But relationship coffee isn’t necessarily something which excludes other actors. Consider importers and exporters – in most cases, they work more closely with producers than roasters are able to. As such, healthy working relationships between traders and farmers are crucial.
But this leads to another question in many cases: what can suppliers do to add value to a producer’s coffee? To learn more about this, I spoke to two industry experts at Mercon Specialty. Read on for more of their insight.
What is “Relationship Coffee”?
Before we look specifically at the nature of the relationship between specialty coffee producers and traders, we first need to revisit what relationship coffee means.
Similar to direct trade, there is no formal definition for the term. However, relationship coffee generally refers to the concept of sourcing coffee through relationships with producers. These have been developed over an extended period of time, too.
Giacomo Celi is the Group Sustainability Director at Mercon Coffee Group.
“Strong value chain relationships are the basis for long-term planning,” he says. “In the specialty coffee value chain in particular, maintaining excellence in coffee quality requires investment and long-term planning at farm level.”
The idea behind these partnerships is to encourage long-term buying between producers and roasters, rather than roasters making a smaller number of one-off purchases. Roasters will usually commit to paying higher prices as well.
However, when it comes to producers and green coffee traders, there is typically less discussion around relationship coffee – despite how closely they often work closely together.
Why are producer-trader relationships so important?
Ultimately, establishing a solid bond between producers and traders is key to maintaining coffee quality and achieving true sustainability. For instance, the producer needs to know the trader will pay a fair price for coffee. In turn, the trader needs to know that the coffee will meet the necessary quality standards.
Similarly, producer-trader relationships can provide economic stability for both parties, as well as building more trust. When working with reliable and consistent buyers, producers are able to sustainably invest in their farms. Green coffee suppliers, meanwhile, can rely on a steady supply of high-quality coffee from trusted partners.
Jessenia Arguello is the Sustainability Production Manager at Mercon Coffee Group.
“From the green coffee suppliers’ side, understanding the level of effort, the necessary investment, and the challenges which specialty coffee producers face gives them key insight into how they can define a procurement strategy that incentivizes farmers to maintain their focus on quality,” she explains.
Jessenia adds that producers can also benefit from this. Feedback on the quality of their coffee allows them to pinpoint areas where they can improve farming practices, for instance.
“This information provides producers with innovative ideas to implement on their farms, encourages them to keep improving coffee quality, and motivates them to be more resilient and to overcome the changing conditions that affect coffee production,” she tells me.
Adding Value to the Coffee Supply Chain
In simple terms, creating strong relationships between specialty coffee producers and suppliers can benefit the entire supply chain by improving both coffee quality and productivity.
Additionally, Jessenia says using technology to collect, monitor, and share data from both producers and suppliers can also lead to more direct communication. This means that both parties can be better informed.
“When we share more information, better decisions can be made at every level of the supply chain to better allocate resources and adapt business strategies to foster resilient interactions between different stakeholders,” she tells me.
One example of this technology, Jessenia explains, is Mercon Specialty’s fully digitalised LIFT platform, which first launched in 2014.
She tells me the LIFT platform – which provides coffee farmers with opportunities for training, as well as access to resources and agricultural support – is based on three key pillars:
- Sustainable growth
- Social development
“Over the years, our LIFT platform has shown it’s possible to support producers in changing their farming practices to restore local ecosystems, as well as improve their own and their communities’ social conditions,” she adds. “At the same time, we can improve or maintain the economic sustainability of their coffee farms.”
Giacomo tells me the LIFT platform is integrated with Mercon’s values and sustainable business practices.
“The aim of the LIFT platform is embedded into our strategy,” he says. “Our purpose is to create a better coffee industry, which means building profitable, sustainable, and integrated value chains from producer to consumer.”
In terms of leading to measure results, Giacomo explains that Mercon also developed the LIFT Scorecard. This is used to evaluate producers’ performance against each of the three pillars. Moreover, all data is shared via an integrated app.
What are the advantages of sustainable producer-trader relationships?
Producers and green coffee suppliers clearly benefit from close, long-term working relationships. But as with any partnership in the coffee supply chain, in the right circumstances, this can also benefit actors across the rest of the supply chain.
“Closer and stronger working relationships between roasters and green coffee suppliers are also very important to align with the long-term goals of producers, too,” Giacomo explains. “We can’t have a fully sustainable supply chain without a shared focus and perspective.”
In the long term, a shared vision between producers and traders can help improve coffee quality.
This communication clearly benefits other supply chain actors. This includes roasters and consumers, both of whom are increasingly prioritizing transparency, traceability, and sustainability more and more. In turn, consumers can be sure that the coffee they buy from a specific roaster is always high-quality, as well as being sourced ethically.
Better Access to Information
With relationship coffee, better access to data usually encourages more participation. This means information is more accessible to a wider range of supply chain stakeholders. In theory, a more collaborative approach to data collection across the value chain means all stakeholders are better informed.
Moreover, better access to more detailed information about a specific coffee can help bridge the gap between producers and consumers in a more impactful way. For example, roasters are able to know more detailed information about a specific coffee, such as harvest, origin, variety, and processing method. In turn, they can provide their customers with more comprehensive and transparent information, and thereby improve their overall experience.
When it comes to coffee farmers, Jessenia explains that improving information availability helps with all manner of things. These can range from financial management and negotiation to learning about farming techniques, improving market access, and opening up research possibilities.
Keeping Specialty Coffee Moving Forward
With concerns about a sustainable future for the coffee industry continuing to grow, supply chain stakeholders ultimately need to work more closely with each other to combat these issues.
“Relationships between producers and green coffee suppliers are key to ensuring a continuous and growing supply of high-quality coffee, which is the foundation of the specialty coffee industry,” Jessenia explains. “More efficient communication – as well as facilitating better access to resources – ensures that stakeholders are more aware of each others’ needs.”
Furthermore, the exchange of knowledge between supply chain actors can lead to more innovation. This is especially apparent when it comes to harvesting techniques and processing methods. As a result, producers can diversify their offerings and potentially earn higher prices.
Providing producers with more formal training opportunities is one of the most effective ways to improve coffee quality and yields.
Giacomo explains the Mercon LIFT platform provides coffee producers with both holistic and technical training sessions and farm visits covering a number of topics. These include plant nutrition, pest and water management, and financial literacy.
In line with this, he adds that when green coffee suppliers are able to invest in producers, it’s more likely that these farming practices can be improved.
“Value chain relationships which are oriented towards a long-term goal, for both producers and roasters, are fundamental to pushing specialty coffee forward, as well as continuing to drive the growth of the sector,” Giacomo concludes.
Direct relationships between roasters and producers have been a point of discussion for some time now. However, at the same time, we’ve also seen green coffee suppliers work with farmers in new and different ways.
In today’s ever-changing coffee industry, sustainable relationships between producers and anyone who buys from them will increasingly be beneficial – as this stability can pave the way for a more sustainable future and provide a foundation for future collaboration.
And by establishing stronger connections across the entire supply chain, we can create a more equitable and informed coffee industry – for everyone.
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Please note: Mercon Specialty is a sponsor of Perfect Daily Grind.