The Green Trade

A Retrospective on the Business of Moving Coffee

By Andi Trindle Mersch, Atlantic Specialty Coffee

“A short article covering 30 years of trading coffee in a world that has changed so much is challenging, to say the least!” noted one of my first mentors in the green coffee trade business, Janis Cutler, Vice President of Amcafe, NY, in her response to my request for input.

My own experience in green coffee trading goes back to late 1993 when I first started with Amcafe’s sister office at the time, West Coast Specialty Coffee. I reached out to Janis and a current colleague, Steve Colten at Atlantic USA – both of whom have another ten plus years of industry experience on me – to meet the challenge of encapsulating 30 years of changes in green coffee in relatively few words(1). I’m glad I asked for some second opinions. My first instinct (after mentioning substantial improvements in quality)(2) was to write almost exclusively about the impact of direct, traceable, and transparent business models – all activities I’m heavily involved in now that were assuredly not as substantial a piece of the green trade as recently as a decade ago, and certainly were not another 20 years before that. These newer trading models surely epitomize the most observable difference for the first and last hands holding physical green coffee – the farmers and roasters – and we’ll give them their due shortly. First, however, there’s really one word that comes to mind as the most influential factor driving change in green coffee trade over the years. Indeed, it’s responsible for everything possible in direct, traceable, and transparent business models. Ideas? I’m presuming in a Chronicle issue devoted to an industry-wide retrospective, every article will include it somewhere. Indeed, credit is needed where credit is due. So, accepting the redundancy and stating the obvious, I’ll say it: Technology.

Yes, technology and all of its children – Google, high-speed Internet, the iPad and iPhones, Skype, and GoToMeeting amongst many others – have been hugely impactful on coffee trading. As Colten states, “30 years ago having access to origin and a good network gave you a competitive advantage. Information was power [but] today everyone has access within reason to the same information.” For a green coffee importer, the principal competitive advantage of 30 years ago is simply not that relevant.
green2Technology and its efficiencies, which allow easier travel, cheaper and more reliable communication, instantaneous across the world connection, vast amounts of open source information and resources, and on and on, has made it possible for even the smallest volume roaster in a tiny town to reach out directly to the smallest production farmer on a tiny plot of land. Technology changed the coffee world as radically as it changed every individual’s world.

New Trade Models

It is due to the advances in technology that transparency, traceability, and direct business models have become possible. Traditionally, green coffee exporters and importers sold and bought coffee between each other and their information about these coffees remained their information to share or hoard. Most of the roasters at the receiving end had little to no opportunity to trace their beans back to the farm and, even more so, farmers had no opportunity to even guess what continent their beans may have reached, much less which roaster. Exporters and importers focusing on specialty quality coffee chose to share more information and create connection opportunity; but, nonetheless, they traditionally maintained the exclusive responsibility for sourcing and pricing, and controlled the dissemination of information as a part of their competitive advantage.

With technology’s reach, small and large farmers now communicate directly with small and large roasters all the time. Relative ease of travel, including improved transportation in third world countries, has made it possible for regular visits to farms, as well as for direct communications between the producers and end users of green coffee. These mechanisms for open communication led to the advent and rapid growth of the newer trade platforms. See the sidebar for my short version proposed of definitions of these transformational buying and selling practices. These advances in green trade have positively impacted the coffee business by forcing fairer pay and open information exchange, in turn leading to significant quality and infrastructure improvements and long-term relationship security. And, very notably, with committed and informed end buyers willing to pay up because they know where their money is going, the production and sale of micro and experimental lots has become possible and, furthermore, even final beverage consumers can connect themselves to farmers.

To be clear, these models aren’t without their risks, and some traders have embraced them, finding ways to add value within them, while others prefer to continue traditional trading practices. Thus far, there are still plenty of buyers and sellers for all trade models and most of us practice some of both. My prediction is the newer models will continue to grow regardless of some of the challenges they pose and some of the reluctance still present amongst traditionalists. I’ve witnessed exponential growth just in the last five years, even though those of us involved for longer are more vocal about the trials and tribulations, like roasters over-committing and not understanding their accountability in quality negotiations to name just a couple of many.

The critical piece I see missing for ultimate success and industry-wide transformation is global agreement on how these different models work and clarity on the risks and accountabilities associated. The risks can assuredly be mitigated through precise language and specifically with a new trade contract (3), but these need to be done sooner rather than later. I’ve seen many roasters and producers jump into these buying arrangements without fully understanding their responsibilities.

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Opportunity

Besides allowing for new open trading mechanisms, technology has created opportunity.  As Colten states, “so many coming into the industry [are] armed with much more knowledge than we had when first starting out. To get trained, you needed a mentor and many years sitting at their feet. Now the mentoring is still as important, but there are layers of additional info available and more importantly, people willing to share (i.e. associations like SCAA)”. Without doubt, the influence of SCAA, and other educational organizations around the world that publish open information, has grown exponentially over the last 30 years, and their impact on green trade can’t be minimized. Now, the Barista Guild, Roasters Guild, and World Coffee Events exist and create opportunities for everyone absolutely everywhere to learn and contribute to the growth of our industry. It’s truly amazing.

Of course, before we leave technology, I’d be remiss not to mention the downsides. As much as technology has provided opportunity for closer and more direct connection, it has simultaneously “limited real contact” (Colten). We rely a lot on impersonal, informal communication via email in particular and we sometimes lose the depth of our relationships and the clarity of our communications. Furthermore, while knowledge is powerful, experience and practice remain integral to long-term, sustainable success.

Other Notable Changes

Some other significant changes that Cutler quickly rattled off include “improved transportation, environmental issues, government agencies participation in the exporting of coffee from various countries (like Ethiopia, Kenya, Jamaica), U.S. government security/customs etc., the continued increase in origin countries who now drink more coffee every day, and the number of organizations certifying coffee.” All of these are impactful on a daily basis in green trade and most significantly so. Each could have a full article explaining their influences – positive and negative – on our business over recent decades. In the interest of space, we’ll leave them as noteworthy mentions.

Going Forward

A retrospective always leaves one (at least me) with a burning need to proclaim something about what’s next. I make no real predictions other than that the newer, more direct and open trading models will continue to grow, noting a hope for more looking before leaping. In terms of advice, I suggest we all ride the rapid waves of global changes with an open mind, taking full positive advantage of the possibilities. Please, though, embrace change while simultaneously fighting for the good traditions—the traditions where we connect our hearts, along with our minds, to our work.

1) A disclaimer: it’s impossible to cover or even mention all changes in a rapidly altering global environment, so please forgive any omissions. I made some judgment calls to include the most influential broad changes.

2) I don’t mean to trivialize the incredible advances in quality over recent years, but I don’t intend to spend time elaborating here. Without doubt, through efforts of SCAA, COE, CQI, and other organizations, as well as many individual producers, exporters, importers, and roasters, the average quality of green coffee has grown in recent decades and continues to improve. Experimentation in varietals, processing, packaging, and more continue to drive quality improvements, though always within the limitations of Mother Nature, each and every year.

3) The GCA and SCAA are currently in an active, if slow moving, collaboration to develop a joint contract to better protect transparent, traceable, and direct models.

 

Andi Trindle Mersch has a varied background within her career in the specialty coffee industry, which began behind the espresso bar in 1989 and, since then, includes cupping, training, consulting, green coffee trading, roast quality control, sales, writing, and marketing. Andi currently runs the Atlantic Specialty Coffee quality control lab and trades green coffee. Andi has served as a member of the SCAA Board of Directors and five years on the board of the International Women’s Coffee Alliance, including a term as President.

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