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Direct TradeDirect trade
Direct trade is an important and growing trading model that has also become a marketing tool, but unfortunately it is often abused. That is why this model deserves some clarification.
What is ‘direct trade’ exactly? The answer to that question is not that simple. Ask ten people and you get the same number of different answers. This is because each roaster you talk to has a different explanation. And direct trade models vary internationally too. The primary principle is that direct trade is focused on sourcing the best possible coffee from a particular region, while respecting local living conditions and ensuring a decent income for the farmer.
How did we at OR Coffee Roasters start out with direct trade? In fact, our model has grown naturally without it actually being a goal in itself from the start. OR had been a coffee roaster for some time, but we felt a need to understand the product better. Until then, just like the majority of Belgian coffee roasters, we still bought our coffee through traders, which you could call brokers.
In Belgium, we also have the good fortune of having Antwerp, a major international seaport when it comes to coffee. In fact, you never need to leave the country to buy coffee. Yet we experienced lots of variation in quality and very limited information about origin. There was little insight into the method of cultivation, the background, the local situation, the living conditions, the farmers’ incomes, etc. And in 2007, we still lacked that knowledge ourselves.
The first trips we took to Brazil and Nicaragua helped us to know more about the process, gain knowledge, etc. As is the case for many coffee professionals, our first confrontation with the work on a coffee plantation was also a lesson in humility for us. We realized how much more was involved in producing coffee than we as consumers had experienced. At the same time we saw the whole cycle that a coffee bean goes through before it ends up in the customer‘s cup.
Classic coffee trade, depending on the country, goes through at least a few middlemen and sometimes very many. As a result, the trade loses transparency, and every broker takes a slice of the cake. The final price that the consumer pays in this case is not always still in proportion to the quality of the bean. It is rather more dependent on the number of intermediaries taking profit.
In addition, we noticed the quality of the green beans that we received varied greatly, even within the same region and from the same farmer. So we gradually started working on a direct model. Why would we do that? Before discussing the benefits and our motivation to buy directly, we should also mention its disadvantages. In a nutshell, it costs a lot of money, energy and time. If your motivation is simply more profit, you should therefore never even start direct trade. And yet it is the best decision we have ever made.
The knowledge that we at OR Coffee Roasters have today can‘t be found in books or on the Internet. There is just as little chance of that as you becoming a barista simply by reading a coffee book.
Ethics
Discussing the ethical considerations involved in coffee trade and consumption. The first important point is an ethical issue. If you plan to grow from a sole trader to a fully fledged coffee company, it is important that your enterprise is in harmony with your personal values and standards. Coffee beans are not just made in a factory; they are grown by families in rural areas on the other side of the globe. So one of the benefits is the direct bond and relationship that you develop with the coffee farmers. The price you pay as the coffee roaster goes entirely to the coffee farmer, and that is a win–win situation for both parties.
Quality
Understanding how the quality of coffee is influenced by the trade practices and sourcing methods. You can excel in your craft as a roaster, but you are still dependent on the quality of the green beans that you receive. Ever since we started travelling to the country where our beans are grown, met the farmers, and became increasingly involved in the process from its roots, we have observed that there is still a lot of room for development in terms of quality. Of course, this is only interesting for the farmers once they have an assurance that a buyer is willing to pay for quality. That‘s why we decided to engage and collaborate more intensively with farmers on improving the process, with the ultimate aim of creating even higher quality and keeping the quality level consistent.
Knowledge
Gaining knowledge about the various aspects of coffee trade is crucial for both consumers and industry professionals. As we have mentioned already, direct trade has probably provided the greatest contribution to our know-how. It gave us knowledge about growing, processing, different varieties, etc. But sharing that knowledge with farmers in other countries has also provided new insights.
There is a massive difference between the way Congolese farmers and, for example, growers in Costa Rica work, and not just in the field of resources – but also in terms of knowledge, awareness and insight into the production process and about the influence certain methods have on flavour. It is interesting for these farmers to learn about other processes and to put them through trials.
Travelling coffee professionals and coffee roasters have contributed greatly to spreading knowledge and sharing experience. That is why we also find it important to bring our baristas on visits to the plantations. Not only because they learn a lot about the cultivation, but also because coffee farmers learn a lot from them.
Learn more about direct vs. indirect trade in our blog: 'Understanding the nuances of direct vs. indirect trade'.