Season 2: Episode 2. Understand all of the PArticipants in the Supply Chain

Understand all of the Participants in the Supply Chain
As a coffee supply chain manager, it’s important to understand where your coffee comes from and who is handling it along the entire length of the supply chain. There are major differences between the way that coffee is processed and handled between coffee producing counties. Knowing exactly what happens to the coffee you buy is a key part of identifying risks to supply and quality and pinpointing quality issues when they arise. 

On a coffee origin trip, you should work as hard as possible to understand the path that your coffee takes from the farm or farms where it is grown all the way to the point of export. 

In the specialty coffee industry, we sometimes demonize the “middle men” in the supply chain. While there are certainly many unscrupulous intermediaries in the coffee industry, there are also many value-adding steps where your coffee may change hands. In this episode of The Newsletter, we’ll look at steps coffee will take in every supply chain. Understanding these parts of your supply chain is very important if you want to have direct and sustainable long-term coffee buying relationships. 

Who is the producer? 
It’s important to understand who is growing the coffee that you’re buying. Beyond giving credit to the producer on the bag, you’ll want to know who is growing the coffee so that you can communicate with them and make sure that they are getting paid the right amount. Many sustainability challenges in coffee are related to the actual agriculture of coffee, so understanding who is doing the growing is important.  

Sometimes it’s very simple to know who the producer is, but other times it can be less clear who is actually growing the coffee. In different parts of the world, you’ll find very different looking supply chains, and coffee doesn’t always come from just one individual producer. All of the following are examples of what different coffee “producers” in a traceable specialty coffee supply chain can look like: 

• A large single estate farm
  • One producer or family may have a very large farm, or even a network of farms. Estate farmers may produce many lots and sell to many different buyers. The coffee you buy might be a tiny percentage of the total production.
• A small holder farmer
  • A farmer or family that produces coffee on a small farm (think 2-20 hectares).
    The coffee that you buy may be a very significant part or even all of the producer’s production. 
• An organized group of producers or cooperative
  • A group of farmers or a cooperative might combine their coffee to make lots. Here, you can think of the producer as the producer group or the community that comes together to create the lot that you’re buying. 
• A washing station that combines the production of many farmers
  • Sometimes, coffee producers have very small farms or aren’t growing coffee as their primary source of income. They may sell a relatively small amount of coffee to a centralized washing station who will process the coffee and divide it into lots. The coffee that you’re buying may be coming from many, many producers! 

Who is post-harvest processing the coffee? 
In many places, it’s common for coffee producers to do the post-harvest processing on their own coffee, and then sell the coffee as dried parchment. However, in many places, this is not how it works! Sometimes coffee is sold immediately as cherry, or even sometimes as wet parchment. Then the post-harvest processing is done by someone other than the producer. 

It’s very important to understand who is doing the post-harvest processing on your coffee! The processing has a huge impact on the flavor of the coffee, and is the most likely place for defects to occur in the coffee that you’re buying. 


Where is the Coffee Dry Milled? 
All coffee needs to pass through a dry mill to be hulled, sorted, and prepared for export. Some dry mills are brand new and have excellent equipment that can very accurately sort coffee by size and density and remove defects and foreign objects. There are new optical sorters that use high speed cameras to look at every single coffee bean and use artificial intelligence to identify green coffee defects. Other dry mills have much older equipment that is less precise. Some dry mills are huge and others are tiny. Some dry mills are in hot and humid environments, and some are in cooler, higher elevation environments. Often, as a buyer, you won’t have control over what dry mill the coffee that you buy passes through, but understanding the limitations or potential risks of a particular dry mill is very helpful information. 

As a coffee buyer I have personally managed coffee supply chains with state of the art dry mills that have tens of millions of dollars of equipment. I have also sourced coffee from dry mills that are running equipment from the 60s because they are so remote that it’s impossible to get spare parts in a hurry. I’ve been to dry mills at 2000 MASL and dry mills that are so hot and humid that it’s hard to stand outside. 

The dry mill is an important part of the supply chain for coffee quality. At the dry mill, defects will get sorted out and the coffee will be cupped and evaluated. Understanding this link of the supply chain is important for a coffee buyer. 

Where does the coffee ship out of? 
Understanding the point of export can be useful information. Some ports (I’m looking at you Santos) get backed up during certain times of the year. In other ports, it can be difficult to get 20 foot containers for exporting coffee, which can cause delays. Make sure you know where the coffee ships out of, and if there are any known issues with the particular point of export for the coffee that you’re buying. 

Who is the exporter? 
Every shipment of coffee has an exporter of record for recordkeeping and legal reasons. Depending on your supply chain, the exporter may be the producer themself, the cooperative, or it may be another business entirely. It’s always worth knowing who the exporter is, as they’re handling the coffee and are an important part of the supply chain. 

Who is the importer? 
You probably already know who the importer of your coffee is, as they’re usually the company that’s actually selling you the coffee. As a coffee buyer, especially if you’re interested in developing and maintaining long-term buying relationships, your importers will be very important to your business. In addition to actually importing the coffee, the importer will usually handle almost all of the logistics for you as well as financing the coffee until you take delivery of it. The importer will usually also handle pre-ship samples and approvals. In a good buying relationship, your importer will be an important resource and very important to the success of your buying relationships.

Summary
When you’re trying to establish and maintain long-term buying relationships, remember that it’s not just you and the producer! There are many actors in the supply chain. Ask questions, find out what’s happening, and get to know everyone who has a hand in the production and export of the coffee that you’re sourcing. Not all “middle men” are bad guys! Your coffee is the sum of the efforts of all of the people in your supply chain, get to know them!