Coffee Statistics Report 2016

Introduction

The main goal of this report is to present the scope and scale of the UTZ coffee program in 2016. The statistics report is written in order to inform our stakeholders and is part of our commitment to transparency.

The statistics report focuses on the key indicators related to:

• Market uptake: sales of UTZ certified coffee

• Program reach: UTZ certified coffee production, premiums being paid

and multi-certification of this production

This report is part of the UTZ monitoring and evaluation system. Most of the data in this report is collected via our online traceability system, the Good Inside Portal.

We recognize that there may be shortcomings with the reliability of the data. We look forward to receiving your feedback. For more information, please contact the Monitoring & Evaluation Department at ME@utz.org

©2017 UTZInformation presented here is for informative purposes only. UTZ grants permission to use information for personal, non-commercial use, without any right to resell or redistribute information or to compile or create derivative works therefrom.

Content

1. Reach

2. First buyer sales

3. Premium

4. Estimated production

5. Supply-demand trend

6. Multi-certification

7. Conclusions

1. Reach With Laos joining, now 25 producing countries over the globe

567,336

2010 2011 2012 2013 2014 2015 2016

Area (ha)

226,424

2009 2010 2011 2012 2013 2014 2015 2016

# of farmers

296,208

2010 2011 2012 2013 2014 2015 2016

# of workers

1. Reach The reach of the UTZ program increased over 2016 with 12 % more farmers, 15% more workers and 3% more land

25

2009 2010 2011 2012 2013 2014 2015 2016

# Producing countries

2.1 Global salesThe UTZ coffee sales - the volume UTZ certified coffee bought from producers - increased by 35% from 2015 to 2016

UTZ sales recovered from temporary drop in 2015 and picked up positive trend Increased sales mainly came from Western and Northern Europe, both due to

existing partners increasing their commitments and some new joining Total volume sold by UTZ farmers increased by 35 percent in 2016 85% of the global coffee sales were Arabica and the remaining 15% were Robusta

coffee

120,994 136,752

188,096

224,028

258,867 238,392

321,419

2010 2011 2012 2013 2014 2015* 2016

MT

‘First Buyer Sales’ are sales from the producer to the first buyer.* From 2015 onwards volumes are reported in Green Coffee equivalent.

35%

2.2 Sales per origin country Largest increase in Brazil (50%) and Honduras (46%), a small loss in Vietnam (5%)

35% increase in UTZ coffee sold from Latin America because of more sales from Brazil,

Honduras, Colombia, Peru, Nicaragua, Guatemala

Coffee sales from Asian remained stable: India compensated for the decrease of 5% in sales

from Vietnam

3% less coffee sold from Africa because of 10% drop in Kenyan coffee

‘First Buyer Sales’ are sales from the producer to the first buyer.*Other includes Mexico, Uganda, Ethiopia, Indonesia, Costa Rica, Kenya, China, Tanzania, Papua New Guinea, Rwanda, Burundi, DR of Congo, Panama, Bolivia, Dominican Republic, El Salvador & Zambia

149,514

48,326

32,041 31,758

12,597 10,933 9,555 6,876

19,839

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

Brazil Vietnam Honduras Colombia Peru Nicaragua India Guatemala Other*

2014

2015

2016

2.3 Split Arabica vs RobustaAlmost 50% increase in Arabica sales but a 14% decrease in Robusta sales

188,755 183,776

274,272

70,113 54,615 47,147

2014 2015 2016

Global UTZ certified First Buyer Coffee Sales (MT)

Global UTZ Certified 1st Buyer Arabica Coffee Sales Global UTZ Certified 1st Buyer Robusta Coffee Sales

Arabica volume sold increased by almost 50%

Vietnam and India sold most of the UTZ certified Robusta coffee

Robusta coffee sales increased in Brazil, Mexico and India and decreased in Vietnam, Indonesia and Uganda

‘First Buyer Sales’ are sales from the producer to the first buyer.Arabica sales consists of Colombian Milds, Other Mild Arabicas & Brazil & other Natural Arabicas

2.4 Sales per coffee quality classificationColombian and Brazilian Arabica sales increased since 2015

Brazilian and other mild Arabica coffee qualities saw largest increase (more than 50%) compared to 2015 sales Account for 46% of volume sold

Colombian Arabica mild quality sales increased by 15% And make up 27% of UTZ sales

Robusta sales decreased by 14 % compared to 2015

90,118

112,675

98,981

148,254

18,879 20,457 27,542 31,671

57,108 50,664

54,884

87,746

52,532

70,043

54,303 47,104

2013 2014 2015 2016

Brazil and other natural Arabicas Colombian Milds Other Arabica Milds Robustas

‘First Buyer Sales’ are sales from the producer to the first buyer.Arabica sales consists of Colombian Milds, Other Mild Arabicas & Brazil & other Natural Arabicas

The number of Supply chain actors in the UTZ Program increased by 87 First members joined the UTZ program in 2016 in Ecuador, El Salvador, Rwanda, Zambia,

Greece & Latvia The number of labeling approval requests increased by 37.5%

This resulted in 360 approved SKUs for Coffee And coffee products with the UTZ name or logo available in 89 countries, 17 of them new

2.5 Market uptake Increase in number of newly registered supply chain actors andnumber of new label approvals reflects increased market uptakeof UTZ coffee

395

492

582

669

2013 2014 2015 2016

# of Coffee Supply Chain Actors

3.1 Premium UTZ average coffee premium remained stable at 2.89 $c/lb

The UTZ Premium is an additional cash amount paid above the market price for a similar conventional (non-certified/non-verified) product. It is mandatory and agreed upon between the certified group or producer and the first buyer.

The average UTZ premium, as registered in the Good Inside Portal (GIP) increased by 2% for Arabica to 3.10 Cents/ lb and decreased by 11% for Robusta to 1.61 Cents/ lb in 2016.

4.29

3.49

2.72 2.74 2.89

4.44

3.80

3.13 3.03 3.10

3.56

2.28

1.68 1.821.61

2012 2013 2014 2015 2016

Global average UTZ premium ($c/lbs)

Global Arabica Robusta

UTZ premium calculations are based on transactions data recorded in the GIP. Values above 20 $c/lbs are excluded from analysis.

3.2 Premiums per countryA detailed look shows a large variation in premiums within and among countries

2.574.28

1.74

4.79

8.41

2.15 2.52

4.753.29

4.40

1.592.78

3.88

0

5

10

15

20

$c/

lbs

UTZ premium distribution 2016

Average premium Min premium Max premium

Average UTZ Coffee Premium 2.89 $c/lb

The average UTZ premium increased for Guatemala, Colombia, Kenya, Ethiopia, Indonesia and Uganda

In most countries we see large differences between premiums entered in the GIP

UTZ premium calculations are based on transactions data recorded in the GIP. Values above 20 $c/lbs are excluded from analysis.

3.3 Premium transparencyImproving our analyses

UTZ premium distribution

1 2 3

We works towards improving our knowledge on the use of premium

We collect additional information during the audit

First data is available, but still needs validation from the field

2.89

3.373.10

3.46

1.61

2.87

2016 2016 with new threshold

Global Arabica Robusta

Global average UTZ coffee premium ($cents/lb)

After consultation, the maximum acceptable threshold for entries in the GIP will be set at 30 $c/lbs.

This change will change and improve our analysis of the UTZ premium

4.1 Global Estimated Production The UTZ Certified coffee volume (estimated production) increasedwith 6% in volume mostly driven by increase in Arabica

20% more UTZ certified coffee in Latin America Brazil estimated production grows despite 2 members leaving the program Peru and Nicaragua also contributing to the increase woth new members

19% decrease in estimated production in Asia Due to decrease in production in Vietnam

Estimated production in Africa remained stable DR Congo, Burundi and Rwanda compensate for decrease in Uganda and Kenya

17% more certified Arabica volume, 22% reduction in Robusta volume

715,648 726,591 729,918

821,399 870,102

2012 2013 2014 2015 2016

MT

Gre

en c

off

ee e

qu

ival

ent

Estimated production is based on license information from licenses valid on December 31st 2016

6%

4.2 Estimated Production per Origin Country

80% of UTZ certified coffee volume comes from 5 countries: Brazil, Vietnam, Honduras, Peru and Columbia

Largest growth in Brazil (21%) and Peru (108%) Largest decline in Vietnam (23%) and Uganda (25%)

300,745

172,620

82,469 75,551 74,564

39,320 36,046

15,593

73,193

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Brazil Vietnam Honduras Peru Colombia India Nicaragua Uganda Others

MT

Gre

en c

off

ee e

qu

ival

ent

2014

2015

2016

Estimated production is based on license information from licenses valid on December 31st 2016*Other includes: Mexico, Ethiopia, Guatemala Indonesia, Costa Rica, Kenya, China, Tanzania, Papua New Guinea, Rwanda, Burundi, DR of Congo, Panama, Bolivia, Dominican Republic, El Salvador & Zambia

5. Supply-demand trendsIncrease in supply/demand ratio to 37%, because demand grew faster than supply for certified coffee

The supply-demand ratio measures the share of estimated production volume that was soldas UTZ

The supply demand ratio for coffee that was sold as UTZ increased for all regions Latin America increased by 24% from 2015 to 2016 driven by increase in supply and a

bigger increase in demand for UTZ coffee from Latin American countries Asia increased by 24% from 2015 to 2016 due to stable sales but a drop in supply Africa decreased to 18% due to decrease in sales and stable production volumes

31%

35%

29%

37%

2013 2014 2015 2016

% of estimated production sold as UTZ42%

27%

18%

Latin America Asia Africa

Supply demand: 2016

Supply Demand is based on first buyers sales and estimated production 2016. It indicates a trend but not an absolute number.

6. Multi-certification Increase to 55% due to a growth in organic-UTZ certification; double certification with Rainforest Alliance is predominant

55% of estimated production is also certified for one or more other schemes Rainforest Alliance (RFA) was once again the most common in combination with UTZ Increase in volume both UTZ and Organic certified

Multi certification is most common in Africa (79%), followed by Latin America (65%) and Asia (25%) Multi-certification increased in all countries except Vietnam, Indonesia, Ethiopia and Burundi

52%

14%

45%

15%

52%

14%

45%

15%

55%

15%

45%

22%

Multi-Certified Fair Trade RFA Organic

2014 2015 2016

Multi-certified represents the volume of estimated coffee production that was UTZ certified as well certified for one or more of the following schemes: Fair Trade; Rainforest Alliance; Organic

In 2016, 37% of certified coffee was sold as UTZ, an increase from2015

Multi-certification increased to55% of the volume mainly due tonew certificate holders from Peru joining the program who are alsoOrganic certified. This is related toan increasing demand for thecombination UTZ-organic in especially Northern Europe

The average premium paid for a pound of UTZ coffee stabilized around 2.89 $cents after a year by year decrease.

Increase in supply-demand ratio & multi certification

Continuous reach with a stable supply base

Small increase in estimated production volume and certified area

First producers joined UTZ in Laos and Zambia

Over half a million farmers and workers reached

Increased demand for UTZ reflected in 35% increase in first buyer sales; 17 out of 20 top buyers increased their UTZ coffee volumes

Increase is due to new andgrowing commitments to source certified coffee by partners in Western and Northern Europe andthe US

Demand for UTZ coffee in Brazilian and other Arabica coffee grew, while demand for Vietnam and other Robusta coffee decreased

Increase market demand for UTZ certified coffee

7. ConclusionsContinuous reach of the UTZ Program in both origin and market