Ethiopia: Coffee Trademarking and Licensing Project
Light Years IP (LYIP), on request from the Ethiopian Intellectual Property Office (EIPO) and the unions of Ethiopian coffee cooperatives, has assisted in the design and implementation of a project that will enable poor growers and coffee sector workers to capture a greater share of the retail price that Ethiopian fine coffees earn in foreign markets. With support from DFID in 2005 and 2006, LYIP is assisting Ethiopia register trademarks for Harrar, Yirgacheffe, and Sidamo in 40 countries - and eventually four other well-known Ethiopian fine coffees with good reputations. Already trademarks have been secured in over 30 countries.
As Ethiopia secures trademarks for the names of its fine coffees, the Ethiopian Intellectual Property Office has initiated a program to license the use of the coffee names to individual coffee companies around the world. These licenses, issued free of charge to coffee companies, will allow Ethiopia to work with the industry to build the value of its coffee brands. Several companies already have signed these agreements, confirming that they agree with the claim to ownership and they welcome greater brand security and brand management. An improved future for the Ethiopian coffee sector will benefit specialty coffee importers and retailers in the U.S. and elsewhere.
Why here? Why now?
Ethiopia is the birthplace of coffee. Coffee makes up around half of all Ethiopian exports and directly supports the livelihoods of millions of Ethiopians working in the coffee sector. The global over-supply of commodity coffee over the last decade has led to a sharp decline in Ethiopia's coffee export income. Reduced coffee income is severely affecting the lives of coffee farmers in Ethiopia.
Ethiopian coffee income should – and can – be higher. In addition to commodity coffee, Ethiopia produces many very high quality coffees. Ethiopia's finest coffees, particularly, Harar, Sidamo and Yirgacheffe, are considered to be among the world's best. Each sells at a premium over commodity coffees in world markets and draws high retail prices.
However, Ethiopia is currently exporting these coffees at something very close to commodity coffee prices. Currently, the Ethiopian coffee sector captures only around 6%-10% of the fine coffees' retail price, barely covering the production cost. The trademark program will help Ethiopia to better manage distribution and the brand reputation of their export coffees so as to increase the amount that reaches the producers. In comparison, producers of Jamaican Blue Mountain Coffee capture 45% of their product's retail price, which is acceptable to importers and distributors. The additional 39% of intangible value secured by one developing country is an illustration of the maximum potential increase in income through this project. It is clear that it is possible to increase the income to producers of coffee in a way that is both possible and sustainable within the industry.
Engaging Primary Producers and Exporters
Raising awareness among coffee workers is critical to the success of this project. It will ensure that coffee farmers and coffee sector workers understand the initiative and effectively participate to gain their full increase in export income reaching Ethiopia. Results-oriented awareness activities will empower stakeholders to come together to maximize national long-term income: this will enable coffee sector stakeholders to successfully participate in regional and national level stakeholder consultations, to determine increased rural income strategy for fine coffees, to demand an appropriate share of coffee income, and to monitor and provide feedback on how licensing and pricing strategies at the national level are impacting the livelihoods of coffee farmers and coffee sector workers.
LYIP is developing training and communication tools to educate Ethiopian's about the project. LYIP is partnering with locally-based NGOs such as Oxfam Ethiopia, to raise awareness among all coffee stakeholders, farmers, coffee transporters, farmer cooperatives and the new farmer monitoring groups that have been forming recently.
