A Fair Trade-certified coffee means that the coffee has been audited throughout the supply chain to meet certain sustainability and labor standards.
Coffee sold through a Fair Trade organization also makes its coffee grower and producers pay a minimum price, higher than the commodity price of coffee. There are several organizations (such as Fairtrade America, Fairtrade International, and Fair Trade Certified) that certify coffee as Fair Trade.
Direct Trade is a catch-all term for sourcing processes that get a coffee roaster as close to dealing directly with the coffee farmer as possible. While Fair Trade and Direct Trade might have similar goals of fairly paying coffee producers in the end, the Fair Trade label is a third-party certification while Direct Trade is more of an ideology. If you see a Direct Trade logo on a bag, it’s only “certified” by the coffee roaster, based upon their specific internal definition of Direct Trade coffee.
The Fair trade movement brings attention to the fact that coffee farming is a risky endeavor from which farmers often struggle to make money. And as the coffee market is currently facing a price crisis, a Fair Trade certification is one way to ensure that every farmer is paid a Fair Trade premium that is above base commodity price, hopefully bringing them closer to earning a sustainable living.
As with any certification, the Fair Trade program costs money, and not every small farmer, coffee producer, or producer group has the capital to participate in the certification process to acquire a fair trade label.
Many producers, especially of specialty-quality goods, such as coffee, do find increased premiums based on quality whether in direct trade relationships with roasters or more commonly long-term relationships with coffee importers and exporters. That said, coffee drinkers who buy exclusively certified Fair Trade ensures a minimum amount of compensation at a certain point in the supply chain.