Domestic Consumption

It is estimated that around 50% of the coffee production in the country is consumed in Ethiopian households, which makes the country one of the largest consumers of the beverage (ICO, 2020a; Interview 1, 3; Minten et al., 2019; Mitiku et al., 2017a;

Tröster, 2015).

4.9.1 Cultural Value

There is a long tradition of coffee drinking in Ethiopia, as coffee is an important part of social life and has significant cultural value (Chauhan et al., 2015; Interview

1, 3; National Geographic, n.d.; UNIDO, 2014). Traditionally, Ethiopians consume coffee “during social events such as family gatherings, spiritual celebrations, and at times of mourning” (UNIDO, 2014, p. 6). The coffee ceremony is highly valued, and a crucial step of the ceremony involves coffee bean roasting and grinding (Chauhan et al., 2015; Field Trip; National Geographic, n.d.; Site Visit 4; UNIDO, 2014; Wiersum et al., 2008). Picture 9 shows a coffee ceremony we attended with locals. A more detailed description of this experience can be found in appendix 1.

Picture 9: This picture taken during our field trip to Jimma, Ethiopia, shows the private coffee ceremony we attended. The woman in the picture is shown roasting the coffee beans.

Most of the coffee sold domestically is sold as green beans without packaging as Ethiopians prefer to roast and grind their coffee in their own homes, mainly due to cultural aspects and traditions (Field Trip; Gashaw et al., 2018; Site Visit 4;

UNIDO, 2014). Yet, coffee shops have become increasingly popular in large cities in the country (Chauhan et al., 2015; Field Trip; UNIDO, 2014). This can be because it is common practice for Ethiopian people to drink on average 3 cups of coffee per day, and they never drink coffee alone (Field Trip; Interview 3; Site Visit 4). Picture 10 shows unpacked and unroasted coffee.

Picture 10: This picture shows unpacked and unroasted coffee that we purchased during our field

4.9.2 Illegal Market

Due to the importance and high demand of coffee in Ethiopia, some local consumers demand high quality beans that have obtained export quality grades from the ECX (UNIDO, 2014). However, as the government wants to increase the attractiveness and thereby the price of Ethiopian coffee in the international market, export quality beans are sold to exporters, and are not allowed to be sold domestically (Minten et al., 2017; Minten et al., 2014). This has created an illegal market in the country, where export quality beans are sold to local consumers (Minten et al., 2017; UNIDO, 2014). Some farmers choose to grade their coffee badly, to sell their coffee locally (Interview 1). Another way farmers are engaging in the illegal market is by selling their goods directly to retailers or consumers, instead of going through the ECX and legal channels (Gashaw et al., 2018).

According to Minten et al. (2017), a lot of coffee sold at the semi-wholesale and retail level in Addis Abeba is of export quality. There have also been findings of export quality beans in traditional local markets, yet the share is low (Minten et al., 2017). Thus, it is assumed that export quality coffee sold from semi-wholesalers is sold “to modern local retail outlets, as well as to coffeehouses, cafés, and some hotels” (Minten et al., 2017, p. 80). Local consumers pay higher prices for these quality beans, and sellers can obtain higher profits than than they would have gained from exporting them (UNIDO, 2014).

4.9.3 Distribution to Local Market

To get coffee to the final consumer in Ethiopia, there are several actors involved.

According to Gashaw et al. (2018), the main actors involved in the process between the ECX to the domestic consumption include wholesalers and retailers. Minten et al. (2017) have mapped out the coffee supply chain and the distribution of coffee in Addis Abeba (figure 14). After the coffee has undergone quality inspection at the ECX, the coffee is bought by wholesalers, who further sell the good to roasters, coffee shops and other retailers (Minten et al., 2017). This process involves several middlemen, such as distributors, collectors and semi-wholesalers (Minten et al., 2017). The final step of the process is the local end-consumer (Minten et al., 2017).

Figure 14: This map illustrates the distribution of coffee from ECX to final consumer in Addis Abeba (Minten et al., 2017, p. 78).

4.9.4 Discussion

We have identified one main challenge and potential opportunity, that is, the illegal market. We discuss this in terms of sustainability and the triple bottom line.

Illegal Market

Our findings show that a reason for the illegal market, might be that local consumers are demanding high quality coffee due to the cultural importance of the commodity.

This can be linked to the social dimension of sustainability, as it concerns collective values and behaviour (Dubey et al., 2017). However, this illegal market is not in line with social sustainability, as it is not in accordance with ethical business operations. This relation between social sustainability and ethics is confirmed by literature (Dubey et al., 2017; Mani et al., 2016).

We found that another reason for having an illegal coffee market in the country, is that locals demand high quality coffee that is destined for export. As explained, one of the reasons for this, is that coffee sellers have an opportunity to get higher prices for their export quality coffee if sold locally. The economic dimension of sustainability is concerned with increased revenues and sales (Braccini &

Margherita, 2019; Shou et al., 2019). Thus, this illegal market could impact the economic sustainability of coffee sellers in a positive manner.

Based on our findings, we assume that the illegal market can harm the reputation, image and end-consumer trust of coffee originating in Ethiopia, as grading can be forged. An important aspect of the economic dimension of the TBL is the reputation and image of businesses and actors (Ferro et al., 2019; Goddard, 2017). Hence, we assume that the illegal market could potentially harm the economic sustainability of the coffee industry originating in Ethiopia, since it can impact the consumers’

attitude towards Ethiopian coffee. The dimensions of the TBL are related to each other (Braccini & Margherita, 2019; Christopher, 2016; Geissdoerfer et al., 2017).

Thus, an impact on the economic dimension can influence the sustainability of the entire coffee supply chain. We therefore conclude that if overall supply chain sustainability is to be achieved, the illegal market should be addressed.