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This is the fifth article in a series about traveling to origin as a green coffee buyer. In this episode I am going to share my favorite questions to ask when you’re on a coffee farm.
If you’ve ever been on an origin trip, you have probably had this experience: You’re on a farm visit at the end of a long day. After looking at coffee plants and milling equipment everyone stands around and someone asks, “have any questions?” You have come all of this way, so what questions should you be asking? If you’re not prepared, it can be hard to come up with a good question, especially with a travel weary brain. But, asking the right questions can unlock a lot of interesting information and even strengthen your relationship with the producer that you’re talking to. Having been in this situation many times, here is a list of my favorite questions to ask when you’re on a coffee farm:
Now you’ll be armed with some questions to ask next time you’re doing a farm visit and drawing a blank! If you have a favorite question to ask when you’re on a farm, send me a message and let me know what it is!
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| efficiency.coffee will be at SCA Expo 2024 I am very excited to be giving a lecture “Inventory Management Fundamentals for Green Coffee Buyers” at the Specialty Coffee Association Expo in Chicago in April 2024. Hope to see you in Chicago! Thanks for reading! Thank you for reading The Newsletter from efficiency.coffee. Please share these resources with anyone who you think will benefit from it. If you have any feedback about this edition of The Newsletter, you know someone that I should interview, or you’d like to suggest a topic for a future edition, please email me at [email protected]. In addition to being a resource hub for green coffee buyers, efficiency.coffee is a consulting and freelance green coffee buying business. You can hire me to help you build or re-organize a green coffee purchasing program or as a part-time, freelance Green Buyer or Supply Chain Analyst. Reach out to [email protected] to inquire about working together. | |
Welcome back to The Newsletter and happy holidays from Efficiency.coffee!
I am so grateful to everyone who is reading my newsletter and supporting my mission to make the industry more efficient and sustainable. Thank you all!
This month we’re going to explore how to factor seasonality into green coffee forecasting. Accounting for seasonality is important to make sure that our company doesn’t run out key coffees at the busiest times of the year.
What is Seasonality?
Most coffee roasting businesses experience seasonality, meaning that there are some times of the year when sales are stronger than others, or when our product mix changes. We want to make sure that we think about seasonality when we’re managing our green coffee inventory to make sure that we don’t underestimate how much coffee we need as we transition into higher volume times of the year.
Common Seasonality Examples for Coffee Roasters:
Here are some common areas where coffee roasters experience seasonality:
How to Watch for Seasonality in Our Business?
The best way to monitor seasonality in our business is to track how much of each coffee we are roasting each week. Once we have many months or years of data, we can look back at how much of each green coffee product we are roasting throughout the year. If we don’t yet have historical data, we can estimate where we might see seasonality by talking to our production team or our cafe staff about what the busiest times of year are.
How to Add Seasonality to Our Forecasts?
Adding seasonality to our forecasts is simple. Let’s say that it is the beginning of December and we’re anticipating higher sales and therefore a higher volume of roasting through the end of the year. We create a projection for each product of how much more coffee we think we will sell during this time period based on past data or our best guess. Then, we add that amount of coffee to our baseline projection. So, if in October and November we roasted 1,000 lbs of Brazil per week for our espresso blend and we think that demand for that product will increase by 20%, we will forecast 1,200 pounds of Brazil per week for the month of December.
Then, in January we can look back at our numbers to see how good our forecast was, and we’ll be better able to forecast accurately next year.
Seasonality Summary
Many coffee roasters experience a lot of seasonality in their businesses and it’s important to consider seasonality in your green coffee forecasts. Predicting seasonality can be challenging, but the more we think about and track seasonality as green coffee buyers, the more accurate our forecasts will be and the more likely we are to get the projection right!
Happy Holidays and thanks for reading! The Newsletter will be back in January with a discussion of Safety Stock. Stay tuned to learn about how to set safety stock levels and make sure you never run out of important green coffee components!
I am so grateful to everyone who is reading my newsletter and supporting my mission to make the industry more efficient and sustainable. Thank you all!
This month we’re going to explore how to factor seasonality into green coffee forecasting. Accounting for seasonality is important to make sure that our company doesn’t run out key coffees at the busiest times of the year.
What is Seasonality?
Most coffee roasting businesses experience seasonality, meaning that there are some times of the year when sales are stronger than others, or when our product mix changes. We want to make sure that we think about seasonality when we’re managing our green coffee inventory to make sure that we don’t underestimate how much coffee we need as we transition into higher volume times of the year.
Common Seasonality Examples for Coffee Roasters:
Here are some common areas where coffee roasters experience seasonality:
- Many coffee roasters experience very high cold brew demand in the warmer months, and much lower demand in colder months
- Coffee roasters near a colleges and universities are likely to see much higher demand when classes are in session
- Coffee sales for some roasters in temperate climates increase significantly in the fall when temperatures drop
- Sales of retail bags of coffee increase for many roasters during the winter holiday gift-giving season
How to Watch for Seasonality in Our Business?
The best way to monitor seasonality in our business is to track how much of each coffee we are roasting each week. Once we have many months or years of data, we can look back at how much of each green coffee product we are roasting throughout the year. If we don’t yet have historical data, we can estimate where we might see seasonality by talking to our production team or our cafe staff about what the busiest times of year are.
How to Add Seasonality to Our Forecasts?
Adding seasonality to our forecasts is simple. Let’s say that it is the beginning of December and we’re anticipating higher sales and therefore a higher volume of roasting through the end of the year. We create a projection for each product of how much more coffee we think we will sell during this time period based on past data or our best guess. Then, we add that amount of coffee to our baseline projection. So, if in October and November we roasted 1,000 lbs of Brazil per week for our espresso blend and we think that demand for that product will increase by 20%, we will forecast 1,200 pounds of Brazil per week for the month of December.
Then, in January we can look back at our numbers to see how good our forecast was, and we’ll be better able to forecast accurately next year.
Seasonality Summary
Many coffee roasters experience a lot of seasonality in their businesses and it’s important to consider seasonality in your green coffee forecasts. Predicting seasonality can be challenging, but the more we think about and track seasonality as green coffee buyers, the more accurate our forecasts will be and the more likely we are to get the projection right!
Happy Holidays and thanks for reading! The Newsletter will be back in January with a discussion of Safety Stock. Stay tuned to learn about how to set safety stock levels and make sure you never run out of important green coffee components!
| Thanks for reading! Thank you for reading The Newsletter from efficiency.coffee. Please share these resources with anyone who you think will benefit from it. If you have any feedback about this edition of The Newsletter, you know someone that I should interview, or you’d like to suggest a topic for a future edition, please email me at [email protected]. In addition to being a resource hub for green coffee buyers, efficiency.coffee is a consulting and freelance green coffee buying business. You can hire me to help you build or re-organize a green coffee purchasing program or as a part-time, freelance green buyer! Reach out to [email protected] to inquire about working together. |  |
Demand Forecasting for Green Coffee Buyers
What is Demand Forecasting?
Estimating how much coffee our company will use in the future is an essential activity for all green coffee buyers. Having accurate demand forecasts lets our company buy the right amount of coffee, keeps us from running out of important green coffee components, and lets us schedule purchases and releases with sufficient lead time.
In this article, we’ll look at calculating the following core concepts:
Expected Weekly Coffee Use (lbs)
Weeks of Inventory
Inventory on Hand
Using these core concepts, we can create a simple system for forecasting demand that will help us manage green coffee inventory and prevent common and costly mistakes.
Expected Weekly Coffee Use (lbs):
Accurately predicting how much of each green coffee component our company will use in the future is essential for managing the inventory of green coffee at the roastery. Here we’re going to explore how to generate a projection for Expected Weekly Coffee Use (lbs) for each of the coffees that we have in our inventory.
To make these projections, we calculate how much of each coffee we have been using on average during a certain period of time, and then we use those values to project how much coffee we are likely to need in the future.
The simplest way to find this value is to keep a spreadsheet that records how much of each coffee we use every week. We can get the data for how much of each coffee we’re using each week by pulling a cropster production report. If we’re not using cropster, then we can get this data by taking a physical count of our inventory at the end of each week, and subtracting our inventory at the end of the week from our inventory at the end of the previous week.
Now, to create our projection for Expected Weekly Coffee Use (lbs), we simply have the spreadsheet calculate how much of each coffee we’ve been using on average each week. Below, the spreadsheet is using the average of the last 8 weeks of coffee use. 6-8 weeks is a good starting place. We could use fewer weeks if we want the calculation to be more sensitive to changes in demand, or more weeks if we want it to be less sensitive.
Below, the Expected Weekly Coffee Use (lbs) is shown in row 14.
Estimating how much coffee our company will use in the future is an essential activity for all green coffee buyers. Having accurate demand forecasts lets our company buy the right amount of coffee, keeps us from running out of important green coffee components, and lets us schedule purchases and releases with sufficient lead time.
In this article, we’ll look at calculating the following core concepts:
Expected Weekly Coffee Use (lbs)
Weeks of Inventory
Inventory on Hand
Using these core concepts, we can create a simple system for forecasting demand that will help us manage green coffee inventory and prevent common and costly mistakes.
Expected Weekly Coffee Use (lbs):
Accurately predicting how much of each green coffee component our company will use in the future is essential for managing the inventory of green coffee at the roastery. Here we’re going to explore how to generate a projection for Expected Weekly Coffee Use (lbs) for each of the coffees that we have in our inventory.
To make these projections, we calculate how much of each coffee we have been using on average during a certain period of time, and then we use those values to project how much coffee we are likely to need in the future.
The simplest way to find this value is to keep a spreadsheet that records how much of each coffee we use every week. We can get the data for how much of each coffee we’re using each week by pulling a cropster production report. If we’re not using cropster, then we can get this data by taking a physical count of our inventory at the end of each week, and subtracting our inventory at the end of the week from our inventory at the end of the previous week.
Now, to create our projection for Expected Weekly Coffee Use (lbs), we simply have the spreadsheet calculate how much of each coffee we’ve been using on average each week. Below, the spreadsheet is using the average of the last 8 weeks of coffee use. 6-8 weeks is a good starting place. We could use fewer weeks if we want the calculation to be more sensitive to changes in demand, or more weeks if we want it to be less sensitive.
Below, the Expected Weekly Coffee Use (lbs) is shown in row 14.
This spreadsheet template for coffee roaster demand projection is available for free on www.efficiency.coffee.
Important note: When recording data about how much coffee you are roasting each week to make projections about the future, it’s a good practice to always use only green coffee weights. We do not need to consider roasted coffee yield when using this simple method for green coffee inventory management.
Weeks of Inventory On-Hand:
Once we have our Expected Weekly Coffee Use (lbs), it’s also useful to calculate Weeks of Inventory for each coffee. Weeks of Inventory is the amount of each coffee that we currently have in the warehouse, expressed in weeks. It shows us how many weeks of each coffee we have until we run out of each coffee. Having this value makes it easy for us to see how much time we have before we need to reorder each of our green coffee components.
We first need to know our Inventory on Hand for each of our green coffee components. This value is simply the amount of a coffee that we have at the roastery in lbs.
We can now calculate Weeks of Inventory by dividing our Inventory on Hand by Expected Weekly Coffee Use (lbs).
The spreadsheet below from www.efficiency.coffee shows Weeks of Inventory in column E. The value is calculated as Inventory on Hand (shown in column D) / Expected Weekly Coffee Use (lbs).
Important note: When recording data about how much coffee you are roasting each week to make projections about the future, it’s a good practice to always use only green coffee weights. We do not need to consider roasted coffee yield when using this simple method for green coffee inventory management.
Weeks of Inventory On-Hand:
Once we have our Expected Weekly Coffee Use (lbs), it’s also useful to calculate Weeks of Inventory for each coffee. Weeks of Inventory is the amount of each coffee that we currently have in the warehouse, expressed in weeks. It shows us how many weeks of each coffee we have until we run out of each coffee. Having this value makes it easy for us to see how much time we have before we need to reorder each of our green coffee components.
We first need to know our Inventory on Hand for each of our green coffee components. This value is simply the amount of a coffee that we have at the roastery in lbs.
We can now calculate Weeks of Inventory by dividing our Inventory on Hand by Expected Weekly Coffee Use (lbs).
The spreadsheet below from www.efficiency.coffee shows Weeks of Inventory in column E. The value is calculated as Inventory on Hand (shown in column D) / Expected Weekly Coffee Use (lbs).
| Summary Now that we’ve learned how to make demand projections and see how much coffee we have on hand in weeks, we’re well equipped to manage our inventory and make accurate purchasing decisions. In the next edition of Coffee Supply Chain Resources, we’ll look at seasonality and how to factor it into your demand forecasting. Thanks for reading! Thank you for reading Coffee Supply Chain Resources from efficiency.coffee. Please share these resources with anyone who you think will benefit from it. If you have any feedback about this edition of Coffee Supply Resources, if you know someone that I should interview, or you’d like to suggest a topic for a future edition, please email me at [email protected]. In addition to being a resource hub for green coffee buyers, efficiency.coffee is a consulting and freelance green coffee buying business. You can hire me to help you build or re-organize a green coffee purchasing program or as a part-time, freelance green buyer! Reach out to [email protected] to inquire about working together. |  |