Direct Trade is not a sneaky way to source cheaper coffee via the bypassing of local AU brokers. Local brokers are a vital and critical element in our supply chain.
Our approach to Direct Trade is to pay exactly the same price as the locally available stock. How this will create opportunities at origin are beyond the scope of this article and we certainly do not promote or quantify any social advantages or benefits derived from our Direct Trade program.
For us at Carlini Coffee Company, we care about the products we source and coffee supply is notoriously difficult to purchase year round.
We spend many hours each week planning and managing our green bean stocks – it’s not an easy task and never a week passes without an issue somewhere in the green bean supply chain. Running low on this or that, can’t get any for a couple of weeks/months, finding alternatives, arranging bags, roasting, cupping, etc. – it’s at least a 3 week cycle to chop and change beans around – something that is a major distraction and challenge to our business.
Whilst the wine industry embraces diversity of each vintage, when it comes to coffee the end customer has strict demand and expectation of consistency – you simply cannot easily mess around with a coffee drinker’s palate.
Despite forward contracting months ahead, it will not guarantee that we receive the coffee matching our expectations. Similarly, if we like a particular lot and attempt to purchase more it’s often not available. In some cases the forward contract is a basic implement to arrange stock of similar or compatible grade by the local broker. It does not always guarantee supply of a specific lot – the only way to do this is to buy up big warehouses full of green beans.
Brokers have their own drivers and strategies for sourcing and sometimes this is in conflict with the specialty roaster. As an example, the coffee market has experienced price volatility since May 2010. Brokers may act conservatively and arrange only small lots of certain bean types. For roasters, this creates the headaches of never fully understanding the capacity of brokers or being able to transparently see what the brokers have forward ordered.
Bear in mind, coffee can take 8 to 9 weeks from order to arrival – this can be a painfully long duration for roasters.
To address complex green bean sourcing issues, we have undertaken an initiative to source a small portion of our premium green coffee from Direct Trade. This allows us to provide addition controls over the security of green bean quality. Similar initiatives are underway by other Specialty Coffee providers in Australia and around the world.
For other coffee roasters, Direct Trade can mean a different thing – it could be their own alternative to major certification programs such as FAIRTRADE and RAINFOREST ALLIANCE or their primary social/ethical coffee program offering.
At mycuppa, we are not going to use any “smoke and mirrors” spin to convince you that Direct Trade is in any way superior to FAIRTRADE or RAINFOREST ALLIANCE. It’s simply not a debate we will engage on. The basic facts are Direct Trade is simply a complimentary program for mycuppa to have secure access to quality beans.
We continue to support FAIRTRADE and RAINFOREST ALLIANCE programs.