Direct Trade

Direct trade is on everybody’s mind and the various versions of its logo on an increasing number of coffee bags. Voices arise to point that it is becoming an empty label, a meaningless marketing tool. Is direct trade a new trend that will fade away in a near future? In this discussion, a lot of time and energy is spent to explain the difference between a good direct trade roaster and opportunists. But we tend to forget the perspective of the growers. What do growers think about direct trade? They are the central part of this debate and they will largely influence the future of direct trade. Let’s look at what direct trade means to growers.

Perspectives of better prices

There is no wonder that the first benefit growers see in direct trade is better prices. “It is the first time in 30 years of working in coffee that I see growers able to offer their price on their coffee.”, said Sergio Regina, Brazilian agronomist in São Gonçalo do Sapucai in Minas Gerais. Growers traditionally are price takers. Direct trade gives them the possibility to negotiate their price. Second, through direct trade growers can create a brand for their coffees and drive value from the brand. Third, direct trade also means the possibility to develop long term relationships with roasters to avoid price volatility.

Understand coffee, the market and the supply chain

“We wanted to know how the trade of our beans worked, who were our clients and learn more about coffee.”, Freddy Urbano, Expocosurca, Colombia. Growers usually don’t know much about coffee. They give samples and are offered a price, which they accept or refuse. Their journey into coffee ends at the time they deliver the beans. To whom and at which price the coffee is sold and what roasters think about the coffee are information they can’t access. Direct trade gives them the possibility to integrate with the supply chain and understand coffee from the seed to the cup!

Recognition

Anyone who has visited a coffee farm has noticed how honored growers are to be in contact with the people who roast or drink their coffee on the other side of the world. And even more so for specialty coffee growers: they put so much effort in caring and producing exceptional coffees that hearing roasters’ and consumers’ feedback is a big reward!

Growers are not passive actors of direct trade. They see the value of direct trade and will be the driving force of the direct trade movement, no matter how the industry uses or abuses the concept. It is not an option. It is the future of trade, because this is how the supply chain already works in other industries: exporters and importers act as service providers.

So why would it not be possible with coffee? In the past, distances and the lack of appropriate communication technologies made it difficult to build trust along supply chains. But the world has become smaller and communication has eased. A minimal version of direct trade will become standard: growers and roasters knowing each other and transparency on prices and costs along the chain being available to both ends of the chain. The role of the industry now is to build tools to accelerate this vision.