Cooperativa dos Agricultores Familiares de Poço Fundo e Região (COOPFAM)

Cooperativa dos Agricultores Familiares de Poço Fundo e Região (COOPFAM)

COOPFAM is a Fair Trade Certified association of coffee farmers from Minas Gerais in Brazil (Fair Trade USA 2016). The organization was established to address the fundamental needs of the farmers including eradication of poverty, an aspect that would improve their standards of living. The Association would also curb emigration from this location hence sustained the presence of gifted and interested farmers an element that would lead to the growth in this area. This would be achieved through increased productivity an element that would depend on strategic planning in the agricultural sector. Growth in productivity led to certification by the Fairtrade International (FLO) opening doors for exportation to the United States and other parts of the world. Citing related literature, we shall establish that an informed SWOT analysis can better the performance of the firm regarding productivity and marketing of its coffee products, an aspect that would earn the fair trade group member an edge over their competitors.

COOPFAM enjoys a range of strengths that it can exploit to reshape its marketing strategies. A unique strength that the firm can use is the growing consumer awareness of environmental issues and social needs (Brønn et al. 2001). The association would have to be environmentally conscious in the line of productivity and marketing. This includes activities in the firms and use of various items as inputs in coffee production. Many buyers of the exports are concerned about what is used in the process of growing, processing and exporting the final product. By use of certified inputs in farming, that is health sensitive increases faith in a given product. The potential clients would be willing to purchase the product. This comes with loyalty at the end of the day. Fair trade member groups ignore such aspects an aspect that lead to low preferences from the importers of such products. Strict adherence to such values would place COOPFAM at a better position about its competitors. In the line of branding and packaging, another environmental issue arises. Use of materials that lead to pollution and non-biodegradable wastes is an aspect that has been condemned by many markets. COOPFAM is conscious of these trends. It will find favor in potential buyers if it chooses the best and environmentally friendly materials in packaging. Ideally, many governments are urging many organizations to be socially responsible. FLO has regularly considered how its certified members are working with their immediate environment in the line of their activities. COOPFAM can earn attention from flow by choosing to engage actively with the members of the community in conservation and maintenance of the environment. This would serve to find touch with the international standards set by the global institutions that are concerned with such issues (Brønn et al. 2001). The overall effect is increased attention from potential buyers of their exports. The firm would increase its volume of sales an aspect that would serve to help achieve their overall goal of eradication of poverty. This would have COOPFAM at a better position over their competitor. Environmental consciousness would act as a vital marketing tool. The organization would have a social responsibility appeal among the large cast of coffee consumers all over the world. It would win customers even from such places as supermarkets in importer countries as well as specialized groceries.

Strength is another fact that fair trade coffee has earned a prime market position among all other channels of coffee supply (Fair Trade USA 2016). The approach used by FLO has not experienced any degree of resistance from coffee consumers. This is well catered for by the standards set by FLO in the certification of a coffee growers group. Being certified, COOPFAM can take advantage of their membership. There is a sense of transparency in the organization an aspect that offers the association a fair chance to win trading partnerships. Through the production of quality products, the organization can woo big trading partners who would help improve their level of earning (Raynolds et al. 2004). Such marketing partners would shape COOPFAM marketing strategy. There would be collaboration in significant and critical areas in reaching out to potential customers. The advertisement costs would be shared. The saved financial resources would be used to help adjust spending and thus be channeled to other areas of production. Increased productivity would earn the companies an edge over their everyday competitors. An aspect that is helping members of FLO is their global experience in marketing. They provide the most update information on the current trends in the market. They guide their members on what to expect in peak and low seasons. As such, members shape their decisions on when to market, or hold back their products. COOPFAM can take advantage of these situations to project possible changes in the forces of demand and supply. They would know when to increase or regulate supply in the opposite direction. This is not common with FLO non-members. They would market blindly and thus suffer losses enabling COOPFAM to survive the competition.

An additional positive aspect is the ability of Fairtrade to address the coffee crisis (Bacon 2005). The coffee market is a delicate arena. It is vulnerable to the fluctuation of prices that come with economic recessions and other aspects. This affects the ability and willingness of the consumers to spend. The farmers happen to be on the receiving end. There happen to be cases of market shifts. The factors that affect buying and selling could change in a negative sense. This demands the experience of the markets to address the issues. Fairtrade fits this measure. From gathered experiences, it resolves matters regarding recessions to ensure that farmers do not suffer losses. COOPFAM can exploit this whole aspect for its good. Working diligently with FLO and trade members would address the situation. With the good strategy in planning and anticipation, marketing can be done within the right period. The association can work on those issues as release dates, and availability in the market. With such an informed approach, the organization would beat its competitors in the long run.

Through gathered experience over the years, COOPFAM has designed the most cost efficient structure for its members and the entire association. The association has been in place for several decades, earning a reputation for itself regarding the ability to design the most cost sensitive approaches in production and the marketing approach. The method of farming is based on informed approaches as dictated by experience and gathered knowledge from FLO. The inputs and services employed in agriculture are standard and are used in a manner that fits the budget of the farmers (Vieira et al. 2006). Integrated methods of farming are being used to control pests, weeds, and diseases. This is saving COOPFAM from unnecessary expenses. The extra funds are being channeled to other segments of production and expansion. Additionally, the organization provides intense training for its members on the most practical approaches to farming. Such training conforms to the standards set by global institutions that approve coffee farming. This places the members in a better position to practice cost-effective farming methods leading to increased profits. Such proceeds are used in the expansion of the farming activities and meeting the basic needs of the farmers.

While the association has established cost-effective measures, it is enjoying a diverse set of capital strength. The association has been in existence for several decades and has been able to create infrastructure and basic resources that are benefiting its members.  These resources are being used in the line of production, harvesting and coffee processing. They happen to be durable, and with maintenance, they could serve the association for long. This is a valuable investment for the farm, as all funds realized will go in books of accounts as profits. The organization will be able to expand further in the face of competition. It would be able to hire the most efficient marketing specialists who would offer the most advanced methods of marketing. Advertising would be high-tech and thus, be able to reach a large number of diverse customers. With capital resources at hand, COOPFAM can extend services to other associations for a fee. This would serve to build on the pools of revenue avenues available. The firm would thus spread risks across various segments of the coffee industry increasing chances of survival (Mohan 2007). It would have an expanded source of revenue. It would outdo its competitors in the end.

Despite this range of strengths, COOPFAM has had some weaknesses as other Fairtrade producers. As a member of FLO, the company has to meet and fulfill contracts that feature such parameters as a given amount of coffee. Failure to fulfill these contracts comes with some consequences that affect the association adversely. Apparently, inability to meet the stated capacity is attributed to poor harvest during the peak and low seasons (Taniwaki et al. 2003). This could be attributed to such factors as pest and diseases. The coffee sector is being affected by a set of evolving issues. New pests and weeds are affecting the segment. New diseases are being registered every day. This is affecting the cost of production in the long run. Farmers have to struggle with such costs leaving the association vulnerable. This affects the amount of coffee produced at a time when COOPFAM is a trade contract. The organization suffers hugely. Another common aspect is vulnerability to weather conditions. There have been cases of El Nino and La Nina rainfall in Brazil an aspect that is shaping farming (Haylock et al. 2006). The weather patterns associated with this kind of phenomena tend to affect coffee production lowering the volume available for Fairtrade. The outcome is adverse for COOPFAM and its members.

Another weakness in the industry is vulnerability to coffee price volatility (Dehn et al. 2005). Farmers are concerned about the costs of Fairtrade coffee prices. They occasionally lose confidence as attributed to lack of consistency. Apparently, members have frequently questioned the ability of FLO to act timely in response to such price volatility. This is affecting the amount available for supply an element that is leaving members frustrated. While other segments of the agricultural sector are comfortable, the coffee sector is frustrating farmers to point where they are incapacitated to plan ahead. More so, Brazil is characterized with an off-year spell an aspect that affects the amount of coffee in the market. This leads to soaring prices an element the willingness of the consumers to spend. The stock available does not meet the demand, and the high prices reached the coffee market.

While such weaknesses may sound lethal, there are some opportunities for CCOPFAM to exploit. The coffee fraternity has a chance to develop the Coffee Crisis Committee. The committee will serve as the key product advisory council. The primary activity will involve providing and formulating solutions that address the everyday issues affecting the coffee sector (Hallam 2003). This will serve to work on the standards of the product, the participating institutions, and Fairtrade members. The committee will be committed to addressing the issue surrounding fluctuation of prices. Stable prices will allow members to plan and strategize on marketing approaches. Nevertheless, this arena is affected by the need for such aspects as premiums in the event of such safety measures in the likes of market derivatives. Framers would have a chance to cushion themselves from the possibility of adverse outcomes. This would serve to cut losses. The committee would establish better policies that would govern Fairtrade institutions and associations as COOPFAM. There is a chance for pre-financing the coffee crop an aspect that would enable member associations to carry out their activities.

Another opportunity is the increased and constant global consumption of coffee (Lewin e al. 2004). Many societies in the West and the world over have made use of coffee as a stimulant more of culture. It is served in homes, offices, and in restaurants. It is more of a habit to have coffee these days. It has been evident that many cannot do without an aspect that could be attributed to addiction. This suggests a ready market for coffee. COOPFAM can exploit such market by increasing and expanding the avenues of production. This happens at a time when outstanding coffee restaurants in the world are opening new lines of consumption. Starbuck and Nestle are leading in this area. COOPFAM is guaranteed of sales in this case.

Despite the opportunities, there are possible threats to COOPFAM and other coffee growers association. This comes in the form of alternative beverages that include tea and cocoa. Many stimulants’ users are spoilt for choice at the expense of coffee farmers. Many are finding tea appealing an aspect that could see coffee have a diminishing market. The availability of cocoa has had some ditch coffee altogether. With such sort of situation, COOPFAM would have to find ways to spread risks to other avenues. That would come from a cost and expensive investment. The association would experience losses and with low chances of survival. One other threat has been the adverse climatic changes (Jaramillo et al. 2009). The climatic conditions in the region are not predictable as attributed to such elements as global warming. As earlier mentioned, this affects the annual harvest. There are losses when the inputs and other expenses are put in context. This happens at a time when coffee prices happen to be volatile. Farmers are left vulnerable to losses and possible penalties in case contracts are not fulfilled. Major threats as earlier highlighted are pest and diseases (Wintgens 2009). They affect the quality and amount of coffee realized. With low production, COOPFAM is at risk of losses. There would be the need to address the issue an aspect that calls for extra financial commitments. With poor quality coffee, the consumers would choose other brands.

Concisely, COOPFAM is a coffee grower association that can have an edge over its competitors as facilitated by a suitable marketing strategy enabled by the company’s market position, diversified sources of revenue, significant capital strength, and efficient cost management structures. It has an opportunity to grow even further by exploiting chances to have a Coffee Crisis Committee that can address the key issues affecting the industry regarding marketing and production. It can use the increased global consumption by expanding further into production. However, vulnerability to price volatility would have its survival at stake. This could be further worsened by the failure to fulfill contracts with FLO. Moreover, adverse climatic changes, pest, and diseases affect the amount and quality of its produce. There would need to set up measures to address such challenges.

 

Bibliography

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Raynolds, LT, Murray, D and Leigh Taylor, P 2004, ‘Fair trade coffee: Building producer capacity via global networks,’ Journal of International Development, vol. 16, no. 8, pp. 1109-1121.

Taniwaki, MH, Pitt, JI, Teixeira, AA, and Iamanaka, BT, 2003, ‘The source of ochratoxin A in Brazilian coffee and its formation in relation to processing methods,’ International Journal of Food Microbiology, vol. 82, no. 2, pp.173-179.

Vieira, LGE, Andrade, AC, Colombo, CA, Moraes, AHDA, Metha, Â, Oliveira, ACD, Labate, CA, Marino, CL, Monteiro-Vitorello, CDB, Monte, DDC and Giglioti, É, 2006, ‘Brazilian coffee genome project: An EST-based genomic resource,’ Brazilian Journal of Plant Physiology, vol. 18, no. 1, pp. 95-108.

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