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May | June 2021


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FEATURE ARTICLE

BUY LESS TO DO MORECoffee Sourcing Through Partnership and Planning

By Ever Meister
Photos by Sam Miller


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AS WE START TO SEE A LIGHT AT the end of the tunnel of these “unprecedented times,” many coffee-roasting companies are thinking about the future again. The struggles of the past year-plus (survival, supply chain) and the momentum of social change all around us have catalyzed a period of reflection and revival that could lead to real progress and growth as an industry.

The realities facing smallholder coffee farmers, from rising costs and stagnant prices to environmental challenges, have come into sharp focus in recent years. Producers need income stability, a reliable marketplace, and opportunities to access the necessary tools to do business: credit, risk management and good buyers.

Now, many roasters are facing the same sorts of obstacles. Costs are rising while consumer demographics are changing, thanks in part to covid-19-related economic flip-flopping and operating restrictions. Roasters need price stability, reliable sources for coffee, and the ability to tell a great story in order to attract customers. Many are also seeking to make a real and lasting impact with their business—to give back to the coffee world in a sustainable way.

As it turns out, one of the sourcing strategies that seems to most benefit roasters in these areas also has the potential to create a scaffold for producers, especially during times when the retail and foodservice markets are still topsy-turvy: Buy more coffee from fewer producers.

In order for a smaller-sized roasting company to transition its inventory from “a little of this and a little of that” to one that focuses on strategic volume buying, it’s important to make a plan. Commitment, communication, conflict resolution and compromise are required—but creativity is key. For many of the roasters for whom this type of partnership is a valued part of their sourcing, it means making room for more coffees from individual growers and finding appropriate uses for those coffees.

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Pink Bourbon nearing full ripeness at Finca El Nogal.


Can you make a blend of two roast levels of the same coffee, rather than two different coffees? Can you offer something higher-end and more affordable from the same farm or association? How will you tell these coffees’ story?

To get an idea of what this type of buying looks like, I spoke with three roasters whose businesses have evolved to include a “buy more from fewer” sourcing model. All three went through the same mental gymnastics before switching to a partnership-focused strategy, asking themselves questions like:

  • What are my values, and how can my sourcing reflect those values?
  • What do my customers want? What prices are they willing and able to pay?
  • What volumes do I use annually, and how can I maximize my purchases financially as well as socially/ethically?
  • What mutual benefits (and what risks) can come from making long-term partnerships with growers?
  • How can I slowly and realistically evolve my sourcing model to avoid outsize risks?
  • Will my supply-chain partners support me in sourcing this way, and how can I be sure my business is protected in the event of some unforeseen issue?

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From left to right: Charlie Comnick (Duluth Coffee Company), Samuel Levar (Duluth Coffee Company), Favio Valenzuela (Finca Primavera), Eric Faust (Duluth Coffee Company).

When I called Duluth Coffee Company’s owner, Eric Faust, in northern Minnesota to tell him I was working on this article, he immediately said, “You are talking my language! The last five years has been all about developing our products to fit how we want to buy, and how we want to buy has been influenced by countless conversations and trips to origin.”

Faust explains that his first buying trip in 2015 (to a Colombia Best Cup cupping contest and auction) was also the moment that solidified a vision for him. “When I reflect back on what was the catalyst to changing our mindset about buying, I think of that auction. I remember there was a video of [Cafe Imports founder] Andrew Miller saying that the point of this auction was supposed to be the introduction between a roaster and a producer for a long-term relationship. So, I went in there and threw down some money on two nice coffees, and then after the auction I said, ‘What happens now?’—but there was no real process for that.”

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Two- year-old Pink Bourbon at Finca El Nogal.


The reason there wasn’t a set-in-stone process is simple: While the thought of making a true connection between a grower and a buyer was the inspiration for the auction system—similar to the Cup of Excellence model—it somehow hadn’t yet inspired the legwork necessary to establish, maintain and grow those connections. Most roasters were content to bid high and take their chances on the top lots the following year.

Faust wasn’t having it. “Roasters have the most privilege in the supply chain, and there needs to be a redistribution of risk between the producer and roaster,” he says. “The point for me is not to go back year after year to buy at auctions. I want to go back year after year and meet this producer’s kids and watch them grow up, and learn about how they do coffee so I can learn about what I need to do on my end to do the best we can.”

When it became clear that he meant it, Miller—along with Jairo Ruiz, co-founder and director of the specialty-coffee exporter Banexport—located the producer whose coffee Faust had purchased and helped facilitate an arrangement for future buys. “I said we want to commit to all of their crop so that we’re his only customer, because I think there’s value in that,” Faust says. “I wanted him to have a secured price and secured buyer,” freeing up energy to focus on quality. While that first relationship didn’t end up panning out, it did allow Faust to meet that producer’s nephew, William Muñoz of Finca El Nogal, with a mission and a plan already in place: “Last year we purchased the entirety of his crop,” Faust says, along with all of the coffee from another farmer in Huila.

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Top leaves of Tabi at Finca El Nogal in Huila, Colombia.


All told, it came to about 100 bags—the volume Duluth Coffee typically needs from Colombia in a year—and the delivery was separated into different quality tiers: less-expensive but good-quality lots that score between 84–86, and more-expensive micro-lots like a Pink Bourbon variety selection.

“I was like, ‘What do I do with 30 bags of $6 Pink Bourbon?’ I sat down and said to the producer, I’m going to buy all of your coffee, no matter how it comes in: For me not to sit on my message there would be shitty,” Faust says. “So, we’ve taken the Pink Bourbon and a lower-priced lot and blended them, and we’re able to sell that to the grocery market, this coffee from the same producer. It’s about 30 percent Pink Bourbon, it’s great quality, and it’s at a margin that’s just slightly lower for me. That’s my compromise. I’m still making some sort of margin, it’s just unrealized margin.”



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Favio Valenzuela of Finca Primavera, Saladoblanco, Huila.


Faust is not a Pollyanna about the risks involved with a buying strategy like this. He has experienced shipping delays, quality drops and frustrations over dead-end negotiations with producers, despite everyone’s best efforts. Pragmatically, he relies on his importer relationships to fill in the gaps when needed, and mitigate his risk. “I don’t pigeonhole us into, ‘We can only buy from these producers.’ We just use our resources,” he says. Last year, a new relationship in Guatemala that had promise was suddenly upended by covid-19. Thanks to his existing relationships with his import and export partners, however, he’s been able to find a meaningful temporary solution until he could renew the thread. Once his immediate needs were met, Faust felt ready to commit to a container from the original grower: “It’s my first container from a single producer. That coffee won’t arrive till March or April, so we’ll go on buying [the temporary coffee] until it lands.”

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Coffee dryer up top, washed processing below at Finca El Nogal.


For Adam Strauss of Unity Sourcing & Roasting, based out of Los Angeles and New York City, the “origin story” of this buying model—sourcing more coffees from individual producers rather than picking and choosing a few top-scoring bags here and there—is very similar. He attended an auction in El Salvador and identified producers with whom he wanted to collaborate for years to come.

“It’s no longer acceptable to fly down, buy some coffee, and say, ‘See you next year,’” he says. “These producers are awesome humans, and you should be engaging with them year-round. Partially to have that connection—‘How’re your kids, how’s your dad?’—and partially so we can prepare for the next harvest, what worked and what didn’t.”

If this sounds reminiscent of direct trade, you’re paying attention. The primary principles of direct-trade relationships are generally the same (commitment, communication, conflict resolution, compromise), though your mileage may vary based on the application of direct-trade practices, since it’s not a formally regulated certification or methodology. With this buying practice, the idea is to buy more from fewer partners and to invest in growing with them, matching your buys to as much of their total production as possible.

As with direct trade, Strauss thinks that many small roasters are intimidated by the economics of it all, and overwhelmed by the logistics. “A lot of people who aren’t operating this way, the No. 1 reason is probably financial—but some of my most affordable coffees are the best relationships,” Strauss says. “You just have to form that relationship and figure out how you can get an array of different products from that farm. You can get all your things if you select the right partners: a $2.50 FOB [free on board] for a lot of coffee, a $3 FOB for a medium amount, and a $6 FOB for eight bags, and $8 FOB for four bags. You want to match your business size with a farm size so you can buy more from fewer people. Once you’ve aligned yourself with a grower of the right size farm, you can figure out how to have a plan in the long term. For me, I only want to buy coffees this way, and I don’t want to ever buy coffees the other way.”

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Parchment drying at Finca El Nogal.


Of course, the ideal scenario is that the investment the roaster makes into the sourcing relationship provides more stability and that the producer enjoys greater profitability, which enables them to turn out better and better coffee every year. Realistically, of course, that’s not a perfect equation, but Strauss is pragmatic about it. “There have been a few times when I’ve seen disappointment, but every single green buyer and every single person who drinks coffee should be understanding that it’s a miracle to get great coffee from the same farm more than once.”

In North Carolina, Summit Coffee CEO Brian Helfrich has big goals for his producer-focused sourcing. “Our commitment is to be at 75 percent relationship coffee by 2023,” he says. “We look at relationship coffee as integral to who we are—we’re in the relationship business. As a small roaster that’s growing every year, we’re trying to find more relationships slowly, so we can really build on the ones we have. For us, it has gone two ways: It’s like you meet somebody and then you start sourcing [from them], or you start sourcing and then you meet them. It’s offered us two avenues to find ongoing relationships.”

Helfrich says a coffee achieves “relationship” status after three consecutive years of purchases and a commitment for future buys, along with “some direct connectivity” such as visiting (when possible) or other ongoing contact. “We’ve had Zoom calls and Instagram video chats with some producers during the Honduras floods, and we did fundraisers for them,” he says. “It’s the difference between the transactional partnership and the actual, ‘I see you. I know who you are. You know who I am. You have my contact information. We’ve spoken.’”

For Summit Coffee, the relationships need to extend all along the chain. “Our goal is to find a few new partners and also to think of coffees that we’ve liked or importers that we’ve liked to work with and try to strengthen relationships with people that we source from,” he says. Especially for smaller roasters, this aspect is key to establishing the right strategy and making connections that will grow and evolve in a mutually beneficial way. Ideally, as your business develops, so does the farmer’s output.

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Cafe Leguizamo, San Agustín, Colombia. Pictured from left to right: Eric Faust (Duluth Coffee Company), Charlie Comnick (Duluth Coffee Company), Johana Burbano Muñoz (barista, Cafe Leguizamo), Samuel Levar (Duluth Coffee Company), Arnulfo Leguizamo (Finca El Faldon, and owner of Cafe Leguizamo).


Roasters of any size should be able to start small by asking their importer partners to match them with producers whose output is calibrated to their volumetric need. One good relationship that grows and deepens over time could very well be the start of a meaningful and sustainable sourcing journey. It doesn’t need to be an all-or-nothing transition. “Obviously, as a roaster who was only doing 12,000 pounds a year [our first year], we didn’t have the bandwidth to do that,” Helfrich says. “You start with one person, for five bags at a time, and then you scale from there.”

Remember that coffee farms are businesses, too, and somewhere out there are coffee-farming businesses that are the same size as your coffee-roasting business. What could you accomplish if you worked together, as true partners? You may find yourself able to not only make real impact from the buying relationship, but also expand your offerings in a meaningful way. Long gone are the days of the 16-bean blend and the smorgasbord of menu items. There are myriad ways to use the same coffees—and/or the same relationships—to create a diverse offerings list that not only tastes great to your customers, but has the power of a genuine connection behind it.


*****

EVER MEISTER has been a coffee professional and journalist for the past 20 years, and for most of that time she's been lucky enough to do both simultaneously. She is the director of education and editorial manager for Cafe Imports, and the author of New York City Coffee: A Caffeinated History (The History Press, 2017).


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