Towards Living Incomes in Coffee Supply Chains: New Retailer Initiative starts project implementation
The German Retailers Working Group launched a joint project on living incomes to strengthen the livelihoods of smallholder coffee farmers in Honduras and Peru.
Ensuring living incomes in global supply chains has become a defining challenge of our time – and it is far more than a matter of social justice. Beyond tackling inequality and poverty, it is about strengthening the resilience, sustainability, and long-term stability of the businesses that depend on these supply chains. Ultimately, this also means securing access to commodities, and, in the case of coffee, preserving the very possibility for us as consumers of enjoying it in the future.
After having started a first project on living wages in the banana sector, the German Retailers Working Group launched a joint project on living incomes to strengthen the livelihoods of smallholder coffee farmers in Honduras and Peru. dm-drogerie markt, Kaufland, Lidl, and REWE Group want to fulfill their responsibility as European companies to promote living incomes in their supply chains. The initiative seeks to create systemic change across the coffee sector by advancing living incomes through collaborative, pre-competitive action rather than individual solutions.
Working Together to Create Lasting Change – The Three Strategic Objectives
The project pursues a holistic approach anchored in three strategic objectives:
1. Responsible Purchasing Practices (RPPs): By fostering transparency, long-term trade relationships, and price mechanisms that help closing income gaps, retailers will reshape supply chain frameworks in ways that make living incomes achievable.
2. Resilient and Efficient Production Systems: Strengthening producer organisations, increasing yields, diversifying income sources, and promoting gender equality are central to helping coffee farmers achieve stable and sustainable household incomes.
3. Collaboration and Policy Engagement: Through partnerships with standard setting organisations, national and international sector initiatives, the project aims to align agendas, leverage synergies, and strengthen the enabling environment at sector and policy levels.
These objectives are complemented by a cross-cutting focus on gender equality and the empowerment of marginalized groups, including women, indigenous communities, and youth.
Turning Strategy into Action: The Roadmap to 2027
Based on the three defined objectives, the Working Group elaborated a working plan for the project’s implementation until October 2027. The Retailers Working Group has set out a clear sequence of actions to make its vision of living incomes a reality. The journey begins with mapping supply chains of their private-label products in Honduras and Peru. Knowing more about the supply chains will allow to assess the concrete priorities for implementation of the focal areas’ measures at farm and cooperative level. Therefore, all relevant stakeholders will be consulted on needs, already existing activities and respective projects and programmes at regional and national level. Actual household incomes of the participating farmers will be evaluated according to the measurement methods by the Living Income Community of Practice (LICoP) in a baseline assessment at the beginning of the project.
Building on this foundation, the group seeks to develop a joint understanding of Responsible Purchasing Practices (RPP) in the coffee sector (aligning with the Grounds for Sharing process led by the Global Coffee Platform). In a further step, recommendations and action plans will be developed on how retailers can adapt coffee purchasing practices. On the other side, the group will work together with Fairtrade Germany and International in developing and piloting mechanisms of a Living Income Reference Price.
At the same time, local partners in Honduras and Peru support farmers and cooperatives through trainings and technical assistance. The focus is on boosting productivity, improving financial literacy, and promoting sustainable practices such as agroforestry and crop diversification – all of which contribute to more resilient livelihoods. Strengthening capacities at producer organisation levels is another success factor defined by the project.
Finally, the Working Group is engaging with national and international stakeholders to expand the project’s impact. By joining forces with initiatives and exploring innovative tools, such as digital systems for traceability and monitoring, the group aims to scale solutions across the sector and ensure that the benefits extend well beyond the pilot phase.
Regular monitoring, mid-term evaluations, and transparent reporting will ensure accountability and continuous learning throughout the project cycle.