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November 6, 2017

Maintaining & Promoting Relationships in the Coffee Industry

“Third Wave Coffee” is a term often thrown around to articulate the current state of Specialty Coffee in regards to its development and growth. It is understood that this term relates to the industry’s growing focus on origin, appreciating the nuances and educating customers about coffee regions of the world.

Throughout this wave, the words “direct trade,” “direct partnership,” “direct relationship” became more and more prolific. As a result, the pursuit of and importance placed within this area began to grow.
The fairytale image was created of a coffee roaster packing a bag, flying to origin, cupping coffees, throwing a sack of green beans on his back, handing the farmer cash (including a great premium for the high quality), and then returning home to roast and introduce their clientele to this new, “direct trade” coffee. While the image of this is sensationalized, the reality is for the vast majority of coffee companies across the globe (and farmers for that matter!) this situation is unachievable. But, the industry as a whole has created the expectation whereby unless one is fully embracing and pursuing this fictitious dream, then it’s not truly worthy or valuable. The reality is most farmers are not even capable of exporting on their own and most buyers aren’t able to facilitate and navigate the complex systems of importing on their own. There are vital members of the supply chain that are crucial to its overall success and this cannot be forgotten. But is there another way?
I believe the coffee industry is making a turn into the fourth wave of coffee that is enwrapped in a greater understanding of the entire coffee supply chain and how one ethically, responsibly, and sustainably participates in direct trade. As the coffee industry continues to walk in this direction, we would like to offer some advice and guidance to companies as they establish and seek to work within this model alongside coffee farmers all over the world.

Photo credit: Bryon Lippincott

Commitment to Long-Term Partnership
In 2012, our company began working with Saxon Wright of Pablo & Rusty’s Coffee Roasters in Sydney, Australia. Specialty Coffee from Yunnan, though in its infancy, was on the rise, and P&R saw immense potential. After flying over, visiting the farms, and sitting down to talk with Agricultural Bureau Officials within the region, P&R made a commitment to see the expansion and growth of Yunnan Coffee in the Australian Specialty Coffee market. Because of our companies’ involvement with on-the-ground quality control, we talked through their requirements and specifications. From the very beginning Saxon Wright, CEO of P&R, made it clear that he was committed long-term. He offered many suggestions to improve dry milling, provide greater attention to maintenance of coffee trees, and shared a variety of other ideas. But he was also very clear from the start that if those recommendations were followed, and for some reason the coffee was negatively impacted, he would still commit to buy the coffee. He wouldn’t bounce to the next “new thing.”

Wright was committed to relationships and long-term partnership to the extent that he proposed a long-term buying plan. Based on the cost of production plus a quality incentive, he set 3-year pricing contracts with farmers to provide stability, household budgeting, and a more long-term sustainable situation at the farm level.
This type of sustainable, direct trade is best facilitated when buyers and farmers are committed to long-term working together. This leads to the next important step:
Two-Way, Transparent Communication
After making some adjustments to our dry milling, we packed the first container and sent it on its way to P&R in Australia. After a few months, we received communication back from the roaster that some of the coffee had a diesel-type smell. We thought, “well, there’s the end of that relationship!” But because of their long-term commitment paired with the open communication, we were able to determine this was due to the low-quality burlap bags that are produced in between country and immediately made the transition to GrainPro inner bags. Our company then became the first company to begin exporting coffee from China in 60KG GrainPro bags. This was an exciting innovation to be a part of, and we’ve never had this problem again! (P&R also booked a full container that following season!).

Photo credit : Joshua Jagelman

But here’s the key: because of P&R’s open dialogue and exchange of information, not only are we better serving their needs, but our customers all over the world now benefit from this experience and education.
Over the last few years, we have continued this two-way dialogue where we share with P&R all about the farm, and they share with us their roasting notes, roast profiles, and other information that has equipped us even better to introduce this coffee to 6 different countries (and counting!).
Pursue Innovation with Humility
The fourth wave coffee movement will not only be immersed in sustainable direct trade, it will also be peppered with innovation and research. As farmers and buyers are communicating back and forth, inevitably obstacles and challenges arise that will require both parties to work together to find a mutually beneficial solution.
Roasters, Importers, and Brokers must position themselves in humility and approach the situation as co-laborers working together rather than a dictator making demands. The greatest innovations within coffee production in the next 10 years will come about when the entire supply chain comes together to dialogue and discuss how to improve.
The reduction of waste, application of new technologies, and expansion within the genetic pool of coffee will just be a few of the areas we will see great leaps and bounds going forward and for them to be truly effective, humility must reign supreme.

Photo Credit: Bryon Lippincott

What does this mean for you?
Instead of holding to the fairytale image discussed above, roasters, café owners, and people within the coffee industry can begin to be a part of the fourth wave of coffee beginning with asking questions. Whoever you’re buying coffee from, ask them about their sourcing model, how they work with farmers, how long have they been working with their current farms, and what are their long-term goals with the farmers. It’s difficult for many to travel to origin and even develop relationships with them, but we all can do our part to better understand the supply chain and the role each participant within it plays. The Fourth Wave of Coffee depends on it.

Sustainable Direct Trade:
The Fourth Wave of Coffee
Specialty Coffee has come such a long way from the early days of understanding coffee and the entire supply chain.
Ample stories and information have been published regarding the plight and struggles of the coffee farmer.
The Third Wave of Coffee has done so much to take the focus back to the place where your daily cup all begins, and we want to see this continue to expand and grow.
As this next wave of coffee begins, we all must remember the importance of investing and committing to long-term relationships at the farm, being active contributors to two-way dialogue, and walking forward in humility toward greater and better coffee. The Fourth Wave is swelling.
Surfs up!


BY Tim Heinze
Yunnan Coffee Traders






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