Green Coffee Buying https://perfectdailygrind.com/category/green-coffee-buying/ Coffee News: from Seed to Cup Tue, 24 Oct 2023 08:59:15 +0000 en-GB hourly 1 https://wordpress.org/?v=6.4.2 https://perfectdailygrind.com/wp-content/uploads/2020/02/cropped-pdg-icon-32x32.png Green Coffee Buying https://perfectdailygrind.com/category/green-coffee-buying/ 32 32 How much do competition coffees cost? https://perfectdailygrind.com/2023/06/cost-of-competition-coffee/ Wed, 07 Jun 2023 05:31:00 +0000 https://perfectdailygrind.com/?p=104912 Since its inception in 2000, the World Barista Championship has showcased some of the most exclusive and high-end coffees in the world. Along with other World Coffee Championships – most notably the World Brewers Cup and World Coffee Roasting Championships – choosing which coffee to use at the WBC is one of the most important […]

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Since its inception in 2000, the World Barista Championship has showcased some of the most exclusive and high-end coffees in the world. Along with other World Coffee Championships – most notably the World Brewers Cup and World Coffee Roasting Championships – choosing which coffee to use at the WBC is one of the most important decisions a competitor can make.

A widely popular choice among many is Gesha – a variety known for its exceptional quality and flavour profile. In recent years, however, we have also seen more and more competitors opt for lesser-known arabica varieties – and even “forgotten” coffee species

Sourcing coffee for the World Coffee Championships is a lengthy process in itself, but another pertinent question remains: how much do competition coffees cost? Moreover, can we even generalise this question, or is it very much dependent on each coffee?

To find out, I spoke to a national Barista Champion, a national Brewers Cup winner, and a US Barista Championship competitor. Read on for more of their insight on the costs of competition coffee.

You may also like our article on how competitors source coffee for the World Barista Championship.

Baristas prepare their competition coffees for a WBC event.

How do WCC competitors source their coffees?

For any World Coffee Championship competitor – particularly at the WBC and WBrC – ensuring your routine stands out is essential. Choosing which coffee to use on stage is at the heart of this.

An option for many competitors is to work with coaches and taste a variety of coffees in blind cuppings. This allows them to select a coffee purely based on flavour profile, rather than looking for a specific variety or processing method.

If they have the financial means to do so, some competitors will visit farms to find their competition coffee. Here, they are able to work more closely with producers to either decide on a specific coffee, or have more input on processing techniques to develop a certain flavour profile.

Harry Ko is a quality control roaster at Bennetts in Australia. He is also the 2022 Australian Brewers Cup Champion, and placed eighth in the world final that year.

For his routine, Harry tells me he used a Sidra coffee from Colombia which was processed using a “heavy fermentation” method. He explains that he worked closely with producers to process the coffee.

The Gesha variety has been the darling of specialty coffee for some time now. It took the industry by storm in 2004 when it received US $21/lb at the Best of Panama (BoP) auction that year. This was a record high at the time.

Fast forward to 2021 and a honey processed Gesha produced by Elida Estate sold for an eye watering US $6,034/lb – by far the mst expensive coffee in the world.

So it comes as no surprise that many World Coffee Championship competitors have used Gesha in their routines. For instance, of the 11 World Brewers Cup champions from 2011 to 2022, eight used Gesha – including 2022 WBrC Champion Shih “Sherry” Yuan Hsu.

However, it was also during previous World Coffee Championship events that we saw more unusual and lesser known coffees presented on stage. Some of these included:

  • Coffea eugenioides – used as a single origin by 2021 World Barista Champion Diego Campos, and in a blend by 2021 WBrC Champion Matt Winton
    • Eugenioides was also used as part of a blend by 2021 WBC runner-up Andrea Allen and Hugh Kelly, who placed third at the 2021 WBC, and used eugenioides and liberica
    • Morgan Eckroth, 2022 US Barista Champion, also used eugenioides in last year’s competition
  • Sidra – used by 2022 World Barista Champion Anthony Douglas and 2019 World Barista Champion Jooyeon Jeon

How can the price of competition coffees vary?

Harry tells me that the price of his Sidra coffee was around AU $30/kg (US $19.73). However, when freight and customs costs were also accounted for, the price doubled – but Harry acknowledges that this is still on the lower end of the price range for competition coffee.

“The price you pay for coffee isn’t just about its cup score and flavour notes,” he says. “You also have to account for the harvesting and processing, as well as the export.”

The cost of other particular coffees, meanwhile, can be much higher.

Ricardo Azofeifa Mora is a barista, Q grader, and exporter in Costa Rica. He is also the 2022 Costa Rican Barista Champion. He tells me that from his experience, competition coffees can range from US $10 to $50/lb. 

Veronica Pearl is the founder of Glitter Cat Barista, and a coffee educator and consultant. She also placed second in the 2018 US Barista Championship. She tells me she has seen competitors use coffee which costs upwards of US $150/lb.

Harry, meanwhile, says that while sourcing his coffee for the 2022 Australian Brewers Cup, he came across coffee priced at a staggering US $10,000 per kg. He adds that this coffee was far over his budget of AU $200 (US $131.29) per kg. 

Who pays for these coffees?

It’s fair to say that most baristas can’t pay for competition coffee out of their own pocket. Even with credit cards and loans, competitors will often go through many kilograms of coffee to dial it in correctly. So how do they end up using them in their routines?

One option is for sponsors to pay for a competitor’s coffee. Sponsors can be their employer, mentor, or another company or organisation.

“More recently, we have seen a rise in independent competitors,” Veronica tells me. “There are also quite a few roasters now who will pay for competitors’ coffees, which can eat away their profits.”

Harry explains that for the majority of his seven years of competing, he has split the costs of coffee with his employer. For the 2022 regional Australian Brewers Cup, he says he paid for his coffee. For the national Australian Brewers Cup, meanwhile, his employer paid for his coffee.

Ricardo explains that last year, he received full funding for his competition coffee as part of an initiative to promote Costan Rican coffee on an international level.

“At last year’s WBC, I used coffee from my farm, Cafetalera Orígenes, and I was sponsored by Corazón de Jesús farm,” he adds. In his routine, Ricardo used Coffea sessiliflora, which is native to Tanzania and Kenya, but was provided by the Tropical Agricultural Centre for Research and Education (CATIE) in Costa Rica.

A World Barista Championship judge watches competitors.

Do higher coffee prices put some competitors at a disadvantage? 

The conversation around the exclusivity of the World Coffee Championships (particularly the WBC) has been ongoing for some time now. The widespread trend of using more high-end and sought-after coffees at the WBC and WBrC is certainly part of this exclusivity, as these coffees tend to fetch higher prices.

At the same time, new and intriguing coffee species and varieties – as well as innovative processing methods, brewing techniques, and sensory profiles – is what makes these competitions so exciting and high profile.

However, we do also need to acknowledge that coffees which come with a higher price tag will inevitably ostracise many competitors who simply can’t afford them.

“The more money you have, the more likely that you will excel in competitions – particularly the WBC as there is no compulsory round,” Veronica explains. “And until we can find a way to balance the scales, the winners of these competitions will typically be from more economically-developed countries, which tend to be consuming countries.”

But Veronica explains that barriers to competing at the World Coffee Championships aren’t just limited to the price of coffee.

“Competitors from consuming countries usually have a unique advantage, mainly because they have the opportunity to choose coffee from any producing country,” she says. “They are also more likely to be able to afford more expensive coffees.

“Competitors from producing countries are usually more limited to using coffee which grows within their borders,” she adds. “To be clear, a winning competitor and their coffee can come from any country, but as the judging and rules stand now, there is a bias towards more expensive coffees from a select few countries.”

Other factors to consider

When it comes to sponsorship, Harry explains it can be difficult for some companies and organisations to fund competitors – especially until baristas have already won competitions as a means of “proving” themselves. He says, for example, that the competition entry fee in Australia alone is around AU $300.

Besides paying for coffee and competition fees, WBC and WBrC competitors also need to consider a number other costs, such as:

  • Training and coaching
  • Travel and logistics, including visas
  • Equipment

“Moreover, paying for more expensive coffee doesn’t necessarily guarantee that you will win,” Ricardo says.

In line with this, both he and Harry agree that competitors should focus on other aspects of their routines.

“If using an expensive coffee was the only way to win, I wouldn’t participate in the competition,” Harry says. “I believe that competitors can overcome this obstacle.

“Even if I know a particular, expensive coffee will win the competition, I’m probably not going to use it because I can still rely on my sensory and technical skills,” he adds. 

Similarly, Ricardo believes that competitors from producing countries can give themselves an edge if they are closer in proximity to coffee farms.

“We usually have better access to a more diverse range of coffee,” he says. “But ultimately, you need to know how to use these coffees to win.

“In my case, I take pride in representing Costa Rican coffees,” he adds.

A coffee competitor explains his choice of competition coffee to judges.

How would we make competition coffees more accessible?

Making the WCC more accessible – especially the World Barista Championship – is certainly an important part of achieving true sustainability in specialty coffee. Ultimately, using more “traditional” or less expensive coffee varieties and species could be a big part of this.

Harry, however, doesn’t think that the trend of using more accessible coffees at competitions will pick up – especially because flavour profile and innovation in processing methods are so important.

“It’s not necessarily about the price, but more high-end processing techniques and ‘rediscovered’ coffees are popping up more and more in competitions,” he says. 

Ricardo points out that with a seemingly renewed focus on using rare varieties and species, he sees prices actually increasing for competition coffees, as these coffees are difficult to produce at scale. Moreover, he explains that producers catering to WCC competitors tend to grow more high-end coffees, which are naturally less accessible and affordable.

Veronica mentions that price caps on competition coffee are unlikely to work, but she thinks rule changes could encourage competitors to source more affordable coffees.

Potential benefits

According to Harry, however, one of the more positive aspects of expensive competition coffees is that farmers can benefit. Not only do prices of the winning WBC and WBrC coffees usually increase in the following harvest season, but farmers can also receive support from the competitors with harvesting and processing. 

As part of a mutually beneficial relationship, competitors can help farmers grow more exclusive and ultra-rare coffees, and potentially diversify their offerings.

A coffee competitor prepares for a barista competition.

Extraordinary coffees naturally come with higher price tags – and so they should. These coffees are special and unique for a reason.

But that’s not to say they are guaranteed to win the World Barista Championship or World Brewers Cup. Ultimately, what matters more is farming best practices, processing methods, and the skills of the competitors themselves. 

Enjoyed this? Then read our article on whether World Barista Championship competitors always need to practise with official equipment.

Editor’s note: Quotes from Ricardo Azofeifa Mora were translated from Spanish into English.

Photo credits: Specialty Coffee Association, World Coffee Events, Nhan Trinh

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How do specialty coffee roasters buy rare lots at auction? https://perfectdailygrind.com/2023/05/specialty-coffee-rare-lots-auction/ Tue, 23 May 2023 05:31:00 +0000 https://perfectdailygrind.com/?p=104775 Every year, there are plenty of green coffee auctions that take place in the specialty coffee industry. Whether in-person or virtual, these platforms provide producers with opportunities to showcase their best coffees – and potentially receive higher prices for them. Moreover, some private auctions also grant roasters and green coffee buyers access to more limited-edition […]

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Every year, there are plenty of green coffee auctions that take place in the specialty coffee industry. Whether in-person or virtual, these platforms provide producers with opportunities to showcase their best coffees – and potentially receive higher prices for them.

Moreover, some private auctions also grant roasters and green coffee buyers access to more limited-edition or ultra-rare lots. In turn, these coffees can then be marketed as more premium and unique offerings. 

As part of this, auctions which focus on one specific variety or species (usually more exclusive coffee varieties such as Gesha) are becoming more popular.

To find out more, I spoke with Max Perez, owner of Finca La Hermosa in Guatemala, and Leonor Xiao, founder and green coffee buyer at Canasto Coffee Co. Read on for more of their insight.

You may also like our article on virtual coffee auctions.

Rare green coffee to be sold at a private auction

What are private auctions and how do they work?

Although private auctions are a relatively new concept in the coffee industry, green coffee has been traded at auction for centuries. Typically, green coffee auctions are hosted by importers, exporters, non-government organisations, or other industry stakeholders in producing countries.

Auctions are often held in person, but more and more are starting to take place online. This allows buyers from all over the world to attend – making them much more accessible. 

As with any type of auction, buyers place bids on different green coffee lots. Once an auction starts, buyers will bid in specific increments until all coffees have at least one bid each, or until at least a specific amount of time has passed where no bidding has taken place.

Prior to an auction, all submitted coffees are cupped and scored blind by professional Q graders. This is done using the Specialty Coffee Association 100-point scale. This is so the bidders have an idea of the level of quality for each coffee.

Moreover, at some competitions prior to auctions, all coffees must score at least 86 points to advance to the next assessment stage. Ultimately, this required level of quality has helped to drive innovation at green coffee auctions even further.

High quality & even higher prices

Over the past two decades, the prices paid for coffee at auctions have been increasing more and more.

The first example was in 2004. That year, Hacienda La Esmerelda sold one of its Geshas for US $21/lb at the Best of Panama (BoP) auction. At the time, this was a world record for the highest price ever paid for a coffee.

Fast forward to 2021 and a honey processed Gesha produced by Elida Estate sold for a staggering US $6,034/lb. This is by far the most expensive coffee in the world.

Naturally, these astonishingly high prices have influenced more and more producers to co-host their own private auctions.

A private green coffee auction is a useful way for producers or co-operatives to showcase their more exclusive and ultra-rare lots. To participate in these auctions, buyers must register online in advance. As there are also a limited number of spots available, registrants may have to pay a fee to take part in the auction. Roasters may also have to purchase samples of the coffees they want to buy beforehand.

Coffee cherries to be sold at a private Gesha Forest auction

Broadly speaking, specialty coffee places a lot of value on quality, transparency, traceability, and sustainability. In line with this, demand for higher-quality, more exclusive coffee varieties (and even species) has grown over the past decade or so.

“Private auctions are becoming increasingly popular because demand for more unique and exclusive specialty coffee is growing,” Max says. “These auctions offer buyers the opportunity to access limited-edition and rare coffee lots which aren’t usually available on the wider market.”

Max also explains how producers can use private auctions as platforms to market their coffees in different ways.

“These auctions also allow sellers to control the buying process, potentially generate higher profits, and create a sense of exclusivity around their coffees,” he tells me. 

Leonor agrees, saying: “After the auction, the producer can label the coffee as an auction lot to emphasise its exclusivity.

“Moreover, private auction coffee lots are usually small in size,” she adds. “This can mean that producers may receive a higher price for them because a single buyer will usually purchase their coffee.”

What about single-variety coffee auctions?

Alongside private auctions in general, the number of more niche auctions has noticeably increased over the past few years. These include:

  • Single origin auctions (with all coffees produced in the same country, region, or even farm)
  • Auctions which include coffees from a single producer, co-operative, or exporter
  • Single-variety auctions, which focus specifically on one variety of coffee

One example is the Gesha Forest auction by Finca La Hermosa, which will take place online on 5 July 2023. 

“The auction will feature a variety of our Gesha coffees, each with its own unique flavour profile, aroma, and characteristics,” Max tells me. “It will also include Gesha coffee lots from different origins, including Guatemala, Panama, Tanzania, and Ethiopia. 

“The lots (some of which are organic) will also be available in different processing methods, such as washed, natural and anaerobic,” he adds. “These different processing techniques showcase the versatility and complexity of Gesha coffee.”

Gesha is one of the most-sought after varieties in the specialty coffee sector. Known for its exceptional cup quality and its ability to receive high prices, the variety has dominated auctions over the past decade or so.

“The Gesha Forest project by Finca La Hermosa involves meticulous farming practices to grow, harvest, and process Gesha coffee to ensure the highest quality coffee possible,” Max explains. “The unique microclimate and volcanic soil of Finca La Hermosa, which is located on the slopes of the Acatenango volcano in Guatemala, make it an ideal environment for growing Gesha.”

Leonor tells me that the variety is particularly popular in East Asia, including in China, where consumers are often more willing to pay higher prices for more exclusive and rare coffee.

“Gesha always stands out on the cupping table as it usually receives higher scores,” she says.

Depulped and hulled green coffee

What are the benefits of buying rare coffee from private auctions?

For producers who have the infrastructure and financial resources, there are a number of benefits to hosting private auctions.

“These platforms are an opportunity to showcase producers’ hard work and dedication, potentially receive higher prices, and build long-term relationships with buyers,” Max says. 

“Private auctions can also promote transparency, traceability, and sustainability in the specialty coffee industry.

“Auctions like the Gesha Forest by Finca La Hermosa can showcase a producer’s commitment to sustainable and environmentally-friendly farming practices, thereby promoting a more responsible and conscious coffee industry,” he adds.

In terms of traceability, Leonor explains that auctions can be useful platforms for both farmers and roasters.

“Producers know where their coffee is going when it’s bought through auctions,” she says. “Private auctions can be a link between producers and roasters.

“Moreover, receiving feedback from roasters, traders, and producers will help to make auctions more meaningful and impactful,” she adds.

What about roasters?

When it comes to roasters, there are several advantages to attending green coffee auctions – especially for those who want to sell and market more premium and rare coffees.

“Roasters have access to more unique and exclusive lots,” Max tells me. “This enables them to differentiate their coffees and potentially attract a broader range of consumers.”

Looking at Gesha specifically, the variety is more commonly found in Panama and Ethiopia – and also recently in Colombia, too. Many specialty coffee consumers place significant value on more exclusive varieties sourced from new origins. For instance, sourcing coffee from farms outside of these origins, such as Finca La Hermosa in Guatemala, can be a unique selling point for roasters.

“By buying coffees from auctions, roasters have an opportunity to showcase their recognition of high-quality coffees, and thereby add value to their brand,” Leonor concludes.

A roaster holds green coffee in a jute bag

Private auctions, as well as auctions more generally, play a role in driving specialty coffee forward. For those who have the capacity and buying power to attend, they can experience some extraordinary coffees that they may not be able to find elsewhere.

With demand for more exclusive coffees only growing in certain markets, we’re sure to see private auctions continue to be a point of conversation in the coffee industry going forward.

Enjoyed this? Then read our guide to green coffee auctions.

Photo credits: Finca La Hermosa

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How has technology helped to democratise green coffee trading? https://perfectdailygrind.com/2023/04/how-does-technology-democratise-green-coffee-trading/ Tue, 18 Apr 2023 05:22:00 +0000 https://perfectdailygrind.com/?p=103714 Over the past century, the coffee industry has evolved in a number of different ways. From the increasing reliance on technology to a growing emphasis on sustainability, there have been significant developments across all areas of the supply chain. This includes sourcing and trading green coffee. It’s fair to say that historically, the global trade […]

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Over the past century, the coffee industry has evolved in a number of different ways. From the increasing reliance on technology to a growing emphasis on sustainability, there have been significant developments across all areas of the supply chain. This includes sourcing and trading green coffee.

It’s fair to say that historically, the global trade of green coffee has typically favoured larger and more established importers and roasters. Moreover, it was often a complicated process – with plenty of logistics and bureaucracy to navigate.

However, thanks to the growing prevalence of technology and online platforms in the coffee industry, it is now easier and more streamlined than ever to buy green coffee. This is true for small and medium-sized coffee businesses, too.

To learn more about how green coffee trading has changed over the decades, I spoke with three people at Covoya Specialty Coffee. Read on for more of their insight.

You may also like our article on what a green coffee trader does.

Farmer workers use washed processing methods for green coffee.

How has green coffee been traded through history?

The way we buy and sell green coffee has changed dramatically in the past 100 years. However, in order to understand how, we first need to look back at the history of the global coffee industry.

The coffee trade as we know it today is traced back to colonial structures in the 17th, 18th, 19th, and early 20th centuries. For hundreds of years, European colonial powers established commercial systems to grow and export coffee in Caribbean, Asian, Latin American, and African countries. In many cases, this was to the detriment of indigenous and local communities, as colonial powers often forced them to work as slaves on coffee plantations.

Many of these former colonies have since gained independence and we have largely abandoned colonial trade structures. However, the effects still linger in parts of the modern coffee industry. This is especially apparent when we consider that millions of smallholder coffee farmers are unable to earn a living income.

Buying coffee

Alongside this, over the past few centuries, the trade of green coffee has largely been exclusive to a small group of larger multinational importers, exporters, and roasters who dominated the global coffee market. 

Mike Ferguson is the Chief Storyteller at Covoya Specialty Coffee – formerly known as Olam Specialty Coffee. The company rebranded in November 2022 to better represent its values and mission. 

“Since 1956, traders bought and sold coffee in very large lots by the container,” he says. “In previous years, nobody would sell to you if you couldn’t buy coffee by the container.

“Today, however, it’s difficult to imagine such a steep barrier to entry for small to medium-sized coffee roasters,” he adds. “But it wasn’t that long ago that if you wanted to be in the exclusive club, membership dues were counted in containers and not bags of coffee.” 

One of the most prominent people to help change this system was Erna Knutsen – who coined the term “specialty coffee” in the early 1970s. While working at coffee brokerage B.C. Ireland in San Francisco in the 1980s, Erna saw the opportunity to sell coffee by the bag, rather than just by the container. Ultimately, this had a huge influence on direct trade as we know it today, where roasters can buy as little as one bag from a farmer or co-operative.

Moreover, Erna also was a pioneer in making the global coffee industry more inclusive for women. Historically, the industry – especially on the green coffee trading side – was heavily male-dominated.

What about transporting green coffee?

Phil Schluter is the Managing Director at Covoya Europe.

“The transportation of coffee has undergone major change,” he explains. “In my great-grandfather’s day, everyone used boats to transport coffee. 

“If you wanted to visit coffee farms or overseas clients to buy or sell coffee, you had to take a boat, which would take weeks,” he adds.

The introduction of steamships and railways across Europe and North America helped to facilitate the transport of green coffee from producing countries to major ports in both continents. Furthermore, while most coffee today is still transported by boat (albeit faster than it used to be), air freight is also emerging as an option.

Containerisation

Ultimately, more accessible transport has played a profound role in the global trade of green coffee. Since the 1970s, containerisation has become the most common way to transport coffee by freight. This is when you use large containers to stack and transport goods.

When roasters transport coffee this way, they usually have to pay for the entire container – whether it’s full or not. However, roasters can partner with other companies to spread the costs, making it more affordable.

“Now, in the specialty coffee market specifically, there is often no need for futures or hedging, little need for currency hedges, and margins are sufficient to cover what can sometimes be minimal overhead costs,” Phil tells me. “We have also seen a proliferation of smaller traders who only offer coffee from as little as one or two origins.

“This helps to forge more direct trade links and allows companies to trade smaller volumes of coffee at respectable profit margins,” he adds. “Conversely, the more commercial end of green coffee trading has become less accessible – it continues to operate on much thinner margins, requires traders to buy and sell certain volumes, and there are increasingly complex compliance regulations.” 

A coffee producer inspects cherries drying on raised beds.

How has technology helped to change green coffee trading?

Alongside these major changes in green coffee trading, technology has massively shaped how the global coffee industry operates. As well as making importing and exporting more streamlined and efficient, technology has also improved sustainability and transparency in the coffee supply chain.

The biggest change by far has been the emergence of the internet. Almost any coffee professional with access to the internet can now see plenty of relevant real time data. These includes market prices for coffee.

“All information which you would need to set up and run a coffee business is now widely available online,” Phil says. “This ranges from how to choose and source your green coffee to how to roast, brew, and serve it.”

Furthermore, the growing number of green coffee ecommerce platforms has made the trade of coffee much more accessible. People would trade green coffee over the phone or on paper prior to online platforms. 

Today, roasters and importers of any size have access to a wide range of coffees, including information on:

  • Origin
  • Processing method
  • Variety
  • Price
  • Certifications

As part of these platforms, green coffee buyers can quickly purchase coffee, as well as ordering samples and downloading paperwork.

Ross Nicholson is the Ecommerce and Marketing Manager at Covoya Europe.

“The transfer of ownership of coffee is still the same as it was,” he says. “We are bound by central coffee contracts like the GCC (US) and ESCC (Europe), so when a roaster buys coffee online, the coffee is effectively ‘contracted’ to them.

“With our website, there is no need to exchange signed contracts to purchase, or exchange multiple emails with a trader to find out the information you need,” he adds. 

Technology & sustainability

Ross explains that online platforms like Covoya help to provide buyers with more information about green coffee.

“Information which adds value to specialty coffee – origin, farmers’ stories, and cup profile – can now be found in many places online,” he says. “Alongside cup quality, this added value can be passed onto consumers, which helps to differentiate specialty coffee from ‘commercial’ coffee, and means farmers can receive higher prices.”

With direct trade becoming more prominent in the coffee sector, facilitating a closer connection between roasters and producers has never been so important. Communications technology (such as WhatsApp and video calls) help with this when in-person visits might not be possible.

“A factor that has not changed is that the trade of green coffee has always been primarily about relationships,” Phil tells me. “To do it successfully, we need to understand both those who grow and supply the coffee, as well as the people we sell to. 

“Green coffee suppliers like Covoya can only do that if we build relationships and trust,” he adds.

A green coffee trader breaks the crust while cupping coffees.

Why is it important that we democratise green coffee trading?

The global coffee industry’s increasing reliance on technology has been instrumental to its changes for the long term. However, why is it still so important that the trade of coffee green coffee remains open and accessible?

“Many coffee farmers still live in poverty, while many coffee professionals in the Global North occupy positions of relative privilege,” Ross says. “One of the most effective ways to change this is to diversify market access and scale our ability to share the stories and relationships which add value to coffee.

“If the barriers to entry in the specialty coffee sector are lowered, and the voices we hear can become more diverse, then coffee professionals can thrive and innovate sustainability for many decades to come,” he adds. 

Mike agrees, saying: “The more information and data that is shared across the supply chain, the more equitable the coffee industry can be.

Covoya’s online green coffee platform plays an important role in this way as it dismisses the historic concept of exclusivity, and helps to break down barriers for small and medium-sized roasters who want to buy bags of coffee,” he adds.

Mike emphasises that green coffee trading has become much more straightforward for small and medium-sized roasters over the past few decades.

“Even if you are new to roasting, or operate a very small roastery, you can buy green coffee,” he tells me. “Fifty years ago, there was almost no such thing as a start-up coffee roaster.

“Technology allows us to serve those very small roasters as they grow from selling bags of coffee to pallets to containers,” he adds.

Naturally, scaling is important for a roaster of any size in order to stay profitable. However, the level at which each individual needs and wants to scale can differ widely. 

Improving access for smaller-sized roasters

“The process of buying green coffee has been simplified to make discovering new coffees and finalising a purchase far more efficient,” Ross says. “Covoya’s platform streamlines this process. Firstly, with ‘discovery’, roasters can browse our full catalogue with live available inventory. 

“Every coffee has a unique page with information about the lot, terroir, producer, and region, as well as accompanying photos,” Ross continues. “Roasters can also request free samples, and when they are ready to buy, they can arrange delivery to their roastery with all logistical costs included at checkout.”

In turn, accounting for these differences is essential to keep green coffee trading accessible and inclusive – which Mike Ferguson discusses on the Getting Started with a Green Coffee Supplier episode of Covoya’s The Exchange Extra Shot podcast.

“Covoya aims to support our suppliers and buyers as they grow,” Phil explains. “We share our collective knowledge with those we work with to ensure that we trade in an equitable way.”

A coffee farmer holds a ripe red coffee cherry.

It’s no understatement to say that technology has revolutionised how we buy and sell green coffee. Coffee trading is now arguably more efficient and transparent than it ever has been. Moreover, there are certainly fewer barriers imposed on smaller roasters and importers than in previous years.

Similarly, we can also bridge the gap between producers and roasters.

“The farmers we work with around the world have their own experiences and challenges,” Phil concludes. “Roasters and consumers do too, so the more we can connect the supply chain and share stories, the more value we can add to coffee.”

Enjoyed this? Then read our article on simplifying green coffee grading.

Photo credits: Covoya Specialty Coffee

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Relationships are about more than just paying a good price for specialty coffee https://perfectdailygrind.com/2023/03/relationship-coffee-more-than-just-a-good-price/ Wed, 22 Mar 2023 06:21:00 +0000 https://perfectdailygrind.com/?p=102977 There are many actors involved in the coffee supply chain. From producers to traders to roasters to baristas, every industry professional adds value to the coffee sector. However, there are also a number of intermediaries in the coffee supply chain, including those who mill, transport, and export coffee in producing countries.  And while these actors […]

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There are many actors involved in the coffee supply chain. From producers to traders to roasters to baristas, every industry professional adds value to the coffee sector.

However, there are also a number of intermediaries in the coffee supply chain, including those who mill, transport, and export coffee in producing countries. 

And while these actors can certainly play an important role, their presence in the supply chain can often mean that producers end up receiving a smaller percentage of the final price of each cup of coffee.

This is especially important to note. According to the International Trade Centre’s Coffee Exporter’s Guide, producers often retain as little as 10% of the final retail price of coffee. Conversely, other supply chain actors, such as roasters, retain much more value.

In light of this, we have seen direct trade become much more prominent in specialty coffee over the years. This is a model which allows producers to work more closely with roasters in a manner which is mutually beneficial. As part of this, farmers can receive higher prices for their coffee.

However, when it comes to “relationship coffee”, there is much more to consider than just paying a higher price. To find out more, I spoke with Oscar Daza, a producer in Colombia, and Martin Mayorga, founder and CEO of Mayorga Coffee. Read on to find out what they had to say.

You may also like our article on whether direct trade is an effective model in specialty coffee.

Coffee farm workers sit in the back of a pick-up truck.

What is direct trade in specialty coffee?

Under more traditional trade models, farmers with no or little access to a local mill will sell their coffee as cherry. This means they often receive lower prices because less value is added to the coffee at the time of sale. This is especially pertinent as according to data from Enveritas, some 5.5 million smallholder coffee farmers currently live below the poverty line.

There is no formal definition of “direct trade” in the coffee industry. However, many roasters and producers understand the term as working in direct partnership with each other in a way that provides mutual benefits. Ultimately, the idea is to build a stronger and more resilient supply chain for all involved.

A large part of this revolves around roasters paying producers higher prices for their coffee. However, price isn’t everything – direct trade also often means more open communication between producers and roasters, as well as more transparency with consumers.

Communication and partnerships

“Communication is a key part of any relationship,” Martin tells me. “In the coffee supply chain, it’s even more important because some intermediaries can create barriers between producers and other supply chain actors, as well as being selective with the information they pass along to buyers.”

Martin adds that Mayorga’s direct trade model focuses on partnering with producers, rather than just buying from them. He emphasises that they work closely with producers towards achieving a shared vision of improving quality, sustainability, and financial security.

Mayorga Coffee only engages with producers when there is mutual agreement on quality, pricing, and contractual terms,” he explains. “We share information with farmers about how we operate, which provides them with a better perspective of our business.

“Producers can then talk freely with us about their needs and the challenges they face so that we can help one another to achieve our shared goals,” he adds.

A coffee farmer sorts ripe coffee cherries.

Why is “relationship coffee” about more than paying higher prices?

We often talk about relationship coffee in the specialty coffee sector, but what does it actually mean?

While industry professionals and consumers alike agree that producers need to receive higher prices for coffee, the concept of “relationship coffee” is much more holistic. 

Similar to direct trade, there is no formal definition of “relationship coffee”. However, the term generally refers to working relationships between roasters and producers which are developed over years. 

The idea behind these partnerships is to encourage long-term buying, rather than roasters making a smaller number of one-off purchases. At the same time, roasters often commit to a higher price for coffee, but as we’ve established – this isn’t the only thing which characterises a healthy direct trade relationship between farmer and buyer.

Ultimately, working relationships like these can mitigate the risks associated with the volatility of the C market, helping producers to earn a more sustainable income.

Part of the reason that producers struggle to retain as much value in origin is because the coffee industry was built on colonial structures which are hundreds of years old. To overcome these inequities, better empower coffee producers, and alleviate systemic poverty, we do need to pay more for coffee –  but we also need to talk about stability in a much wider context.

For instance, when a producer is assured that a roaster is committed to buying some of their coffee each year, they have more capacity to experiment with new farming practices or processing techniques, or invest in new machinery and equipment. 

While it will take a substantial amount of time for the benefits of these investments to pay themselves off, there is less risk involved when farmers have a stable, committed long-term trading partner.

Building trust

As a producer, Oscar says that building trust is key to making these working relationships successful and sustainable in the long term.

“Through shared trust, relationship coffee allows information about production, harvest, origin, processing methods, and more to reach the final consumer,” he says. “Paying farmers a higher price is not always the most important thing – it’s also about the relationships that supply chain actors build with each other.

“For instance, Mayorga Coffee’s direct trade model helps to empower coffee producers in Latin America because it improves sustainability in the long term,” he continues. “Producers know that by growing high-quality coffee, roasters like Mayorga will always be willing to buy their coffee because they trust us.”

Martin agrees, saying: “Like any relationship, it starts with human interaction and having genuine interest in the other person and the realities they face.

“These relationships can’t develop after visiting farms a few days a year,” he adds. “You need to learn the language or hire a local person to assist with talking to producers.”

In turn, producers and roasters are able to communicate more openly and effectively.

“Ask uncomfortable questions like ‘how much interest do you pay for financing?’,” Martin says. “If we don’t learn the realities of the problems which farmers deal with, we’ll never be able to fix them.

“This is critical: be humble, learn, listen, and then work together,” he adds. “It’s not the job of roasters to save producers – instead they are there to be part of a necessary shift in how we talk about and trade coffee.”

Green coffee beans in a jute bag.

Why should more roasters buy direct trade coffee?

When using more traditional trade models, it becomes more difficult to effectively trace the origin of a specific coffee, especially for end consumers. Roasters, meanwhile, may know roughly where the coffee comes from, but might not be able to explain who grew or harvested it.

However, with more and more consumers looking to learn about the people who grow their coffee, transparency and traceability are more important than ever. 

In turn, roasters and baristas have started to disseminate more information about coffee production. This includes:

  • Different varieties
  • Processing techniques
  • How terroir and altitude affect flavour profiles

Open communication between farmers and roasters can help to provide as much information as possible about coffee. Furthermore, as part of developing closer working relationships, roasters are able to discuss a number of factors with producers. 

For instance, a roaster can explain how well a particular coffee has sold or what kind of sensory profiles their customers are looking for. As a result, producers can diversify and focus on different farming practices or processing methods to cater to these preferences.

More open communication channels also work in a similar way for producers. They can tell roasters which farming practices or processing methods are the most profitable, as well as which ones aren’t suitable for them.

When implemented effectively, relationship coffee can have a number of benefits for farmers.

Mayorga Coffee has helped to rebuild homes, establish better financing models, create new opportunities for farmers through crop diversification systems, provide more formal education with the help of agronomists and, most importantly, be a long-term, consistent customer for them,” Martin explains.

Raising awareness of complex issues

However, he emphasises that it’s essential for roasters to not see themselves as “saviours” in these situations.

“Too much of the direct trade model is marketed as a means to support producers, while in reality, it’s a way for coffee companies to gain credibility,” Martin says. “Some companies present more simple ‘solutions’, like paying more for coffee or claiming that blockchain will solve producers’ problems.

“These ‘solutions’ are out of touch with the reality that many producers are facing,” he adds. “It’s not possible to create simple solutions to a very complex problem that has been active for over 200 years.”

Oscar tells me that relationship coffee and direct trade models can provide farmers with more security, too.

“There are many factors that sometimes complicate coffee production,” he says. “These include unpredictable weather conditions, price volatility, logistical problems, or political instability.

“Ultimately, trust between supply chain actors helps coffee production to be sustainable in the long term,” he adds.

A coffee farmer winnows coffee cherries to remove debris.

It’s clear to see that historic inequities continue to influence the realities of farmers across the coffee industry. At the same time, we also know that one solution which is often proposed is to simply pay more for each bag of coffee.

However, in order to address these issues in a comprehensive way, we must do more than pay a higher price for coffee. A holistic approach focused on healthy, stable, long-term trading relationships will support and empower smallholder coffee farmers to invest and improve in the long term.

Want to learn more about Mayorga Coffee? Read about Mayorga’s PRF El Salvador Diamond Sponsorship here.

Photo credits: Mayorga Coffee

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Does coffee taste different as you get older? https://perfectdailygrind.com/2023/02/does-age-affect-how-you-taste-coffee/ Mon, 20 Feb 2023 06:27:00 +0000 https://perfectdailygrind.com/?p=102415 There are many variables which influence how we perceive flavours in coffee, including brew temperature, water quality, and even altitude.  However, we also know that you need a well-developed palate to pick out more nuanced tasting notes. But in order to develop your palate, you need to drink a range of coffees – including different […]

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There are many variables which influence how we perceive flavours in coffee, including brew temperature, water quality, and even altitude

However, we also know that you need a well-developed palate to pick out more nuanced tasting notes. But in order to develop your palate, you need to drink a range of coffees – including different origins, varieties, and processing methods.

One of the most common situations where industry professionals taste and evaluate coffees is at cuppings. However, when it comes to tasting and scoring coffees, we often overlook the influence of age.

There is clear evidence that as we age, our senses of smell and taste begin to temporarily (or even permanently) change – which undoubtedly influences how we perceive coffee flavour.

So, this leads us to an important question: should we account for age differences when cupping and scoring coffee?

To find out, I spoke with Gary Au, co-founder of Urban Coffee Roasters in Hong Kong, and Nick Castellano, Product Marketing Specialist at Cropster. Read on for more of their insight.

You may also like our beginner’s guide to cupping coffee & improving your palate.

Gary Au conducts a coffee cupping session.

Do our palates change with age?

It’s an inevitable fact that as we age, our senses start to deteriorate – albeit at different rates depending on a number of factors. These can include existing health conditions and access to medical care, for example.

Most people tend to think of losing hearing and sight when discussing ageing, but research has shown that we also lose our senses of smell and taste, too.

For instance, a 2006 study found that our senses of smell and taste begin to decline around the age of 60. Moreover, by the age 70, there is a “severe” loss of both senses – meaning our ability to distinguish between flavours diminishes, including for coffee.

This is largely a result of a decline in the number of olfactory receptors in the nasal cavity, which we use to recognise aroma – which also plays a key role in perceiving flavour. As well as this, there is also a decline in the rate of the regeneration of receptor cells as we age, so our senses of smell and taste eventually become less sharp.

Conversely, childrens’ senses of smell and taste are highly sensitive – especially to sweet and salty flavours. A 2005 study from the Monell Chemical Senses Centre found that newborn babies could detect sweeter flavours, and would often prefer them over non-sweet flavours. 

Evidence shows, however, that somewhere between adolescence and adulthood, our palates begin to develop more. This is largely a result of trying different foods and cuisines, which exposes us to a wider variety of flavours and textures. In turn, we become more accustomed to the five taste elements: sweet, salty, sour, bitter, and umami.

Brewing coffee using a Hario V60.

What about unconventional flavour notes?

In simple terms, there are five main aspects of a coffee’s sensory profile: acidity, sweetness, bitterness, body, and aftertaste. But alongside these aspects, we also discuss specific tasting notes.

Many industry professionals use the Specialty Coffee Association’s Flavor Wheel to identify specific characteristics and flavours in coffee. There is certainly criticism of the Flavour Wheel – mostly because it is geared more towards European and North American palates than those in producing countries.

The wheel was first published in 1995, and has since been reworked to include a more diverse vocabulary of 110 flavour, texture, and aroma characteristics. For instance, the “fruity” category alone includes four subcategories, which all contain at least another two subcategories – including raisin, cherry, coconut, and lemon, to name a few.

For the most part, notes of chocolate, caramel, nuts, and fruit are fairly common to find on coffee packaging. However, in recent years, it’s been impossible to ignore the rising number of specialty roasters who use more unconventional flavour notes.

Why are flavour notes becoming more distinctive?

In many specialty coffee shops around the world, it’s not uncommon to see more niche and interesting flavour notes. For example, some of the 2021 World Barista Championship finalists used “cake batter”, “melted chocolate ice cream”, and “banana custard” to describe the flavours in their coffee.

While Gary thinks this is largely a result of using more unique coffee species and varieties, as well as more experimental processing techniques, Nick says he believes it’s also the influence of younger generations.

“Generally speaking, I think younger people are more inclined to try [these types of coffees] – such as the ‘new’ or ‘crazy’ fermented coffees which have unique and interesting flavours,” he says. “In my opinion, it also helps people who are new to specialty coffee to engage with it more.”

Gary agrees, saying: “In my experience, people who are new to specialty coffee tend to prefer the new and interesting flavours, and they are often able to taste the flavour notes described on the packaging.”

Should we factor in generational differences when cupping coffee?

Research indicates that as we age, we are less likely to perceive the full spectrum of flavours in coffee. Undoubtedly, this is especially important when it comes to cupping and scoring coffee.

Gary and Nick both attended the 2022 Best of Panama Auction last year, where it was clear that age made a significant difference in scoring coffees. It’s important to note that all of the judges at the auction were experienced cuppers and Q-graders. 

However, after the judges’ calibration session, it became apparent that there was some discrepancy between scores awarded to the coffees. Typically, a one or two-point difference between the judges’ scores for the same coffee is to be expected, but at the 2022 BoP auction, there was a five or six-point difference between certain coffees. 

Moreover, Gary and Nick told me that one coffee received 100 points from two judges, which is practically unheard of at the auction.

“In my opinion, it was because the cuppers who were older favoured the more ‘traditional’ Gesha flavour profiles, which are more floral and delicate,” Nick says. “However, the cuppers who were younger seemed to be scoring more points to the more complex coffees.”

Gary, meanwhile, believes that level of cupping experience and cultural background also affected these score discrepancies.

The award given to the winner of the Panama Cup in 2022.

So, what does this mean for cupping protocol?

Although age may have played some role in influencing cupping scores at the 2022 BoP auction, both Nick and Gary agree that the level of cupping experience was by far the most important factor.

Moreover, in Gary’s experience as a judge, he finds that people from Southeast Asia or the Middle East often prefer more fermented and winey flavour notes in coffee. He adds that North Americans and Europeans tend to favour more traditional flavour profiles because of cultural differences in cuisine.

Nick believes that it is also important to understand how differences in international or regional markets influence flavour preferences

“For example, in Chile, Santiago’s specialty coffee market is more developed than Buenos Aires’ in Argentina, so the market for more unique coffees is bigger there,” he says.

Addressing these issues

The SCA describes this cupping bias as “intersubjectivity”. This is when professional cuppers assess coffee quality based on which characteristics are desirable to a specific market, rather than objectively scoring a coffee.

As a result of this, the SCA started to develop its Coffee Value Assessment System, which essentially seeks to eliminate any kind of intentional or unintentional bias when cupping, as well as aiming to be more inclusive of different cultures and cuisines.

Several coffee professionals perform quality control at a coffee cupping.

While age certainly plays a role in how we perceive coffee flavour, it’s clear that we should also consider how other factors influence this too – including experience and cultural differences.

Whether intentional or not, bias is an inescapable part of assessing coffee quality and flavour. However, as we continue to see more and more experimental processing techniques and new varieties and species, it’s clear that the spectrum of coffee flavour will also continue to widen. 

Enjoyed this? Then read our article on how to ensure consistency when cupping coffee.

Photo credits: Gary Au, Urban Coffee Roasters

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How does foreign exchange affect the price of coffee? https://perfectdailygrind.com/2023/02/how-does-forex-affect-the-price-of-coffee/ Wed, 01 Feb 2023 06:32:00 +0000 https://perfectdailygrind.com/?p=102012 For the most part, both the price of arabica and robusta rely on futures contracts. These are legal agreements to buy or sell a particular commodity at a predetermined price on a set date. However, while the C price and robusta futures are determined by real time transactions of coffee, the price of coffee is […]

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For the most part, both the price of arabica and robusta rely on futures contracts. These are legal agreements to buy or sell a particular commodity at a predetermined price on a set date.

However, while the C price and robusta futures are determined by real time transactions of coffee, the price of coffee is also affected by fluctuations in foreign exchange rates. This is because while coffee is sold in US dollars on the C market, coffee is also purchased in other currencies along the supply chain – largely depending on the origin country it was sold in.

Changes in the foreign exchange market (also known as forex, FX, or currencies market) can affect many people across the coffee supply chain. Fluctuations in the market can influence prices paid by roasters and consumers and prices paid to farmers, as well as their production costs. Ultimately, movements in the FX market can have a big impact on economic and social sustainability in the coffee industry.

To better understand how fluctuations in the FX market influence the price of coffee, I spoke to an FX trader, a producer in Brazil, and a UK roaster. Read on for more of their insight.

You may also like our article on how technology can support the future of coffee production.

A coffee farm worker holds ripe red coffee cherries in their hands.

What is the foreign exchange market? 

The foreign exchange market is a global decentralised market which is used to trade currencies and determine foreign exchange rates for every currency in the world. It is the largest trading market in the world, with daily turnover reaching US $7.5 trillion in April 2022 for over-the-counter (OTC) transactions.

As with many other global financial and trade markets, FX is impacted by a number of macroeconomic factors. These can include inflation, decisions made by central banks, fluctuating interest rates, and changes to political parties – especially elections.

Kelly Oviedo is a Foreign Exchange Trader and Controller at Sucafina. She tells me that the 2022 Colombian presidential elections affected the foreign exchange market – especially because winner Gustavo Petro ran a campaign which pushed for more reliance on renewable energy.

“Colombia is a big exporter of oil, so when Petro was voted in, the global market anticipated that his party would pass policies to reduce oil exports,” she says. “In turn, the Colombian peso weakened on the global financial market.”

Another factor that can influence foreign exchange rates is the price of money, Kelly adds.

“The price of a particular currency is related to the interest rate from that country’s central bank,” she says. “If one country reduces or increases its interest rates relative to another country’s then it will add more pressure onto its own currency conversion.”

As coffee is bought and sold using different currencies across the supply chain, it’s vital that stakeholders understand the value of one currency against another. 

Local currency and the US dollar

A producer is likely to be paid in their local currency, such as the Colombian peso or Ethiopian birr, for example. Traders are likely to sell coffee to exporters in US dollars, while roasters will purchase coffee using their local currency – which can range from the euro to Japanese yen to the British pound. 

Ultimately, understanding the value of each type of currency in respect to one another is an essential part of the trade of coffee.

Similar to how traders hedge coffee prices in the C market, traders can also hedge currency by buying forward contracts using specific currencies. These strategies allow importers, larger producers, and roasters to hedge against exchange rates which significantly change between two currencies. 

When hedging, companies sell a coffee futures contract when they purchase a “physical” coffee contract at the C price. This typically means that if the C price falls, these companies can buy their futures contract and use the profits to offset the price of their “physical” coffee.

Conversely, if the C price rises, these companies end up taking a loss on their futures contract, but can ultimately sell their coffee at a higher price.

A worker carries a 60kg bag of coffee through a warehouse.

How does FX influence coffee prices at origin?

The foreign exchange market affects every stage of the coffee supply chain. However, it affects producers specifically in two main ways: through production costs and changes in domestic coffee prices.

For instance, as chemical fertilisers are manufactured using oil – which is globally traded in US dollars – the price of fertiliser is ultimately linked to the value of the US dollar in some capacity. Fertiliser is an essential agricultural input for many farmers, and often represents one of the largest costs of production when used.

Producers then have to buy fertiliser using their local currency, so the final price can be influenced by the exchange rate between the US dollar and their local currency. 

Let’s use Colombia as an example. When the Colombian peso is weaker against the US dollar, a producer ends up spending more money on the right amount of fertiliser. Alternatively, if the Colombian peso is stronger than the US dollar, the producer needs to pay less money for the same amount.

Another way that the foreign exchange market affects producers costs is by influencing local coffee prices.

“This is more of a direct impact than on the costs of inputs,” Kelly says. “In simple terms, the power of the US dollar compared to a producer’s local currency can affect the buying power of exporters, which can make it easier or harder to compete with local buyers.” 

Arguably, this can have serious consequences for local buyers who generally have less buying power than larger and more established exporters. However, it can benefit local farmers in some cases – a weaker local currency could mean that exporters can afford to pay more money (in local currency) for cherry or parchment, so producers end up receiving higher prices.

Value of local currency against the US dollar

Since exporters usually sell coffee in US dollars, its buying power compared to a local currency can impact how competitive local prices are for cherry or parchment. 

For example, if the Colombian peso is stronger than the US dollar, exporters are more likely to offer prices which are similar to local buyers’ prices. However, if the Colombian peso is weak against the US dollar, exporters can buy more pesos with their dollars, and can then offer more competitive prices than local buyers.

The graph below demonstrates C price variations in the US dollar, Brazilian real, and Colombian peso:

A graph (sourced from the Intercontinental Coffee Exchange) demonstrating fluctuations in the price of coffee in US dollar, Brazilian real, and Colombian peso.
Source: ICE Connect Tool

From January 2021 to December 2022, the distance between the green (US dollar) and red (Colombian peso) lines shows how the Colombian peso has steadily weakened against the US dollar. As a result, Colombian farmers have been less affected by lower market prices in 2022. This is because even though their currency weakened, Colombian farmers were receiving a higher local price than Brazilian farmers (whose currency maintained its value relative to the US dollar).

As the Brazilian real and Colombian peso are weaker against the US dollar than other currencies in Latin America, exporters can typically purchase more Brazilian and Colombian coffees for the same amount in US dollars. 

Ricardo dos Santos Bartholo is the owner of Fazenda Cinco Estrelas in Patrocínio, Minas Gerais.

“When the US dollar strengthens, the Brazilian real weakens,” he says. “However, this increases the value of the real for coffee producers, so we are able to be more competitive in the international coffee market.”

Coffee professionals sample various coffees in a cupping session.

How are consuming countries affected?

While cherry and parchment are purchased in local currencies, green coffee is mostly purchased in US dollars. This means that the value of the dollar influences the prices that roasters outside the US pay for their green coffee.

Although US roasters are affected by exchange rates for the US dollar against local currencies where coffee is produced, the price they pay for green coffee isn’t impacted by the value of the US dollar.

However, prices for roasters outside the US are influenced by exchange rates and the FX market. These roasters buy coffees that were initially purchased in US dollars, but they also need to pay in their own local currency – so the price is determined by that currency’s value against the dollar.

Using the example of Canadian dollars, if the exchange rate is 1 US dollar to 1.5 Canadian dollars, a Canadian roaster will need to pay more for their coffee. If coffee is $10 US/kg, a Canadian buyer would be paying $15 CA/kg for the same coffee. 

Conversely, if the US dollar weakens to the point that 1 US dollar equals 1 Canadian dollar, a Canadian roaster will only pay $10 CA/kg, assuming the price of the coffee stays the same in US dollars.

Foreign exchange conversions also influence demand for coffee. Recently, we have seen demand for coffee increase in the US – especially while the US dollar is strong compared to other currencies.

In turn, this means that US roasters pay less for their coffee, which ultimately helps to increase demand.

A professional coffee roaster releases roasted coffee beans from a machine.

Balancing risks as a roaster

Although it might seem like roasters have no choice but to simply absorb costs related to currency fluctuation, there are ways that they can mitigate this risk.

Andrew Duncan is the COO of Workshop Coffee in London, UK.

“All of the producing countries we buy from trade and sell coffee in US dollars,” he says. “This means that we need to convert this into our local currency.

“As a result, there are additional fluctuations we need to account for on top of fluctuations in the C price,” he adds.

He explains that Workshop Coffee typically estimates its annual volume of green coffee it needs to purchase, and then buys forward contracts on the FX market at a percentage of its total projected expenditure for that year.

In practice, this means that UK roasters can lock in the current exchange rate between the British pound and US dollar for a certain percentage of their total costs. This means that if the US dollar strengthens against the pound, the roaster won’t spend any more money.

The risks of hedging

However, it’s important to note that hedging isn’t always effective so roasters need to think hard about adopting it as a strategy and exercise caution when doing so.

For example, if the C price increases significantly then the US dollar they did buy would no longer cover the amount of coffee they had planned to buy. Alternatively, if the US dollar weakens, roasters will lose out on potential savings.

“It’s mostly about trying to mitigate as much risk as possible,” Andrew says. “Hedging can be an educated guess, as well as knowing how to de-risk price volatility by buying forward contracts so that we know what our costs will be.”  

In recent years, higher volatility in the FX market have meant that the margins for risk and reward are much higher. For example, Andrew explains that while he previously planned to purchase US dollars to cover around half of his expenditure for a six-month period, he now does so over a much shorter period.

To mitigate risk, Andrew suggests using a currency broker instead of a local bank to exchange currency. 

“If you go to a bank and ask to make a payment to the importer in US dollars, the exchange rate will be worse,” he says. 

Instead, a broker converts your payment into US dollars and then makes the payment to the importer on your behalf. 

“This way, you tend to get a better exchange rate,” he adds. However, roasters still need to be careful when doing so, and make sure to compare exchange rates between banks and brokers before making any decisions.

A coffee trader holds up a scoop of green coffee beans.

While foreign exchange may not be as widely discussed in the industry as the C market, it certainly has an impact on the price of coffee across the supply chain – affecting producers, traders, roasters, and consumers alike.

For some producers and many roasters, understanding how the foreign exchange market works and its influence on the price of coffee might inform how they buy and sell their coffee. Ultimately, improving awareness can help both roasters and producers to learn about how FX impacts them – and what they can do to mitigate risk and maximise profits.

Enjoyed this? Then read our article on four ways for small and medium-sized coffee roasters to manage price risk.

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Please note: Sucafina is a sponsor of Perfect Daily Grind.

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How do increases in the price of coffee affect co-operatives? https://perfectdailygrind.com/2022/11/how-do-increases-in-coffee-price-affect-co-operatives/ Mon, 14 Nov 2022 06:27:00 +0000 https://perfectdailygrind.com/?p=100241 From early 2021 through until mid-2022, coffee prices increased steadily – with arabica futures reaching a ten-year high of US 258.95 cents/lb in February 2022.  These price increases are attributed to a number of reasons, including weather (such as a sudden frost which hit some of Brazil’s top coffee-growing regions in July 2021), the rising […]

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From early 2021 through until mid-2022, coffee prices increased steadily – with arabica futures reaching a ten-year high of US 258.95 cents/lb in February 2022

These price increases are attributed to a number of reasons, including weather (such as a sudden frost which hit some of Brazil’s top coffee-growing regions in July 2021), the rising price of shipping containers, and the International Coffee Organisation halving its global 2020/21 coffee surplus to a 22-year low in early 2022.

However, in recent weeks, the global market price of coffee (also known as the C price) has fallen to an 18-month low of US 174.20 cents/lb. Considering these significant price fluctuations, it raises an important question: do producers earn more money when the C price increases? And for those who are members of coffee co-operatives – can higher prices help them to gain more access to resources and different markets?

To find out, I spoke with three coffee professionals. Read on to learn what they had to say about how rising coffee prices are affecting co-operatives.

You may also like our article on why frost in Brazil caused global coffee prices to increase.

Red and green coffee cherries on branch.

How do coffee co-operatives work?

Before we understand how price rises affect co-operatives, we need to revisit how coffee co-ops function.

Essentially, a coffee co-operative is a group of producers who join together to collectively improve their access to a number of resources – including fertilisers, farming tools, seeds, and credit loans. As well as this, farmers can also have more access to formal training programmes and can leverage better marketing and business opportunities – ultimately increasing their potential to receive higher prices for their coffee.

One of the industry experts I spoke to (who wishes to remain anonymous) says that co-ops provide producers with a number of benefits, including “[supporting them] to buy and sell coffee”. 

In essence, co-operatives function similarly to non-profit organisations. To join a co-operative, producers need to pay a fee, which is then reinvested back into the community – based on the premise that the combined funds will have more impact than an individual producer’s.

By becoming a co-op member, a producer is likely to have better access to a number of services and resources. 

Some co-operatives even buy their members’ coffee and sell it for them. This can be especially beneficial for producers, as it can provide them with better access to a number of different markets which they may not have been able to enter themselves.

Another coffee professional I spoke with, who also wishes to remain anonymous, explains that co-ops can provide producers with more stability against inflation and market volatility. For example, farmers can purchase fertilisers at discounted rates, which can guarantee them better access to much needed resources and allow them to reinvest in their farms.

A person picks ripe coffee cherries from a tree.

How are co-operatives affected by fluctuations in the price of coffee?

Although there are a number of benefits to joining a co-operative, the co-op model is not without its issues.

In Kenya, for instance, as many as 50% of the country’s coffee farmers have worked with big estates or co-ops at any given time. However, over the past several decades, the number of co-operative members has been steadily declining. This has largely been attributed to low coffee prices and producers’ claims of a lack of autonomy and reasonable decision making.

Furthermore, recent market volatility is raising an important question around just how profitable co-ops are.

“Coffee farming is a risky business for a number of reasons,” says one industry expert. “In a highly volatile market, the aim is to reduce risk as much as possible, and co-operatives can help farmers to do this.”

They add that by becoming a member of a co-op, producers are more likely to be able to predict the costs of their inputs, enabling them to better understand their potential profits and losses.

The industry expert uses forward buying as an example. In theory, this model allows co-op members to sell their coffee at today’s price, but they are required to deliver the coffee at a future date. 

For the producer, this can help to mitigate the risks of future market volatility by ensuring they receive a high enough price for their coffee. However, if the price of coffee then increases a few months later, the farmer will essentially lose money in real terms.

However, through 2021 and 2022, we saw that some producers who had agreed to sell coffee at lower prices abandoned their agreements to try and get a higher price at the current market rate. This is known as strategic defaulting.

Although there are some benefits, strategic defaulting can have a number of negative consequences. For instance, producers could well be blacklisted by co-ops, traders, or roasters. 

“In Brazil, where farms are generally larger than other countries, some producers sell up to 80% of their harvest and keep the remaining 20% to hedge against market fluctuations,” one industry expert explains. “Meanwhile, in Colombia, which has a greater number of smaller coffee farmers, producers will sell all of their coffee.”

Ultimately, this means co-op members in Colombia are less protected against market fluctuations – leaving them at more risk. This is especially concerning considering that the Colombian Coffee Growers Federation (FNC) purchases around one-third of the country’s coffee, meaning a large proportion of Colombian co-op members could receive lower prices.

Kyle Bellinger is the CEO and founder of Osito Coffee, which operates in Colombia, the UK, and the US. He explains that because coffee market price regulation works differently in African countries, market volatility is slightly different.

“In Ethiopia and Burundi, for example, the price of coffee is set by the government on a monthly or weekly basis, so it doesn’t change daily like in Colombia and Brazil,” he says.

He adds that because most farmers in countries like Burundi, Kenya, and Ethiopia don’t carry out post-harvest processing themselves, they are also less vulnerable to market fluctuations. However, as a result of carrying out minimal post-harvest processing, they can often receive lower prices for their coffee.

Is there a risk of bankruptcy?

Given the recent increase in contract defaults, one question becomes pertinent: are co-operatives at risk of running out of money?

One industry expert tells me that Colombia in particular experienced this in mid-2022. Out of 38 co-ops in Colombia, four are under liquidation, while several are under the observation of the Superintendencia Solidaria in Colombia. This is the regulating body for co-ops, banks, and financial institutions in the country.

In Colombia, co-ops must report their profits and losses to the Superintendencia Solidaria and if their monthly statements turn negative, the regulatory body will initiate an investigation. Once a co-op is investigated, they are typically under the control of the regulator.

One industry expert tells me this often involves appointing someone who has limited coffee expertise to run the co-op. They add that because of this, it can sometimes result in the dissolution of the co-operative, as the appointed official may not be knowledgeable enough to support the operations of the co-op.

A group of Asian women harvest coffee cherries.

What can be done to support co-operatives?

The dissolution of co-operatives in any coffee-growing country would undoubtedly have detrimental effects on producers, especially for their members. It can prove to be a massive barrier for market access.

One industry expert says price insurance can help protect farmers from market volatility, but this requires paying an upfront fee.

“Farmers don’t want to pay the fee, [and some potentially couldn’t afford to],” they explain. “Co-operatives can’t force producers to pay the insurance fee, otherwise they might lose members.”

Ultimately, producers who are members of co-operatives will only receive payments for their coffee once they have delivered on contracts. This means they may either receive lower prices or will have to wait longer to be paid, leaving them economically vulnerable.

Alternative financing models, such as bartering, can allow farmers to receive the goods and services they need without exchanging money. Farmers will then typically provide the coffee at an agreed upon date – enabling them to use their coffee as a bargaining tool to gain access to the resources they need to invest in their farms.

For Latin American co-operatives in particular, Kyle tells me that establishing more centralised processing stations could allow the farmers to focus more on growing and harvesting coffee, and leave post-harvest processing to other supply chain stakeholders. In theory, this could improve coffee quality and help to increase prices.

“It’s also about farmer-roaster relationships,” Kyle adds. “This often means paying a premium well above the C price when you do buy coffee.”

A coffee farmer holds coffee cherries.

Despite the recent fall in coffee prices, it still remains unclear how coffee co-operatives and their members will be affected by price fluctuations in the long term. 

But one thing is for sure – in order to create a truly sustainable coffee industry, price transparency and stability is key. Without stability over an extended period of time, higher prices and market fluctuations can be disruptive – and potentially have a number of unforeseen consequences.

Enjoyed this? Then read our article on why people are calling for reform in Kenyan coffee production.

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Are blends becoming more popular in specialty coffee? https://perfectdailygrind.com/2022/11/are-blends-becoming-more-popular-in-specialty-coffee/ Tue, 08 Nov 2022 06:34:00 +0000 https://perfectdailygrind.com/?p=100184 Across the world of specialty coffee, there is undeniably a growing focus on sourcing high-quality, sustainable, and traceable coffees. A large part of this revolves around offering single origin coffees; these coffees are grown in one particular location, which can range from one country to one specific plot on a farm. For many years now, […]

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Across the world of specialty coffee, there is undeniably a growing focus on sourcing high-quality, sustainable, and traceable coffees. A large part of this revolves around offering single origin coffees; these coffees are grown in one particular location, which can range from one country to one specific plot on a farm.

For many years now, single origins have been popular in specialty coffee shops around the world, as well as in the World Coffee Championships (WCC) – favoured by many coffee professionals for their complex and delicate flavour profiles.

However, over the past year, we have seen more and more roasters selling high-scoring coffee blends, and more WCC competitors using blends in their performances

So why are high-quality blends becoming more popular, and how might this impact the coffee industry? I spoke to two coffee professionals to find out more.

You may also like our article on how specialty coffee blends have evolved for today’s market.

Roaster pours green coffee into metal container

Many coffee professionals and consumers alike enjoy single origin coffees, largely because they allow the inherent qualities of the coffee to shine through. In many cases, single origin coffees showcase the characteristics of where they were grown and the hard work of the producers who grow them.

However, in recent months, as shipping costs have increased along with a range of other operational costs, roasters’ profit margins have tightened. As such, some have turned to selling higher-quality blends as a way of controlling costs.

Blends have long since been a staple on coffee shop menus around the world, offering more traditional coffee drinkers a repeatable and consistent flavour profile. Ultimately, this can help a brand to build a more loyal customer base.

Moreover, in theory, blends also give coffee roasters more flexibility. By mixing together higher-quality, more expensive coffees with cheaper coffees which add more body or robust flavours, roasters can still appeal to consumers while keeping costs down.

Although blends have historically been associated with lower-quality coffees, this is now changing.

Daniel Velasquez is the owner of green coffee trader Campesino Coffee in Colombia. 

“As demand for specialty coffee has increased in recent years, requests for high-quality blends have also increased,” he says. “Similarly to decaf coffee, blends don’t have to be low-quality, high-volume coffees, and I think coffee professionals and customers alike are finally acknowledging this.

“Our Madre Laura Community Blend includes coffee from more than 120 smallholder producers in Jericó, Colombia,” he adds. “Although the blend is one of our higher-volume coffees, we don’t sacrifice on quality or traceability.”

While there are a number of factors to consider when creating a specialty blend, such as the seasonality and solubility of different coffees, they allow roasters to develop a completely different sensory experience to single origins.  

Philip von der Goltz is the Managing Partner of green coffee importer List + Beisler.

“Specialty blends can help roasters develop a specific flavour profile, while optimising costs, as well as the freshness and quality of the product,” he tells me. “Blends can provide flexibility to a roaster and decrease its dependency on a certain origin or quality.

“Other roasters use blends to create a more unique and better-tasting coffee than is possible with a single origin,” he adds.

Alongside the recent increase in specialty blends in coffee shops, we have also seen more and more WCC competitors using blends as part of their routines – mainly to balance out the flavours of emerging new varieties and species.

For instance, 2021 World Brewers Cup winner Matt Winton used a blend of eugenioides (a rare coffee species) and Catucaí in his routine. 

That same year, 2021 World Barista Championship (WBC) competitor Andrea Allen placed second, when she used a blend of eugenioides and Gesha in the espresso category. Hugh Kelly, who placed third in the 2021 WBC also used a blend of eugenioides and liberica in his performance.

Coffee farm workers remove husk from green coffee beans

What makes these blends specialty?

If a coffee is to be certified as “specialty”, it must have no primary defects (such as black beans), as well as no more than five secondary defects (including broken beans), in a 300g sample. The coffee must also score 80 points or more on the Specialty Coffee Association’s 100-point scale. 

“If every coffee included in a blend scores more than 80 points, it can be classified as a specialty coffee blend,” Philip says.

However, there are a number of other, less formal considerations for roasters when they create specialty coffee blends.

Firstly, high-quality blends are not just limited to coffees from different origins. Roasters can include various different varieties, processing methods, or even use different micro lots from the same farm. 

 “Our Community Blend, for example, is made up of small lots that would otherwise be sold as premium micro lots,” Daniel tells me.

This process allows roasters to bring together different single origin coffees to create a more balanced cup, while still maintaining quality and complex flavour profiles. 

Moreover, specialty blends also ensure that the coffee can still be traced back to the farm and producer who grew it. More and more roasters are including information about the different components of their specialty blends – helping to maintain traceability and transparency.

Ultimately, blends are becoming more and more important in the specialty coffee sector.

A roaster holding green coffee beans

Is there a move away from single origin coffees?

In view of the recent growth of specialty coffee blends, there is one major question to answer in response: are single origin coffees becoming less popular?

Philip tells me that he has noticed some recent prominent trends in the specialty coffee industry which are contributing to the growth of premium coffee blends.

Firstly, he says that as roasters and green coffee traders scale, they understand more about the benefits of blends. Not only can some blends offer customers more consistency, others can create new flavour experiences for different customers.

Secondly, Philip tells me that increases in the C price (which has since declined in recent weeks) have influenced green coffee traders and roasters to start developing more blends as a way of offering a product which is still noticeably high quality while controlling costs.

“Furthermore, logistical issues and shipping delays have forced roasters to become more creative to ensure quality doesn’t slip and flavour profiles are consistent,” he adds.

Daniel, meanwhile, doesn’t believe that there is a shift away from single origins.

“[The biggest change in the coffee industry] is that roasters are finding new ways to develop and market their blends,” he says.

For example, rather than selling premium micro or nano lots as more exclusive or limited edition coffees, this trend shows that there is the scope to blend them with other coffees. 

This could also be beneficial for producers, as coffee quality can fluctuate as a result of several factors – including unpredictable weather and an increase in pests and diseases. 

“Specialty blends can be versatile,” Daniel says. “They can be used for espresso or filter, and still have the same level of quality as single origins.”

A coffee farm worker harvests coffee cherries

Looking to the future

Considering how specialty coffee blends have recently surged in popularity, it seems like there is more growth to come – at least until the price of coffee stabilises or shipping costs fall.

Daniel tells me that the success of premium blends is ultimately down to roasters and green coffee traders, rather than producers. 

“It’s impossible for smallholder farmers to grow higher volumes of coffee for blends, especially when the majority of producers in Colombia grow coffee on two or three hectares,” he says. “The responsibility to create and market specialty blends which are traceable and consistent falls on exporters, associations, co-ops, and roasters.”

Philip says that roasters will need to adapt to any upcoming trends in the coffee market, as well as C price fluctuations, which could ultimately affect the makeup of their blends.

However, he adds that demand for both specialty blends and single origins is likely to keep increasing.

“The two aren’t contradictory, but more complementary,” he concludes. “Consumers don’t always have to decide between the two.”

A pile of green parchment coffee

While it’s clear that specialty coffee blends are becoming more popular, it’s safe to say that single origins certainly also have their place in the specialty coffee industry.

However, while they have dominated the sector for many years, a recent economic downturn and other supply chain issues have made it clear that they can indeed exist in harmony.

But whether or not specialty blends will become more of a focus in the coming years remains to be seen.

Enjoyed this? Then read our article on whether coffee roasters should add robusta to blends if arabica prices increase.

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Coffee job roles: What is a green coffee buyer? https://perfectdailygrind.com/2022/02/coffee-job-roles-what-is-a-green-coffee-buyer/ Wed, 23 Feb 2022 06:12:00 +0000 https://perfectdailygrind.com/?p=94889 There are a number of roles in the industry that involve sourcing green coffee beans for a company. At a roaster, for example, the head of coffee and head roaster are both usually involved in the sourcing process. However, in many organisations across the industry, there are dedicated green coffee buyers who spend their time […]

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There are a number of roles in the industry that involve sourcing green coffee beans for a company. At a roaster, for example, the head of coffee and head roaster are both usually involved in the sourcing process.

However, in many organisations across the industry, there are dedicated green coffee buyers who spend their time sourcing beans that will eventually be roasted, ground, and brewed.

To learn more, I spoke with two experienced professionals about their day-to-day jobs as green coffee buyers entails. They told me more about the skills and experience that help them excel in this role. Read on to learn more.

You may also like our article on scaling up your green coffee sourcing.

Coffee being processed for a green coffee buyer.

What exactly is a green coffee buyer?

To explain it as simply as possible, a green coffee buyer’s role involves sourcing and buying green coffee, often looking for specific attributes or sensory characteristics to meet demand. This might mean sourcing a specific volume of coffee from a certain origin or at a certain cup score, for instance.

To do this, green buyers will generally sample and cup the coffee, before deciding whether or not it meets their or customers’ requirements.

Ultimately, the first task for many green coffee buyers is understanding which kind of coffee they need to buy. For green buyers working at a large roastery, this might mean looking at which flavour profiles have sold well in the past, and trying to match those accordingly. 

At an importer, meanwhile, the focus is often about making sure you connect the right producer with the right roaster. Transparency and traceability are also becoming increasingly important for many specialty coffee traders, so there’s a growing need to provide clarity and information as possible to both the roaster and the producer.

This might be to do with how the coffee is grown, the farmer’s situation, or details on how and when payment might be organised.

A cupping session for a green coffee buyer.

The day-to-day role of a green coffee buyer

First and foremost, a green coffee buyer’s day-to-day work will require a deep understanding of coffee quality and pricing.

Understanding how flavour profiles and cup scores influence the price of a coffee is key to making sure the roaster pays what they should and the farmer receives a fair price. 

Eros Ceresa is a green coffee buyer for Falcon Coffees in the UK. He gives me a brief overview of how his working week looks.

“Generally, there are two to three tables [of coffee samples] to cup every day, which we usually try to keep to a maximum of 12 cups per table,” he explains. “In this role, there is a lot of evaluation, but it’s not the same every week. “

Having previously held the role of head roaster, Eros says that sensory evaluation and analysis was already a key part of his career. 

However, what he does note is that as a green coffee buyer, there’s much more of a need to understand the logistical side of the industry. 

As he sources coffee from origin countries all around the world, Eros goes on to tell me that being well-organised and planning ahead is essential, as arranging the transportation of coffee requires a lot of administrative legwork and involves plenty of different parties.

“There’s a lot of decision making involved in terms of purchasing and a lot of planning, especially this year where we see a lot of issues with logistics all across the world,” he says.

He adds that green coffee buyers need to anticipate any potential issues, and that can be a lot of guesswork involved.

“The guys that I work with put a lot of effort in all the time so that everything works,” he continues. “It can be pretty hectic at times, but it is enjoyable.”

Michaela Tomchek works as the North American marketing and traceability manager for Mercanta Coffee Hunters. She explains that Mercanta has a slightly different buying process to other companies, in the sense that it uses a team to decide which coffees to bring in, rather than one individual.

Using this structure means more shared responsibility. Michaela explains how her role involves varying areas of focus.

She says: “At Mercanta, we make a lot of decisions together. We cup together and talk about what’s ideal to buy, although each office has a different strategy.

“In the US, where I am primarily based, we cup coffees, talk about them, then think about the prices we can sell coffee for, who would be interested, or whether we’d be able to sell it in a particular market.”

She adds that often, their sourcing depends on existing clients, many of whom tend to buy the same lots each year. 

“We seek high-quality coffees that are unique and different, and to connect with producers to make relationships,” Michaela adds. “This ensures that they have a sustainable income, which in turn means they can continue producing coffee.”

Processing coffee cherries.

What does traceability mean for green coffee buyers?

Traceability is an area that has grown in importance with the emergence of specialty coffee. Today, having all of the data about each individual lot of coffee and how it has made its way from farm to consumer is considered essential.

Michaela explains how her focus on traceability fits into the buying process for Mercanta.

“For US or Canada, we make sure all of our traceability documents are up to date,” she explains. “If we don’t have traceability on a certain farm, then we reach out to our partners at origin and gather that information.”

Her team takes things one step further, sourcing photos from producers to cross-reference with the information they have on hand.

“After that, we file it and we make it available to our clients,” she says. “So, day-to-day ‘traceability efforts’ could be calling or emailing, reaching out, and then putting together reports.

“We then make these reports available for our clients, who in turn make it available to people who are drinking the coffee.”

The rise of relationship coffee

As many coffee producers rely on crop sales as their main or sole source of income, forging long-lasting relationships can be crucial to ensuring that their coffee is sold at a fair price year after year. 

Michaela tells me that she thinks this is a vital part of the green coffee buyer’s job. 

“It’s extremely valuable,” she notes. “I enjoy this job because you get to talk with producers, exporters, and co-operatives, and really learn where the coffee comes from.”

She explains that these relationships facilitate a two-way exchange of information. Consumers learn where their coffee comes from, and producers get some insight into where their coffee ends up.

“We like to see the joy that it brings people, so I think that relationships are really important, not only for us buying coffee, but for the producer as well, so it goes both ways,” she says.

While new sales are arguably a key part of the coffee industry’s wider growth, established relationships are important, as they generate trust and provide certainty to both parties.

Eros says: “Most of the time, the idea is that we’re not going to start working together if both sides aren’t committed to a long-term business relationship. That’s something that has always been paramount for me.”

A coffee roaster at work.

What experience do you need to excel in this role?

Relevant skills, experience, and qualifications always help when moving into a new position. It’s no different for those aspiring to be a green coffee buyer.

For example, Michaela says that she has a long track record in the coffee industry, having started in an entry-level consumer-facing role. However, she says this gave her good insight into the wider industry, as well as experience which she has been able to build on over time.

“Like many people in the coffee industry, I essentially started as a barista, which introduces you to the consumer side,” she says. “Then I worked for a roastery as a quality analyst and then for another importer as a sensory analyst.”

She says that these roles gave her good sensory skills, as well as teaching her the importance of consistency.

“Those roles help me to know what specialty means and what it is people are looking for,” she adds. 

Eros also had a similar journey, working in entry-level consumer-facing roles before transitioning to roasting. He says that for him, the experience of working as a roaster gave him a distinct focus on quality control.

“Most of the time, you’re cupping coffees, one after another. Often these are the same coffees, because you’re carrying out production quality control,” he explains. “That helped me learn how to identify subtle differences in flavour across the same coffees.”

Another skill he picked up was the ability to make decisions on the fly, especially when he needed to approve or reject coffees on a tight deadline.

He says his previous roles also helped him develop a network – which has been key.

“By having this network, you’re almost always aware of current market trends,” he says. “This is especially the case if you’re connected to other head roasters.”

In addition, Eros found that completing his Q grader qualification helped him to stand out when applying for the position he now holds.

“I think being a Q grader adds something, and gives you confidence about cupping coffee,” he concludes. “If I can give one piece of advice to anybody that wants to buy coffee: become a Q grader!”

Coffee ready for a green coffee buyer.

Sourcing green coffee may be a part of other roles in the coffee industry, but making sure that you focus on quality and meet customer needs while doing so should be a priority.

As a part of this, many green buyers focus on developing relationships with their partners at origin. This is something which guarantees certainty for both producer and buyer, as well as improving outcomes and stability for the farmer in question.

Want to take the next step in your coffee career? Check out PDG Jobs, our jobs board dedicated to the coffee sector, here. 

Photo credits: Falcon Coffees, Mercanta Coffee Hunters

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How can roasters control quality when sourcing coffee? https://perfectdailygrind.com/2022/02/how-can-roasters-control-quality-when-sourcing-coffee/ Mon, 14 Feb 2022 06:33:00 +0000 https://perfectdailygrind.com/?p=94727 Quality is rightly a growing priority for coffee drinkers around the world, and consequently for coffee roasters. It’s a key differentiator in the coffee sector, setting specialty coffee aside from commercial coffee, and consumers are becoming increasingly discerning as a result. While the solution for most roasters is just to buy high-quality coffee and bring […]

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Quality is rightly a growing priority for coffee drinkers around the world, and consequently for coffee roasters. It’s a key differentiator in the coffee sector, setting specialty coffee aside from commercial coffee, and consumers are becoming increasingly discerning as a result.

While the solution for most roasters is just to buy high-quality coffee and bring out its best characteristics during the roast, this is easier said than done. Sourcing is by no means an easy process.

To learn more about how roasters can manage and control quality during sourcing, I spoke to two green coffee quality experts from The Coffee Source, and a coffee quality manager from Keurig Dr Pepper. Read on to find out what they told me.

You might also like our article on social initiatives in coffee-producing communities.

Performing coffee quality control.

Why is quality control important when sourcing?

Fernando Cabada is a former trader at The Coffee Source with experience in coffee quality management.

“Quality is the main driver for coffee traders,” he explains. “The price and availability of the coffee they source is entirely dependent on it, and it influences everything.”

Fernando explains that managing quality means finding coffee that meets the expectations of roasters. In short, quality control is the only way for roasters to know that they are getting what they paid for. 

Juan Lizano is a senior trader at The Coffee Source, and the president of the Specialty Coffee Association of Costa Rica. He has worked with coffee for 22 years.

“As a general rule, controlling and maintaining coffee quality is a best practice for the entire coffee supply chain – from the farmer to the final consumer,” he tells me. “For roasters, controlling it before it arrives at the roastery is especially important.”

Tatiana Jerez is the Quality Control Manager at Keurig Dr Pepper. She explains that through the Keurig ecosystem, the brand works with partners like Walmart and McCafé, who “demand coffee expertise and high standards to ensure a consistent and great experience”. 

To this end, she says quality management is important, and notes that “controlling the quality of green coffee is a key factor to ensure the superiority of our finished products”.

In addition, Tatiana notes that it’s important for Keurig Dr Pepper to communicate quality to coffee growers and exporters, too. By doing so, they can be clear about what they’re looking for from each coffee, as well as giving them ownership and visibility over the rest of the supply chain.

Ultimately, quality control is important for green coffee buyers and traders alike. However, managing it is easier said than done. Furthermore, if quality is not up to standard, this can cause a financial loss for both or either party, damage the trading relationship, and even cause reputational damage for the farmer or the roaster.

Sampling coffee for quality control.

How do you manage coffee quality?

Many green coffee buyers are based in major consumer markets, which in many cases thousands of miles away from the Bean Belt. This means that when sourcing coffee, even with samples, there’s a lot of trust involved, and roasters must have faith in their partners who work closer to origin.

“One of the biggest challenges is aligning expectations along the supply chain,” Fernando explains.

To this end, he says that using the Q grader certification as a framework is key, as it “allows everyone to speak the same language in terms of quality”. He says that for traders, it can be challenging to work with roasters who don’t use it.

Similarly, there can be challenges when monitoring and controlling quality for producers.

Fernando says: “The biggest challenge with the producers is helping them understand that sometimes the coffee they plant doesn’t always end up being what they expect.

“For example, some producers who plant Geisha always think they’ll get an outstanding coffee no matter what, but that isn’t the case every time,” he adds. “As we know, several factors influence the final cup score of the coffee.”

He explains that aligning expectations regarding price and quality can be complicated. To this end, he says The Coffee Source “always tries to help producers as much as possible by cupping their coffees and providing feedback”.

Meanwhile, Juan points out that “climate change, fungus, and a lack of access to fertilisers” can also challenge the quality of coffee farmers’ crop.

Tatiana says: “As with any other agricultural product, coffee has several intrinsic quality challenges from crop to crop and country to country.

“This can be anything from climate conditions to socioeconomic factors, or the overall dynamic of coffee consumption and demand.”

Juan points to the pandemic and the logistical challenges it has caused as another example.

“Today’s logistical complications mean delays at every step,” he says. “Delays at ports, delays at the warehouse, delays with road and sea transport…”

Coffee professionals inspect drying coffee.

How do you improve quality management for green coffee?

Fernando starts by noting that a consistent framework for quality is important.

“For starters, the main solution is getting everyone on the Q grader framework and having calibration sessions with importers,” he explains. “Traders are the filter between the producer and roaster, so being calibrated with the roaster and understanding what they expect of the coffee they buy is a key part of the business.

“We all need to speak the same language when it comes to coffee quality.”

Juan agrees, but notes that roasters can also make their own judgments on quality.

“Although we are the first filter on quality control, it’s important for the roaster to evaluate their own coffee too,” he says. “The best thing to do is make sure there is consistency between supplier, importer, and buyer. If we’re all in tune, it’s much easier to manage and meet expectations.”

Juan explains that this is why The Coffee Source employs several Q graders in their cupping lab. 

“We conduct calibration sessions to make sure we’re all aligned and know exactly what to look for in our clients’ coffees,” he explains. “We evaluate a range of different coffees together, so that when we get an inquiry from a client, we know exactly what they’re looking for and where we can buy it.”

Tatiana agrees with Juan, and notes that collaboration and alignment are important with partners across the supply chain.

“Working closely with suppliers and partners at origin is key to align our quality expectations and specifications for the coffee we buy,” she says. “As for quality control, we have at least three different control steps for each of our lots, where we check both sensory and physical characteristics.”

Tatiana goes on to note that to align with The Coffee Source, the coffee quality team at Keurig Dr Pepper undertakes a cupping at origin at least once a year, as well as hosting team members from The Coffee Source at their lab in Switzerland and their sensory facility in Spartenburg, South Carolina, US. She explains that they also use quarterly scoring systems to maintain and improve quality.

Another action she discusses is the importance of investing in origin, which is a slightly more long-term way to manage and control coffee quality.

“Investing in farms at origin has a direct impact on coffee quality,” she explains. “Projects that focus on farm sustainability and improving farming practices can increase income for our farmers and improve quality and consistency.”

Coffee professionals visit a coffee farm.

“Relationship coffee”

While there are a number of ways for roasters to manage the quality of green coffee, Fernando says that one of the best ways to do so is by meeting and speaking with the people who grow it.

To this end, he tells me that The Coffee Source regularly organises origin trips and producer visits for most of their customers. 

“This helps us understand what they are looking for,” he explains. “In this way, The Coffee Source can offer several coffees that meet their needs based on quality and how much the roaster wants to pay.”

Juan says that “partnership is key” and that “origin trips create a better link between people”.

He adds that everyone has different expertise, and that they all need to work together to improve their respective outcomes.

“Long-term relationships result in loyalty, communication, and customer satisfaction,” he says. “For me, traveling to origin is a key part of the business of roasting coffee. It’s eye-opening, and it helps to create a better understanding of what is being done on the farm.

Fernando adds: “It also provides a window in which producers, importers, and roasters can cup and align expectations regarding quality and what is being done to improve it.”

Tatiana also attests to the importance of origin trips and spending time in producing countries. 

“Being in the field is the best way to observe seasonality, assess the impact of the climate, judge socioeconomic patterns, and consider the supply chain implications of these factors. 

“There is also value in identifying strategic partnerships and development opportunities for continuous improvement and new products.”

Coffee professionals visit a coffee farm.

Controlling and maintaining quality across the coffee supply chain can be a challenge. It’s clear that making sure everyone is using the same language to talk about it is important. Frameworks like the SCA’s point scoring system and the Q grader qualification can help in this regard.

However, collaboration and good communication are two of the most useful tools a roaster can use when sourcing coffee. Visiting origin, working with dedicated sourcing partners, and establishing positive trade relationships with coffee farmers are all excellent places to start.

Enjoyed this? You might also like our article on how to scale up your coffee sourcing.

Photo credits: Keurig Dr Pepper, The Coffee Source

Perfect Daily Grind

Please note: The Coffee Source is a sponsor of Perfect Daily Grind.

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