coffee Company Analysis (Essay Sample)

FAIR TRADE COFFEE COMPANY ANALYSIS
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Coffee was among the most traded areas in the world, it was highly recommended by most of the individuals all over the world. The amount of coffee sold daily kept on increasing with the increase in the number of the customers who found it much satisfying from its use. Most of the coffees come from the small scale farmer despite there being large scale farming of the commodity. From its increased uses, the amount of income that was generated from the sale of coffee from the exporting countries greatly contributed to the extensive amounts of the Country's income.
However, for an increased income from the coffee industry, there arose the needs to mainstream the coffee industry into some more brands that would account for the increase in the income level. Mainstreaming aimed at increasing the variety of the company's products thus a diversification in the market which aimed at the increased income from the consumption of the products (Osterhaus, 2006). Though a wise decision, the idea was believed to result into various grievances that would interfere with the undertakings of the company as well as the profitability of the company thus outstanding as a threat to the performance of the company.
Moreover, the objectives from the invention of the concept to be met in order to successfully implement the idea, this brought about the coffee crisis in the country which as well led to losses within the company. The crisis was as a result of the reduced coffee prices between 2001 and 2005. The cost of the coffee was below the production cost thus a clear indication of loss encounter in the Fairtrade coffee company. This affected the overall coffee fraternity as the farmers were suffered from the low payments, lack of payments for their coffee as well as lack of customers for their coffee.
Fridell (2007), this greatly affected the economy of the country which resulted to reported cases of inflation. The economic disequilibrium led to financial strains in the enhancements of the growth and development of the country and the undertakings of the company. Despite the prices in the coffee, there was the availability of the cheap sources of the Robusta coffee beans that were chemically produced in plantations that were located in Vietnam and Brazil. This availability of the cheap coffee in Brazil had to replace the Arabica beans that were of quality value, the Robusta coffee in Brazil was harvested by machines. Though the crisis had started a bit early in the 1990s, their effectiveness continued to be felt in the coffee industry in the four period times between 2001 and 2005.
From a study done by Langen (2013), due to the coffee crisis most of the coffee related unions failed in their undertakings where some were liquidated from their existence as the International Coffee Agreements (ICAs) that had failed in the 1989. There was a need to arise the unions to enhance the performances of the coffee industry. T...