How Should a Coffee Roaster Buy Green Coffee?

I am the coffee buyer for the company I work for. I was recently in the process of planning coffees for our 2022/2023 needs, and I had to contract about 250 bags of coffee. At a cost estimate of $3.70/lb, it was my task to decide which supply chain(s) I should invest about $140,000 of my company’s money into. In the global coffee trade, this is pennies. But despite this, I believe that as coffee buyers, we are responsible for putting our money into supply chains and companies that are actively working to create a better and more equitable coffee industry.

(The question of should we pay more than my $3.70/lb estimate is a very important aspect to this conversation, but to simplify the scope of this post and keep things as concise as possible, I do not significantly explore this question here. While I briefly touch on price discovery and 'fair' prices, the consideration of how much roasters can and should pay for coffee deserves its own post - something I hope to explore more soon.)

In order to make the best decision possible (I have only been a coffee buyer for about one year), I reached out to several friends who work various roles in the industry including account managers at importing companies, roastery and cafe owners, authors, and fellow coffee buyers. Each person I spoke to had some great advice, and I think that their experience and insights have the potential to help many coffee buyers think through their buying decisions, as well as make the industry better as a whole. The goal of this post is to share my takeaways from these conversations, with the hope that these insights can help you with your coffee buying decisions as they helped me.

I do not mention any individual’s or company’s names in this post. As I make some strong, opinionated claims here, I acknowledge that I am still learning and thinking through all the moving pieces. I do not want to give the impression that my views and opinions represent any of the views of the company I work for or those I spoke to. Even without names attributed, I believe that these ideas and perspectives carry a lot of meaning.

I think it's important to keep in mind that while there are many things that can (and should) be improved in the archaic system that is the global coffee trade, simply buying coffee is unlikely to have a significant, lasting effect. I am not writing this to show that I am a ‘good’ person or a ‘good’ coffee buyer, and I am by no means saving anyone with my decisions for how I choose to spend the money of the company I work for. While I do believe that the money spent via coffee buying can help in some ways, I also believe that this is just the bare minimum, and if we really want to make a difference, further action is required. Exactly what this further action looks like is another (complex) topic that I hope to research more about and write about in the future.

Here is a little background about my opinions and perspective as I entered this coffee buying rabbit hole:

Based on my research on the history of coffee, I have grown to generally distrust large multinational corporations. A major theme in coffee’s history is power imbalances. To begin, in many producing countries, coffee cultivation has its roots in slavery and colonialism. While we may not explicitly see slavery or colonialism today, these roots remain the foundation on which the system was built. Furthermore, whether intentionally or not, another big theme has been (and continues to be) large, multinational corporations based in the global north getting bigger and more powerful, oftentimes with the result of disempowering smallholder producers. The power imbalances between these large corporations (with their access to capital, resources and information) and smallholder producers (with significantly less access to these resources) helps set the stage for an unfair supply chain in which larger actors have more power to call the shots, oftentimes leaving smallholder producers vulnerable to whatever they and the market decides for them.

I acknowledge that these are some big brush strokes. Below is a short list of resources which have been integral in shaping my perspective. I highly recommend checking them out. Again, none of the claims or views expressed in this post are intended to speak for any of these people.

• “Ask Me About Cost of Production Project” - Junior’s Roasted Coffee (https://juniorsroastedcoffee.com/pages/ask-me-about-cost-of-production)

• “Grounds for Agreement” - John M. Talbot

• “From Modern Production to Imagined Primitivism” - Paige West

• The Specialty Coffee Transaction Guide (https://www.transactionguide.coffee)

• “Cheap Coffee” - Karl Weinhold (https://www.roastmagazine.com/cheapcoffee/)

• “Coffeeland” - Augustine Sedgewick

• “Quality versus solidarity: Third wave coffee and cooperative values among smallholding Maya farmers in Guatemala” - Edward F. Fischer, Bart Victor & Linda Asturias de Barrios

• Next on my list: "The Coffee Paradox" - Benoit Daviron & Stefano Ponte

Equipped with this perspective of the supply chain, and after learning that one of the ‘specialty’ importers I have been buying through is partially owned by a multinational corporation in operation since 1849, here are a couple questions I found myself asking:

1. If these large multinational corporations offer beneficial services to producers today via agricultural extension services, accessible financing, paying fair prices in some cases, etc, should I buy coffee through them? On one hand, my purchases are in a way supporting these apparently beneficial services, but on the other hand, does the good work these corporations do today justify the harm done and shady role they may have played in the past?

2. There are a handful of ‘specialty’ companies (importers, exporters, etc.) that work with a large multinational corporation in some way or another. They may be owned in some capacity, or they may work with them to utilize the cheaper financing and efficient logistics that multinationals can offer. If these specialty companies are doing good work for the supply chain, should I buy coffee through them despite the fact that some of that money finds its way back to a multinational corporation?

Maybe I am being too suspicious of multinational corporations, but either way, these seemed like important questions to ask. So, I asked around for some advice, and here’s what I got:

Previous coffee buyer:

Simply put, take a look at the services and work that sourcing companies are doing now and in the past, and ask yourself if that is something you want to invest money into.

Coffee buyer and supply chain transparency advocate:

Supply chains with zero involvement with multinationals can be hard to find. With their infrastructure, capital and access to information, they offer efficient supply chains that other players can benefit from tapping into. Also, creating a list of your priorities and values for sourcing green coffee can be helpful when making your buying decisions. This list can be based on your own personal values as well as those of the company you are buying coffee for.

Account manager at importing company:

Things may improve if roasters stop shopping around so much, and instead, buy from the same producer or producer group year after year. Furthermore, consider how your buying decisions might affect certain employees throughout the supply chain. If a multinational owns an exporting company in Colombia which employs primarily locals and pays them good wages, how might your coffee buying decisions affect these individuals?

(Joey’s additional thoughts: On a similar note, how would my purchasing decisions affect my account rep if they get paid commission based on my coffee buying?)

Account manager at importer/exporter:

There are several questions that you can ask your importer about price transparency and price discovery. These answers, and also the importer’s willingness (or avoidance) in answering these questions can give you a feel for how transparent and/or equitable the supply chain is. Do producers have a say in how much they get paid for their coffee? Does your importer know the FOB and/or Farm Gate price? Are there quality based premiums that are sent back to the farmers? It’s important to be respectful when asking your account rep these questions, as they may not have access to these answers themselves.

Author:

Each coffee can have its own unique supply chain, with varying levels of transparency, even though it may come through the same importer or exporter. So, there is room here to seek out coffees/supply chains that check your boxes, despite the involvement of a multinational corporation. Focus on verifiable facts such as the actual Farm Gate price, the price discovery method, and the terms of farmer sale (how much of a say does the farmer have in setting these terms?) Asking your account rep for these details is a good ‘filter’. If you get the info, great. But if your account rep does not have access to this info, or if they are hesitant to provide it to you, then that can be a red flag, indicating that this particular supply chain may not be the most equitable for the farmer. Keep in mind that whether or not your account rep has access to this info, or is willing to share this info, odds are they are still good people who want to do the right thing. Be respectful about how your values may differ from theirs.

Coffee buyer and roastery owner:

While you may not be able to confirm exactly what ‘good’ or ‘bad’ work an importer or big player does or has done, you can be more sure of the good work that other companies are doing, and this alone may be a good reason to consider moving on to a different supplier/supply chain. Also, if possible, buying a larger percent of a particular farm’s harvest is a good way to make a difference.

Each person brings up some really helpful considerations and approaches. Here's what stood out to me the most:

• Create a list of your values and priorities to help guide your coffee buying.

• Do your best to seek out supply chains that do not have a shady past and that do good work for smallholder producers (however you define ‘shady past’ and ‘good work’).

• Seek out transparent supply chains through importers and account reps that you trust, who have access to, and are willing to share verifiable facts about their supply chains.

My personal takeaways (once again, not the views of the company I work for or those I quoted above):

With all of these considerations in mind, I remain inclined to distrust large multinational corporations, but must be realistic and acknowledge their role in the global coffee trade today. The amount of involvement of a multinational corporation can vary in each particular supply chain, and in many cases, without their help with financing inventory, arranging export and/or import, and other steps which benefit from volume of scale, many specialty players who are actively working to improve the industry may struggle to operate. I think it comes down to doing the best you can, and maybe even choosing the lesser evil.

At some point down this rabbit hole, I began to wonder, I’m looking for supply chain transparency, but who is it even for? Is it for me, so I can pat myself on the back knowing that I am doing the best I can? Probably a little bit, yes. I think transparency brings many benefits, but I think one of the big ones is accountability. Transparency in a supply chain opens the door for the accountability of the companies involved, and in this way can be some movement towards making things better and more equitable.