As the initial panic over COVID-19 begins to subside and coffee companies begin to look beyond their immediate concerns, sellers and buyers of specialty coffees begin to take a deeper look at the disruptions experienced by various chain partners. value, and what could be the medium-term effects.
Leveraging our work with data donors for the Specialty Coffee Transaction Guide, we brought together a group of progressive coffee industry representatives to discuss the harvest, coffee movement, pre-existing inventory, and expected impacts on relationships. of the supply chain in the coming weeks, months and years.
Uncertainty complicates coffee production and exports
Our conversation started on the farm. In Brazil, where the harvest is just beginning, concerns about health and safety, labor costs and market liquidity were on the mind of Luiz Roberto Saldanha Rodrigues of Capricornio Coffees, a Brazilian export company.
Growers in Brazil, faced with ambiguities about whether or not they will have a market for high-quality coffees, are considering the value proposition of whether it will be worth investing in expensive high-quality coffee production and preparation practices.
“If we don’t have buyers, we could have the problem of having a large harvest, higher labor costs in order to harvest that harvest, and then having a price crisis … [trayendo] great uncertainty in terms of how we should manage this crop, “said Luiz.
In other parts of the coffee producing world, exporters such as Christian Safie of Unitrade Coffee Trading Company in Guatemala are seeing some producers still in the middle of the harvest leaving coffees for those who have no buyers, in the trees. Beyond the loss of income for this season, this abandonment of cherries can lead to future challenges, including pests such as the bit.
Christian is seeing an increase in delayed and canceled contracts, which will ultimately push losses to producers who “are not only losing the coffee they worked so hard to grow because it is falling from the tree, but may not earn income even from whatever they’ve already harvested. “
Nick Kirby of Enveritas – a nonprofit focused on data-driven solutions to long-standing obstacles to sustainability of specialty coffee – echoed these concerns. Enveritas recently surveyed producers in their networks to begin to understand the effects of COVID-19.
Nick stressed that “the general concern [es sobre] whether the buyers are still there ”and whether the sunk investments of producers in batch separation and quality-oriented processing will yield some return.
Christian also spoke of the increased risk exporters are taking to avoid further delays in the midst of quarantine. Once specialty coffee finally makes its way through congested roasting processes, transportation restrictions and port delays are causing delays.
“There are containers waiting at the port, just sitting there and baking … maybe it will affect the quality [pero] We do not know [en qué medida]”Christian said, adding that at Unitrade,” we’ve seen some roasters who prefer to avoid receiving pre-shipment samples and simply tell us to send them coffee as soon as possible. “
We hope that decisions like this to speed up the shipping process do not lead to the disconcerting expectation that the exporter will take the risk of rejections based on the quality expected by importers and roasters upon receiving the coffee.
Sailing demands and commercial channels changeables
Demand uncertainty is also overwhelming in consumer markets like the United States. Jessica Brooks from Allegro Coffee and Geoff Watts from Intelligentsia Coffee joined the conversation to help us understand how roasters have been innovating to keep up with changing consumer demands by trying to keep their most trusted relationships strong.
Reflecting on Christian’s comments regarding shipping quality concerns, Jessica outlined a new direction related to how her team addresses coffee quality. Rather than arguing over the half-point value in a pre-shipment sample to make sure it exactly matches the specifications for its intended use, the Allegro Coffee roasting team has chosen to think creatively when assigning pre-existing contracts and inventory. These efforts mean that they can meet critical future commitments to their supplier partners.
Jessica said: “I think there is a clear need for collaboration and openness between buyers and our suppliers.”
Geoff echoed the sentiments of greater flexibility in allocating coffees, noting that online sales at Intelligentsia have increased as people drink more coffee from home.
He encourages roasters to use this time of rapid change to “contemplate and examine with new eyes what we do and discover how to do better.” When Geoff says “best,” he means looking for ways in which we all consistently win as participants in the specialty coffee value chain.
Collaboration and transparency throughout the value chain
Cafe Imports’ Ever Meister explained that challenging yourself and your peers to consider the myriad disruptions colleagues face throughout the supply chain can be exceptionally difficult, but it is also a necessary exercise to adapt and move forward.
“Now is the time to put the competition aside and really assess our expectations for how we want the specialty coffee industry to operate,” said Meister, while also advocating for stronger relationships between suppliers and buyers.
“I know that buyers are afraid,” said Luiz, but “we [los exportadores] we are also afraid; producers are afraid. “
Mutual empathy will lead to a better collective understanding of the best paths to follow. Throughout our call, there was a shared feeling, underlined by Luiz and Christian, of supporting buyers and clients and developing solutions collectively to achieve a common goal of resilience. This is one of the ways in which these challenging weeks and months ahead could produce lasting improvements in specialty coffee supply chains.
Geoff said: “Of the crisis some of the best innovations, the most creative thinking, the greatest disposition … of having to think to get out of it, often arise.”
Rather than the rigidity of forecasts and the strict zero risk tolerance that roasting companies often maintain, our progressive colleagues have aligned themselves with a desire for flexibility, empathy, and transparency to cultivate collective pathways by which risks and rewards are shared. more evenly.
In this spirit, our export and import colleagues, Christian and Meister, are encouraging conversations with clients who prioritize contract compliance and risk sharing in the coffee movement during this uncertain time.
Meanwhile, Jessica and Geoff, on the roasting side, are encouraging roasters to be creative with the tools they have, including the ability to blend coffees and the ability to shape consumer expectations. This type of creativity will help accommodate changing consumer demands in ways that benefit the entire value chain.
Hope for an evolving industry with shared responsibility
While we realize that we are all scared and face immense challenges, part of our conversation considered that this pandemic could also be a call to action. With the right collective mindset, the COVID-19 crisis could galvanize a market that too often struggles to honestly tackle its many inequalities.
Our collective fear and anxiety can inspire collaboration, give dignified and mutually beneficial importance to all partners in the value chain, and above all, deepen empathy and understanding of the difficulties we all face in our businesses, including in the best moments.
Our network in the Special Coffee Transaction Guide is made up of progressive and innovative members of the coffee industry who accept and appreciate greater transparency and honesty in the value chain, in order to strengthen it. Their leadership and willingness to share their own fears and talk about the challenges they are facing right now is inspiring and we hope that others will be motivated to have critical and challenging conversations in their own supply chains.
To get out of this intact, we will need to keep talking to each other about our experiences, challenges, and even fears. We encourage you to do so within your own networks and to communicate with others with empathy and a spirit of collaboration as we work together to emerge from this crisis as a stronger and more equitable specialty coffee industry.
If you would like to see our recorded conversation with Christian, Geoff, Jess, Luiz, Meister and Nick, click here.
Chad Trewick and Aelish Brown
Chad Trewick has worked for more than 25 years in specialty coffee and now leads Reciprocafé LLC, a consultancy prioritizing mutual benefit throughout the coffee industry. Aelish is a Social Enterprise @ Goizueta Program Associate at Emory University’s Goizueta Business School, where she supports the Specialty Coffee Transaction Guide and Grounds for Empowerment programs.