And a Mill, a Coffee Board, an Exporter, And…

Roasters Rock

Our industry has seen some ‘game-changing’ innovations. Every year we raise the bar on how specialty coffee is imported, roasted, blended, and produced at the cup. We are adding value on the consuming end of the supply chain and being rewarded for it.

An area that has, unfortunately, been a bit left behind in regard to innovations that create financial rewards is at the production end of the chain. Specifically farms, co-ops, mills and exporters. It is a troubling development and begs the question: WHY IS THIS SO?

The coffee industry is infamous in its efforts to take care of the producers and make sure there is a constant supply of specialty coffee. The desire exists. The passion exists. There is unfortunately a big disconnect in knowing what to do, how to do it and how to fund it. Many programs exist, on small scales, which deliver services to where they are needed. Groups like Root Capital have found a way to initiate microfinancing that solves a lot of problems. This is a great solution to specific problems but a larger more comprehensive solution is needed to really change a growing region.

One of the main reasons that we roasters have a bit of a challenge is that we are willing to pay more but we don’t know how to get the money to the producer. The system is too complicated and often inefficient so that we get discouraged feeling we can’t actually reward those that deserve it. This is one of the main reasons ‘Direct Trade’ is such an overwhelming proposition.

To dig a little deeper into solving this problem requires us to have some ‘situational awareness’ of how coffee moves from the farm to the export warehouse. Every community is different, but the job functions remain fairly constant.

You need to grow the coffee. Most farms are pretty small. Often there is only generational knowledge about good farming practices. Education is scarce.

You need to pick the coffee. Sometimes it is done by the farmer’s family but very often workers are hired to do the seasonal work. Labor can be hard to get and is expensive if they do multiple pass harvesting instead of just strip picking.

Once picked, the coffee gets processed. Very often this is done by another party like a co-operative or a 3^rd party mill. At this point usually the farmer is done. They got paid for either their cherry or parchment coffee. Also quite often all traceability is lost as they mix multiple lots to get enough coffee to fill a container. Education at the mill is a little easier to get but small mills often work under that same ‘generational knowledge’.

The mill sells the coffee either through or to an exporter. The exporter is being asked by specialty importers to provide stories and traceability to the farm. For the reasons described above it is almost impossible for the importer to do this.

Roasters want to get this information and wants to get the ‘story’ of the coffee as that has value at the store level.

There is a ‘game changer’ solution being developed in the Yunnan Province of China.  It is called the Yunnan Coffee Exchange or YCE. They are taking an innovative approach and looking at the entire region and shifting the model. They are concentrating on a couple of key principles:

Quality builds value through higher standards, education and ethics. YCE has built a center of education that provides classes in agronomy, best farm practices, processing experimentation and some general farm business fundamentals. They teach the Q Grader protocols to all levels of the supply chain with a special focus on growers and mills as they are the least served with education.

Better efficiencies in the supply chain adds value to the producer. YCE has an innovative trading platform that allows a roaster anywhere in the world to buy micro-lots of coffee from Yunnan with traceability to the producer through an online auction system. You can sit in your roaster and bid on a Q certified lot of coffee in China. You will be able to see all of the farm demographics as well as the story of the producers that you can tell when you sell the coffee. It is in fact the closest most roasters will come to a true direct trade as you are buying direct from the farmer. You are just transacting the sale through the online system.

This comprehensive approach involves many different entities in order to make it work. It takes participation from the village. Sometimes this is harder to get than you would think as people are resistant to change. When you have generational habits it is disruptive to suggest anything else.

To help with education CQI was brought in as an NGO. They are providing education services at the farm as well as providing Q Grader certification courses. This education is instrumental in getting the coffee farmers to understand the true value of their coffee.

The YCE group is a private investment group but they also realized that the Government of China needs to be involved in order to ensure its success. This has created a unique relationship of a private company partnering with a public institution.

The last piece in the puzzle is YOU! For this to work, roasters need to buy the coffee. The YCE group is just launching their trading platform where you can go and buy ‘directly’ from the producer. In an effort to publicize this, YCE sponsored the Best of Yunnan competition that completed in March. I bag from each of the top 12 coffees from the competition is being sent to Seattle where it will be made available for roasters at the SCA convention. Even this will be unique! It is an online auction running Saturday to Sunday at the conference. You can sign up to bid on a bag or two of coffee at yce.coffeeauction.org  You may even be able to meet the producer! That would be an awesome “Direct Trade”!

So it really does take a village, mill, NGO, private and public participation as well as willing roaster to raise the quality. The Yunnan region will be better for it!

Rocky Rhodes is an 18 year coffee veteran, roaster, and Q-Grader Instructor, and his mission now is to transform the coffee supply chain and make sweeping differences in the lives of those that produce the green coffee. Rocky can be reached at
rocky@INTLcoffeeConsulting.com