Tag Archive for: Direct Trade

by Dean Cycon

Direct Trade

Categories: 2015, NovemberTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

Movements are like honey.  They start out sweet but even­tu­ally draw lots of flies.  We have cer­tainly seen that in fair trade and organ­ics, with poseurs putting the mean­ing­less “More than Organic” on their pack­ag­ing.  So it has already become with Direct Trade.

Personally, I think Direct Trade was started by a few com­pa­nies that either didn’t want to pay farm­ers the Fair Trade price, didn’t want to deal with coop­er­a­tives (although they all do,) or just had a more lib­er­tar­ian bent of not want­ing to be told what to do.  Some of the com­pa­nies were hon­or­able, although most made the hope­fully uncon­scious move of rep­re­sent­ing that all of their cof­fees were Direct Trade when only a few were.  Some were down­right bogus.

There is no such thing as Direct Trade, actu­ally.  It is a self-declared and self-created “cer­ti­fi­ca­tion” made to look like some sort of offi­cial approval.  Again, some of the com­pa­nies are well-intended, but already in the short life of the sup­posed Direct Trade model there are many phonies and poseurs.

Theoretically, Direct Trade means that the com­pany has a real and direct rela­tion­ship with the farmer, whether a small farm, large farm or a coöper­a­tive.  They buy direct, not using bro­kers and inter­me­di­aries (who have such a bad name out there, whether deserved or not.) Almost all of them claim to pay “well in excess of Fair Trade pric­ing” but since the Fair Trade price is either a min­i­mum in the bad times or a float­ing price daily, that’s a hard claim to ver­ify.  In my expe­ri­ence, how­ever, many of these guys don’t buy direct at all. It is nearly impos­si­ble to buy less than a full con­tainer directly, as ship­ping costs on a few bags would add sev­eral dol­lars per pound to the price alone. Rather, they buy through bro­kers in busi­ness as usual, but since they may have vis­ited a farmer or coop for a day or two, they claim to have a direct rela­tion­ship.  I think some of these guys really believe they are doing some­thing spe­cial, and while it makes great mar­ket­ing, it makes no sig­nif­i­cant dif­fer­ence in the farm­ers’ lives.

A few weeks ago I was hav­ing a long back and forth email thread with a farmer we work with in Indonesia, Ghair.  We were talk­ing about our fathers, and how they are aging and slip­ping into early-stage Alzheimer’s.  We shared the heart­break for our fam­i­lies and talked about strate­gies for retain­ing dig­nity but putting safety in place for our beloved dads. As I actu­ally know and have spent time with his father, it was a pro­found cor­re­spon­dence.  Soon there­after I got a call from a reporter who wanted me to com­ment on a com­pany that said it was Direct Trade, and how supe­rior their pro­gram was to Fair Trade.  He told me that the owner was proud to know the farmer, and knew his name and even his wife’s name.  “Big deal,” I thought, “but let’s see where this is going.”  I asked the reporter if he would call back the com­pany and tell the owner he was really inter­ested in his story and needed back­ground.  What was the farmer’s name and what was his wife’s name?  A few hours later he called me back laugh­ing.  When asked the farmer’s name, the owner hes­i­tated and then said “Manuel.”  When asked the wife’s name there was a silence and finally the owner said “I’ll get back to you on that.”  An hour later a woman from the com­pany called the reporter to tell him that the farmer’s wife’s name was “Maria.”  This would have been a joke, except that after my cor­re­spon­dence with Ghair it seemed like a rude mar­ket­ing ploy.

Direct Trade is not new. Lots of com­pa­nies like us, Equal Exchange and Coöperative Coffees have been engaged in this kind of trade for decades.  It is what our busi­ness mod­els are based on.  To us, Direct Trade means really know­ing farm­ers we work with on an inti­mate level.  We under­stand their eco­nomic, social, and eco­log­i­cal strug­gles and aspi­ra­tions. We work with them on a very long-term basis to address those – not just by giv­ing more money for one year and find­ing some other farmer to be “direct” with the next year.  We are not importers. We use the great ser­vices of Royal Coffee for that. We iden­tify and visit the coops, make the con­nec­tions and rela­tion­ships, and Royal does the paper­work and phys­i­cal import­ing.  Our rela­tion­ships with farm­ing com­mu­ni­ties are real, long-term and have mean­ing­ful and mea­sur­able impact in the field.

I applaud any­body who tries to break the old sys­tem of abuse in world trade, whether through for­mal Fair Trade, sin­cere Direct Trade or per­sonal rela­tion­ships with integrity and real impact.  But a self-serving dec­la­ra­tion that a com­pany is “Direct” doesn’t meet that stan­dard.  Don’t take their word for it (espe­cially as there are no reg­u­la­tions or stan­dards what­so­ever beyond self-declared ones.)  Ask the hard ques­tions, like …what’s the farmer’s name?

Direct Trade: a Honduran Success Story

Categories: 2013, NovemberTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

Aside from sourc­ing awe­some cof­fee, one of the thrills of direct trade is con­nect­ing with the farm­ers who grow the crop. At Crimson Cup, we’ve been for­tu­nate to build a rela­tion­ship with David Lopez, one of the dri­ving forces behind the trans­for­ma­tion under­way in the remote Honduran vil­lage of El Socorro de la Penita. Working with David and other local farm­ers since 2011, we’re see­ing sig­nif­i­cant impact in the com­mu­nity school and improve­ment in the qual­ity of coffee.

Growing up in the vil­lage, David attended its one-room Jose Cecilio del Valle ele­men­tary school through the sixth grade. Formal edu­ca­tion ends there for 95 per­cent of the community’s chil­dren. David how­ever, was deter­mined to keep learn­ing. He left to attend junior high and then high school in larger communities.

After grad­u­at­ing high school, David took a job at one of the area’s larger cof­fee mills. There, he received a ground­ing in the cof­fee trade. Among other lessons, he learned the impor­tance of qual­ity in deter­min­ing cof­fee price. He wit­nessed the power of coops in nego­ti­at­ing prices. And he expe­ri­enced the enhanced qual­ity of life that came about as a result.

DSC00329A deep com­mit­ment to his her­itage drew David home in 1999. Upon his return, his father gave him 18 acres of land that were being used for cat­tle pas­ture. He began the process of cre­at­ing a cof­fee farm, plant­ing shade trees, and high-quality cof­fee trees. He did not see a yield until 2003, when he har­vested six bags of cof­fee. Ten years later, he owns 40 acres, with 15 ded­i­cated to cof­fee. Through David’s focus on proper cul­ti­va­tion, yields have grown steadily so that, this year he har­vested 11 tons of cof­fee. He projects a 13-ton crop in 2014.

As in many small com­mu­ni­ties, the 21 cof­fee farm­ers in El Socorro had been at the mercy of cof­fee coy­otes when sell­ing their crop. They earned barely enough to cover the costs of cul­ti­va­tion. David decided to change that. He helped orga­nize his neigh­bors into Coop Cultivadores del Reino, allow­ing them to nego­ti­ate higher prices by sell­ing as a group. He also built a wet mill to process their cof­fee locally, improv­ing its qual­ity and consistency.

David’s hard work came to our atten­tion in 2011. Since then, we’ve devel­oped a direct trade rela­tion­ship with David and other coop mem­bers designed around four pil­lars of impact – price, qual­ity, pro­duc­tion, and education.

Cash is the fuel of com­mu­nity growth, and the amount of cash cir­cu­lat­ing in the com­mu­nity depends directly on the price of the cof­fee crop. Crimson Cup has com­mit­ted to pur­chase a large amount of El Socorro cof­fee at a pre­mium over mar­ket price.

We’re in the busi­ness of sup­ply­ing the best cof­fee avail­able and the farm­ers under­stand that price depends on qual­ity. The secu­rity of know­ing that they will be paid for high-quality cof­fee gives them an incen­tive for using bet­ter pro­cess­ing meth­ods and invest­ing in sus­tain­able cul­ti­va­tion techniques.

Having a com­mit­ted buyer also strength­ens the coop and moti­vates the farm­ers to main­tain con­sis­tent pro­duc­tion. They are will­ing to rein­vest prof­its in equip­ment, nurs­eries, and rust-fighting pro­to­cols to keep pro­duc­tion where it needs to be. Moreover, they are look­ing at putting more land into cof­fee pro­duc­tion instead of mov­ing to other crops.

The demand for qual­ity has inspired a renewed focus on edu­ca­tion. With David set­ting the exam­ple, com­mu­nity mem­bers’ eyes have been opened to what edu­ca­tion can achieve. To sup­port edu­ca­tional improve­ments, Crimson Cup has donated new text­books, com­puter desks, and other improve­ments to the school. We’re get­ting ready to launch a crowd-funding ini­tia­tive through Indiegogo to raise funds for an English-speaking teacher for the school.

In 2013, we spon­sored a ser­vice learn­ing trip to the vil­lage by five stu­dents from The Ohio State University College of Food, Agricultural, and Environmental Sciences. Working with David, other com­mu­nity lead­ers and Stephan Erkelens of Axiom Coffee Ventures, we helped the stu­dents craft a thriv­ing cof­fee enter­prise. We will be work­ing with Ohio State stu­dents, David and other local lead­ers to imple­ment the plan.

Of course, the stu­dents learned as much from the farm­ers as the farm­ers did from them. That is the beauty of direct trade – it is a con­tin­u­ing cycle of mutu­ally ben­e­fi­cial relationships.

Direct Trade: Relationships

Categories: 2013, SeptemberTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

Why get into the cof­fee busi­ness?  Relationships.  Seeking out like-minded peo­ple all over the cof­fee grow­ing world and return­ing home with their hard work to share is what sep­a­rates cof­fee as a busi­ness from cof­fee as a lifestyle. My col­league Brandon Bir and I were for­tu­nate to find our­selves in Guatemala ear­lier this year amongst the finest of cof­fee and people.

We drop out of the sky and into the land of eter­nal spring. The weather in Guatemala, as adver­tised, is going to make our search that more enjoy­able. Brandon and I are here in search of that moment – hard to define but easy to spot once it hap­pens – when we dis­cover a cof­fee we just have to have. After cup­ping cof­fee together daily, Brandon and I know what we’re look­ing for.

At the air­port gate, we’re met by a friend who has set aside a few days to guide us. He is no stranger to this jour­ney; in fact, he has ded­i­cated his life to it. Once the youngest Q-grader in the world, Jorge Ovalle now spends most of his time look­ing for great cof­fee. We have arrived with the same purpose.

We quickly escape the air­port and embark on our quest. We are headed to Antigua, a grow­ing region of great tra­di­tion and renown. Some of the world’s most elo­quent cups of cof­fee are born in Antigua every year, but this year’s har­vest has come under attack. The region, like much of Central America, has fallen prey to Roya, or cof­fee rust, caused by the fun­gus hemileia vas­ta­trix. Even at drive-by speeds the effect is obvi­ous. The once-lush green foliage usu­ally adorn­ing the hill­sides has been replaced by spindly twigs, mere skele­tons of their for­mer grandeur. Some hold on to their dig­nity despite the plague and bravely man­age clus­ters of bright crim­son berries. The extent of the dam­age varies from one farm to another, as each uti­lizes its own prac­tices. Of course, the most vul­ner­a­ble farmer is the organic farmer, who can­not use chem­i­cal fungi­cides to com­bat the plague.

Jorge takes us to Maria del Pintado, the only Antigua cof­fee farm that is cer­ti­fied organic. Standing in the shad­ows of a majes­tic 400-year-old hacienda, which once housed Mother Teresa for a visit, we are wit­ness to a near-apocalyptic scene of denuded cof­fee trees. While Mad Max may have looked around, dusted him­self off and moved on, the owner and man­agers here have shown more back­bone. Within a few weeks, they must decide whether or not they are going to pull up all the plants and start over. If they do, there will be no yields for years to come. The other option is the use of non-organic fer­til­iz­ers. After meet­ing Belarmino, the man­ager, I don’t believe that this was ever a con­sid­er­a­tion. While tour­ing the grounds we learn of his fierce ded­i­ca­tion to this land and the cof­fee on it. Every aspect of pro­cess­ing El Pintado cof­fee takes place on the farm and under Belamino’s over­sight. “This was to be the year,” Belarmino told us, “But for the rust.”  The yield for this year’s har­vest can’t be ignored. Only 60 bags.

When the meet­ing of minds takes place and the fate of El Pintado is deter­mined, a key fig­ure in the deci­sion will be Jorge’s father, Jorge De Leon, Sr. He started in cof­fee in 1981 at age 17. He got a job clean­ing the cup­ping labs and orga­niz­ing the results. He would blind cup the sam­ples him­self and com­pare his notes with cup­pers’ records while no one was watch­ing. Jorge cleaned for years before he was offered the addi­tional duties of roast­ing the sam­ples. After work, he would go to the library and learn what he could about grow­ing and pro­cess­ing cof­fee. He has since worked as a cup­per for farms and labs through­out Guatemala, advis­ing on all aspects of qual­ity con­trol: farm­ing, milling, and cup­ping. In 2011 he won Guatemala’s national cup­ping com­pe­ti­tion and rep­re­sented Guatemala in Amsterdam at the world cup­ping com­pe­ti­tion where he was a final­ist. His work ethic remains unchanged 30 years later. Next to his house is his roast­ing and cup­ping lab. After vis­it­ing farms all day with Jorge Jr. we join Jorge Sr. at his house each night. We start cup­ping again between 8 and 9 p.m. Sometime after mid­night Brandon and I have to call it a night. Our nerves are on over­drive from a steady diet of caf­feine and we have new farms to see and new cof­fees to try first thing in the morn­ing. You just can’t out-cup the De Leons.

It was in the De Leons’ pri­vate cof­fee lab where we had that moment for the first time in Guatemala. Brandon and I both know this is what we are look­ing for. It was a blend that Jorge Jr. had put together using beans from local small-lot farms. We dubbed this blend “Jorge’s Pick.” Jorge had already taken us to visit many of the farms where the cof­fee was grown. Unfortunately, none of them would be able to help export the unusual blend, and the De Leons don’t have an export license. Still, we had to have this coffee.

The next day we cupped some good cof­fees and a few that stood out when that moment hit us again. It was the quin­tes­sen­tial Antigua, bal­anced and soft, rich with choco­late notes but still no real spikes. It is exactly what I want in an Antigua, and we have to have some of this too. As it turns out, this cof­fee is the prod­uct of El Pintado. But with such a small yield this year and reg­u­lar cus­tomers in Korea, would there be any left for us?  Obtaining the cof­fee would involve call­ing the owner, who was out of the coun­try at the time. She made her­self avail­able for us and agreed to set aside some bags of cof­fee. We also were for­tu­nate to make arrange­ments for export­ing the two types of cof­fee.  We have recently learned that the cof­fee trees of El Pintado will be spared.  I hope we are able to join them next har­vest, see their progress and shake hands again.

Coffee is a busi­ness of rela­tion­ships. The trick, when it comes down to it, is do you trust who you’re doing busi­ness with?  We trav­eled to Guatemala to find great cof­fee but more impor­tantly, strengthen the rela­tion­ships with the peo­ple behind the coffee.

Direct Trade: Origins

Categories: 2013, AugustTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

I’m a lit­tle uneasy but I’m not sure why.  I’ve become obsessed with a drum­beat com­ing from the oppo­site cor­ner of a town square in south­ern Mexico.  It’s a beau­ti­ful Spanish colo­nial town and I’m sit­ting in front of a delicious-looking meal at a side­walk café.  I just flew in from Columbus, Ohio and should be hun­gry but I can’t divert my atten­tion from the sound of the drum.  Now the street per­form­ers have aroused my atten­tion visu­ally and I can’t wait to get out of my chair, aban­don my meal, and explore.  I feel as if pry­ing myself out of this seat would per­mit the ten­sion to sub­side and allow me to enjoy the city of Oaxaca in this, my first trip to origin.

I’m trav­el­ing with a great group of peo­ple from all over the map, and they are busy wip­ing their brows from a long day of travel, eat­ing and toast­ing, mak­ing plans and obser­va­tions as we dine together.  In gen­eral the group is feed­ing on each other’s excite­ment, the excite­ment of being here and the antic­i­pa­tion of days ahead.  Not me, though. My skin is start­ing to crawl and focus­ing on con­ver­sa­tion is becom­ing more dif­fi­cult.  I want to join in. I’ve been cross­ing boxes off the cal­en­dar for this day, but I’m start­ing to strug­gle with my senses.

We will be leav­ing for the cof­fee farms after a night’s sleep.  We will trek south across the isth­mus of Mexico to San Miguel and join a co-op for their annual meet­ing.  The co-op is com­prised of 50 grow­ers that have banded together with a com­mon cause and the results are note­wor­thy.   Together they have cre­ated a mercy fund to sup­port each other in lean times.  As an exam­ple, they once called an emer­gency meet­ing when a snake bit the daugh­ter of one of the farmer’s.  The near­est hos­pi­tal is an eight-hour drive. The father didn’t own a car nor have the money for travel and med­ical expenses.  As a group, how­ever, they were in a posi­tion to save a life.  Bound by cof­fee and com­mu­nity they were able pro­vide the resources to spare her. This is the kind of story that has brought me to Mexico.  Not to men­tion that they are pro­duc­ing some very nice cof­fee and I’m anx­ious to learn from them.

While that adven­ture starts tomor­row, I’m nav­i­gat­ing my own adven­ture at the moment.  We pay our tab and wan­der toward the street fair wait­ing to absorb us.  I con­fide in Stephan, a friend and one of my travel com­pan­ions, regard­ing my con­di­tion.  He is German born and has spent most of his life liv­ing in Guatemala but now lives in Southern Cal.  I say this because he is far bet­ter trav­eled than I and I need his advice.  We talk only briefly.  Bottom line: absolutely look into travel alerts, pre­pare your­self.  Never take the “once-a-week” dose of anti-malaria med­i­cine; it’s hardcore.

After 4-wheeling our way through a cou­ple of rivers and har­row­ing moun­tain passes to San Miguel the next day, my state of mind couldn’t be bet­ter.  I am loaded with ques­tions but want to play it cool.  All in time, I think. I’m here for four days.  Upon arrival I imme­di­ately learn that the mem­bers of the co-op have never met a roaster from out­side of Mexico.  They have as many ques­tions for me as I do for them, and the rap­port is imme­di­ate.  They want to under­stand cof­fee cul­ture in America and what role I play.

I tell them how we eval­u­ate cof­fee and learn that they have never cupped before.  I have the oppor­tu­nity to cup with grow­ers whose fam­i­lies had been pro­duc­ing cof­fee for gen­er­a­tions.  We have a great time.  Armed with cof­fee and cama­raderie we fall into a place of peace with our sur­round­ings.  I am invited to visit many of the farms. I’m hum­bled by the hos­pi­tal­ity I receive and inspired by the sto­ries I hear.  They are not wealthy, but gen­er­ous and, in gen­eral, happy.

Sleeping in a tent, bathing in a river, the new sur­round­ings, and stim­u­lus offer the oppor­tu­nity to get really tired.  Once the keen edge of excite­ment is dulled, it is much eas­ier to pick up on the vibe of San Miguel.  It is in gen­eral, a happy and grate­ful place.  Our group dis­cusses this on our last night in Mexico.  We term it “re-entry.”  What will we bring home from this expe­ri­ence and how can we carry on the vibe?  Of course we will all sink back into the famil­iar rou­tines that make up our days and lives.  Nothing wrong with that; I just hope to appre­ci­ate it more.  Most of all I will always keep them in mind through my deci­sions as a cof­fee buyer.

That first trip to Mexico is now years in the past, and I’ve since made sev­eral other vis­its to ori­gin.  I’ve learned a few lessons along the way and con­sider myself a more weath­ered trav­eler.  I also believe I’ve devel­oped a bet­ter eye for what I see on trips to ori­gin and it has cer­tainly shaped my world­view.  Often I am pitched on buy­ing a cof­fee that is premised on the idea that it will help the farmer.  It is so easy to find your­self in a coffee-growing region where the land­scape is lit­tered with good inten­tions.  Buying some­one out of poverty isn’t a long-term answer.  Engaging in a sup­ply chain of mutual ben­e­fit is a real answer for all involved.  This begins through a process of mutual under­stand­ing.  Direct trade is a pop­u­lar phrase these days.  But to me, the ori­gin of direct trade means one thing – a direct con­nec­tion.   It’s my job to share that story with every­one else in the sup­ply chain and com­plete the connection.

Building Bridges: The Path to Direct Trade

Categories: 2013, MayTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

On March 7, 60 cof­fee pro­fes­sion­als and 17 Costa Rican farm­ers gath­ered for Terra Bean Coffee’s pilot Direct Trade Event, at the Joe Pro Shop in NYC, pro­vid­ing roast­ers with an oppor­tu­nity to build direct trade rela­tion­ships with farm­ers. The roast­ers attended in per­son and the farm­ers via Skype. The goal – bridg­ing the knowl­edge gaps between those who grow the cof­fee and those who roast it to build capac­ity and develop mutu­ally ben­e­fi­cial and sus­tain­able relationships.

The atmos­phere was full of excite­ment about new direct sourc­ing oppor­tu­ni­ties and the chance for roast­ers and farm­ers to share the expe­ri­ence and learn from each other. The roast­ers cupped the cof­fees and spoke directly with the farm­ers, at ori­gin. The farm­ers were given a unique oppor­tu­nity to mar­ket their own farms, instead of depend­ing on an exporter to sell their coffee.

Transparency leads to greater account­abil­ity and cre­ates new oppor­tu­ni­ties for entre­pre­neurs, both farm­ers and roast­ers. Change that requires over­com­ing cul­tural dif­fer­ences and dis­par­ity of infor­ma­tion will not occur overnight how­ever, it begins with a con­ver­sa­tion, such as the one that started at the Direct Trade Event.

How did the Direct Trade Event come about?
I learned about cof­fee from the farm­ers. As a Peace Corps vol­un­teer, I was inspired by the entre­pre­neur­ial spirit of the famers; and espe­cially those who started their own micro-mills. They had invested time and money into their farms in order to take greater con­trol over pro­cess­ing their cof­fee and the sup­ply chain. However, they were unable to extend their busi­nesses beyond a cer­tain link in that chain due to a lim­ited under­stand­ing of their mar­ket, the cof­fee cul­ture of the cof­fee drinkers and the supply-chain logistics.

One farmer, in par­tic­u­lar, took me under his wing. Javier Meza, owner of the La Cabana micro-mill, taught me every­thing I know. I shad­owed him, par­tic­i­pat­ing in every part of the process. We spent hours pon­der­ing the con­di­tion of the Costa Rican cof­fee indus­try and brain­storm­ing new oppor­tu­ni­ties to break out of the tra­di­tional mar­ket structure.

Fast for­ward to today…
The Direct Trade Event required an enor­mous amount of col­lab­o­ra­tion on the part of the farm­ers. My phi­los­o­phy going into the project was that I would only take on the chal­lenge if the farm­ers demon­strated their com­mit­ment, as well. They did, exceed­ing expectations!

In January, I trav­elled to Costa Rica to meet with the farm­ers… Peace Corps-style. Javier spread the word about the meet­ing amongst the micro-mills before I arrived. Would any­one show up? One of my biggest chal­lenges was re-adapting to the cul­tural dif­fer­ences. The meet­ing started at 3pm… 3:30, only 2 micro-mills showed up. 3:45, oth­ers started trick­ling in… Phew!

We gath­ered around my lap­top as I pre­sented my pro­posal to them to host an event in NYC focused on build­ing direct trade rela­tion­ships between farm­ers and roast­ers. They were excited about the con­cept of direct rela­tion­ships and the oppor­tu­nity to speak directly with the roast­ers. The excite­ment in the air grew as a plan was laid out where the farm­ers’ are in con­trol of their own busi­nesses and no longer depen­dent on exporters. While price is an incen­tive, the empow­er­ment from feel­ing in con­trol is invaluable.

The farm­ers were thirsty for infor­ma­tion about the cof­fee indus­try beyond their farms. Oftentimes, they are only pro­vided with the infor­ma­tion that they need to know, with lit­tle under­stand­ing of, or access to, infor­ma­tion about what hap­pens next. We spoke about the fac­tors that con­tribute to roast­ers’ buy­ing deci­sions and how cof­fee is served in cof­fee shops… espresso drinks, drip cof­fees, pour-overs.  We spoke about the dif­fer­ent types of North-American cof­fee drinkers, the spe­cialty cof­fee cul­ture and the atten­tion being given to single-origin coffees.

To help them under­stand the sup­ply chain and pric­ing, we spoke about the func­tion of exporters and importers and what addi­tional fees are incor­po­rated into the cost of the cof­fee before reach­ing the roaster. We spoke about how most roast­ers buy on spot. We spoke about the risks and lim­i­ta­tion of buy­ing directly from farms and brain­stormed ways to mit­i­gate those risks. We spoke about the lim­i­ta­tions to buy­ing directly for small roasters.

As word of the project spread, other farms tracked me down. I spent the rest of my trip vis­it­ing the farms and micro-mills and speak­ing with the farm­ers on an indi­vid­ual basis.

Alliance for Coffee Excellence

Categories: 2012, JulyTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

Contact Name: Susie Spindler

Location: Various Coffee Growing Countries
Email Address:
Phone Number: 406−542−3509

Project Description

The Cup of Excellence is the most strin­gent com­peiti­ton for top qual­ity cof­fees in the world. It awards a country’s best cof­fees and sells them to the high­est bid­der dur­ing a global inter­net auc­tion. It is open to all farm­ers equally with­out a fee and the rules are struc­tured to allow any farmer that pro­duces excep­tional qual­ity to win regard­less or eco­nom­ics or gen­der. These win­ning cof­fees are cho­sen by a select group of national and inter­na­tional cuppers.

Coffees of this exem­plary qual­ity are rare. These cof­fees are per­fectly ripe, care­fully picked with well devel­oped body, pleas­ant aroma and a lively sweet­ness that only extremely high qual­ity spe­cialty cof­fees con­tain. Each win­ning cof­fee has its own fla­vor sig­na­ture from the earth where it grows and all have been hand­crafted in such a way as to enhance these unique char­ac­ter­is­tics. The competition’s extrememly strin­gent qual­ity selec­tion pro­ce­dures with a focus on bal­anced acid­ity and per­fect sweet­ness have set a global stan­dard for those cup­pers look­ing for top cof­fees. Roasters that have these beau­ti­ful cof­fees on their shelves find that their cus­tomers are more engaged and are more likely to appre­ci­ate the dif­fer­en­ti­ated fla­vor pro­files that only top cof­fees can that generate.

The Cup of Excellence pro­gram has had huge impacts on both the farm­ers and on the spe­cialty indus­try world­wide. Before there was Cup of Excellence much of the world’s cof­fees were blended together, there­fore caus­ing a commodity-like same­ness even in the spe­cialty indus­try. The result of the now 75 Cup of Excellence com­pe­ti­tions has been to rein­vent an indus­try that is now focused on unique qualti­ties, micro cli­mates, vari­etals and on con­stant dis­cov­ery of qual­ity pro­tec­tion and farmer recognition.While the fear was that the com­pe­ti­tion would cherry pick the best cof­fees and leave the rest, it has had the oppo­site effect, and has actu­ally increased the total amount of qual­ity cof­fees exported at a pre­mium from COE part­ner countries.

The cof­fees that have been dis­cov­ered and sold at auc­tion have allowed a new group of spe­cialty roast­ers focused on extremely high qual­ity cof­fees and buildng rela­tion­ships with farm­ers to thrive. The open auc­tion for these award win­ning cof­fees has sup­ported a restruc­tur­ing of top pric­ing and reset what is pos­si­ble for farm­ers that pro­duce incred­i­ble cof­fees. The fact that the COE pro­gram forces trans­parency, chain of cus­tody and a large finan­cial reward to the win­ning farm­ers has given thou­sands of farm­ers a rea­son to know the value of their cof­fees– to learn to cup– to har­vest more care­fully and to feel more secure that if they work hard there will be eco­nomic sup­port. It has also given their chil­dren an excit­ing rea­son to stay on the farm as proud cof­fee farmers.

Who Benefits From This Project?

The Cup of Excellence fun­da­men­tally changes what we know is pos­si­ble in an exem­plary cof­fee. This ben­e­fits the entire cof­fee chain because it engages the con­sumer in a dis­cus­sion cen­tered on the joy of qual­ity coffee.Often these award-winning cof­fees are so good that con­sumers expec­ta­tions of what a cof­fee can taste like are def­i­nitely exceeded.

Many roast­ers and importers have relied on the COE results to find the high qual­ity farm­ers their busi­nesses depend on and have found a new demo­graphic of cus­tomers who appre­caite qual­ity and are will­ing to pay for it. Cup of Excellence is an impor­tant vari­able in the Direct Trade movement.

The ben­e­fit to the win­ning farmer is obvi­ous but the entire region ben­e­fits from the recog­ni­tion as buy­ers visit all of the sur­round­ing farms as well. The pay­ment to the cof­fee farm­ers for their cof­fee is more than Fair. The vast major­ity of the auc­tion pro­ceeds go to the farmer, the rest to the organ­inz­ing com­mit­tee. ACE does not make money on the auc­tions. There is no other pro­gram that is as excit­ing for the cof­fee lover, the roast­ers and espe­cially the farm­ers whose mon­e­tary reward often changes the lives of their entire fam­ily and the rural com­mu­ni­ties where they live.

Cup of Excellence builds inter­na­tional rela­tion­ships and coöper­a­tion in many forms. Coöperation is the key to suc­cess, appre­ci­a­tion is the mantra and friend­ships and last­ing part­ner­ships are crit­i­cal. It is one of the few pro­grams that puts its main focus on indi­vid­ual empow­er­ment, train­ing and edu­ca­tion with no con­sid­er­a­tion of gen­der or eco­nomic status.

How Can I Help?

Become a mem­ber of Alliance for Coffee Excellence. Register on line. Sign up for sam­ples, join a jury, or sim­ply sup­port ACE with your mem­ber­ship. A small fee to sup­port a global non-profit orga­ni­za­tion mak­ing a difference.

An ACE mem­ber­ship with sam­ples and auc­tions gives the inter­na­tional cof­fee
com­mu­nity the oppor­tu­nity to bid for award-winning cof­fees which in turn
pro­vides the sup­port to farm­ers ensur­ing qual­ity for the future.
Visit to view mem­ber­ship benefits.

Support your local roaster. Look for and buy Cup of Excellence roasted cof­fees from your favorite cafes and roast­ery world­wide.
Most impor­tantly, brew and drink COE Coffees and reflect on the farm­ers who make it pos­si­ble for ACE to change the world of cof­fee. Thank you for your kind consideration.

Have the Spin Doctors Cured Us of “Sustainability?”.… The Core Conditions Persist

Categories: 2011, DecemberTags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Author:

Our cof­fee import­ing busi­ness has been around long enough to have rid­den the com­modi­ties roller coaster over a cou­ple moun­tain tops. After pass­ing the peak in 1997, we rode the mar­ket down into the 2002 val­ley of death like the “charge of the light brigade.” Many small pro­duc­ers did not sur­vive, those work­ing with us in Mexico sur­vived because of our unique quality-based busi­ness model. After the most recent mar­ket peak last spring, it appears that we are fac­ing new chal­lenges; not only are the com­modi­ties being jos­tled by all the usual sus­pects, but now we also have major inter­na­tional bank­ing woes and seri­ously ris­ing costs of fuel and fer­til­izer. As these con­di­tions again stretch the sus­tain­abil­ity of cof­fee, our com­pany increas­ingly finds itself head­ing in the direc­tion of the intrin­sic sus­tain­abil­ity offered by a “Direct Trade” model.

One can learn a lot about sus­tain­abil­ity in gen­eral by enter­ing “The Politics of Sustainable Development, Susan Baker”1 into the Google® search win­dow to get an eye­ful. She shows that we’ve come a long way from the seem­ingly sim­ple con­cept where “sus­tain­abil­ity is improv­ing the qual­ity of human life while liv­ing within the car­ry­ing capac­ity of sup­port­ing eco-systems”2: we now have schol­arly works that inves­ti­gate the idea of sus­tain­abil­ity from all of its myr­iad envi­ron­men­tal, social, and eco­nomic aspects, as well from every polit­i­cal view­point. Is there spin? You bet!

To become more “sus­tain­able” in the cof­fee busi­ness we need to pro­mote alter­na­tives to com­modi­ties pric­ing for small cof­fee grow­ers. Why is this? It is because com­modi­ties pric­ing guar­an­tees the buyer the low­est pos­si­ble price based on avail­abil­ity, but unfor­tu­nately simul­ta­ne­ously guar­an­tees the seller a price that has noth­ing to do with his cost of pro­duc­tion. Although many large pro­duc­ers have the resources to “fly­wheel” over this short term “incon­sis­tency” in price as sup­ply and demand reach equi­lib­rium on a time-scale mea­sured in years, the small pro­duc­ers take the hit. Small pro­duc­ers are in the great major­ity world­wide and gen­er­ally have few resources and lit­tle access to mar­kets. They also have lit­tle access to credit or hedge accounts and need an alter­na­tive to sus­tain their liveli­hoods on a time-scale mea­sured in weeks.

Small pro­duc­ers rep­re­sent a very large pop­u­la­tion world­wide; in Mexico alone, 88% of the pro­duc­ers have less than 2 Ha in cof­fee (5 acres) acres in cof­fee and pro­duce about 55% of Mexico’s cof­fee . It is esti­mated that less than 25% of these small hold­ers have the oppor­tu­nity to hedge their cof­fee with con­tracts against the “C” market3. This means that about 40 % of the cof­fee pro­duced in Mexico (about 1.5 mil­lion 69 kg bags) is sold with­out pro­tec­tion from mar­ket volatility.

What’s more, notwith­stand­ing the few with pro­tec­tive hedges, it is esti­mated that the total amount of cof­fee sold against com­modi­ties pric­ing schemes is over 90% of Mexico’s production.4 “….Mission con­trol, we have a problem.”

I believe that we urgently need to seek and pro­mote strate­gies that con­sis­tently bring more money into cof­fee pro­duc­ing com­mu­ni­ties, simul­ta­ne­ously increas­ing access to credit, rais­ing the level of edu­ca­tion, and reduc­ing reliance on com­modi­ties pricing.

Judging by the increase in the num­ber of com­pa­nies now offer­ing “Direct Trade” cof­fee, many have reached sim­i­lar con­clu­sions. Direct Trade offers buy­ers an oppor­tu­nity to short cir­cuit com­modi­ties pric­ing and guar­an­tee pro­duc­ers enough money to cover their cost of pro­duc­tion along with a mod­est profit. For this to work, pro­duc­ers must be able to guar­an­tee buy­ers a con­sis­tent source of con­sis­tent qual­ity, fully trace­able cof­fee. It is this exact point where there exists the great­est ben­e­fit for both par­ties, because pro­duc­ers are forced to adopt prac­tices and process con­trols that per­mit them to make this promise.

It is our expe­ri­ence that with increased process lit­er­acy and with process con­trols in place, cof­fee auto­mat­i­cally becomes fully trace­able. The process ori­ented “cul­ture” that pro­duced the cof­fee, taken with the con­comi­tant doc­u­men­ta­tion trail makes it rel­a­tively easy for the pro­duc­ers to obtain nearly any certification.

We have found that the order and trans­parency that process con­trols force in to the sys­tem increase access to credit; bankers are much more likely to loan to those who can show where and how the money is being used; sim­ply said, there is much less risk all around.

Process con­trols force trans­parency and trace­abil­ity into the sys­tem at it’s base, e.g. between the cof­fee plan­ta­tions and the exporter. The rest of the route to roaster cus­tomers is already pretty well con­trolled. This is sig­nif­i­cant because it means that adop­tion of a Direct Trade com­mer­cial model does not change the route that cof­fee takes from pro­ducer to the con­sumer, it only forces process con­trols, trans­parency and trace­abil­ity into the entire chain, end to end. It is exactly this end-to-end trans­parency and trace­abil­ity that is con­sid­ered essen­tial for solid eco­nomic growth.

We have been suc­cess­fully using a Direct Trade model in Mexico for fif­teen years and have worked with our Mexican asso­ciates at Cafes Sustentables de Mexico, S.A. de C.V. to develop the FincaLab cof­fee qual­ity con­trol sys­tem. The FincaLab is a portable Laboratory with process con­trol soft­ware that pro­vides all the nec­es­sary con­trols and trans­parency, as well as prints bar­code labels with ser­ial num­bers on each bag that per­mit our cus­tomers to trace the cof­fee to it’s ori­gin at Our expe­ri­ence has been that the increased earn­ings that result from our model taken with along with the FincaLab have allowed the pro­duc­ers to develop their coop­er­a­tives, build infra­struc­ture, and to gain the con­fi­dence to apply for their own pre-harvest financing.

We have been suc­cess­fully mak­ing cof­fee more sus­tain­able for our Mexican associates.

Jim is the Company founder. He estab­lished work­ing rela­tion­ships with Mexican coop­er­a­tives in Nayarit, intro­duc­ing a unique pro­gram of quality-based profit shar­ing. He guided com­pany devel­op­ment as a broad based dis­trib­u­tor of qual­ity cof­fees with an empha­sis on directly traded, exclu­sively mar­keted, and fully trace­able cof­fees from Nayarit, Mexico. He devel­oped the FincaLab, a portable lab­o­ra­tory and qual­ity man­age­ment sys­tem with pro­pri­etary soft­ware and a pro­pri­etary new, “hands off” pre­ci­sion sam­ple roaster, and a lab­o­ra­tory huller for cof­fee sam­ple prepa­ra­tion. The FincaLab is the core of a com­plete cof­fee process con­trol sys­tem that out­puts bar codes and ser­ial num­bers for all processed cof­fee that results full in Internet trace­abil­ity through

1 The Politics of sus­tain­able devel­op­ment: Theory, Policy and Practice within the European Union, Susan Baker (1997)
2 Caring for the Earth: A Strategy for Sustainable Living, Gland, Switzerland. (2009)
3 Silvia Guttierrez, AMECAFE, per­sonal com­mu­ni­ca­tion
4 Ing. Manuel Higuera, CONAYCAFE, per­sonal communication.

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