Two cents about direct trade

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Every day, at least a couple of our customers ask if we carry fair trade or direct trade coffee. (We do.) In fact, we’re closing in on 100% direct trade coffees in our signature espresso Seattle Space blend, which will make us the second coffee company in the country to do so.

There are so many folks out there claiming the moniker of “Direct Trade”. While it may be hip to slap “Direct Trade” on a label this year, for us Direct Trade (or any other name you want to give it after you read through the end of this post) is an important long-term strategic decision.

First off, let me mention the obvious: many roasters, small and large, have practiced Direct Trade for a long time, maybe centuries. For instance, I am thinking of our friend Dave Stewart who co-founded Stewart Brothers’ Coffee which became the well known Seattle’s Best subsidiary of the mega Seattle coffee chain. Dave has been importing direct from his in-laws’ farm in Costa Rica for a long time. He doesn’t call it “Direct Trade” but in effect it is more Direct Trade than some other “Direct Trade” labeled coffees out there. For lack of imagination, I am also thinking of Peet’s Coffee who’s been doing some sort of “Direct Trade” for longer than some of us have been alive.

What does Direct Trade mean for Seattle Coffee Works? It means a long-term relationship between the coffee grower and the coffee roaster, in which the farmer visits the cafe (as Aurelio Hernandez, one of our partner farmers in Guatemala, did last week), and, the roaster regularly (at least once a year) visits the farm.

The most important aspect of Direct Trade is that farmer and roaster work together to improve the quality of the coffee that gets to your cup. For that to happen, the relationship between both must be close and one of mutual respect.

Direct Trade is not a charity event but a straight business model: As the quality of the coffee improves, the price for the coffee goes up. The price goes up because there will be always a limited supply of truly great coffee, and better coffee generates more demand. All three, grower, roaster, and discerning consumer win. It’s that simple.

When possible, Direct Trade pricing is independent from the vast and speculative fluctuations in the global coffee commodity market, giving both grower and roaster more predictability and security. With our smaller Guatemalan producer partners we’re now starting to set the prices for coffees we’ll be buying in 2011.

Better prices for the coffee enable better lives for producers. If Direct Trade doesn’t translate into sustainable farming practices all around – I mean: no pesticides or herbicides, bird friendly farming, limited or no use of synthetic fertilizers, and, perhaps most importantly, fair wages and humane living conditions for all involved – then it’s not worth doing. A better price paid for the coffee should go a long way towards making sustainability possible. Given the high initial investment (travel costs, export and import fees, lack of economy of scale) only a sustainably run farm is worth pursuing for any roaster who has any business sense.

Fair trade, on the other hand, is pegged to commodity prices, which is why it works well for large- and huge-scale coffee companies. Direct Trade and Fair Trade are not in competition. They are two very different business models, one with a built-in emphasis on small scale and quality, and the other with an emphasis on improving lives on a very large scale. It wouldn’t be economical for a large-scale (think millions of pounds of coffee per year) company to enter a relationship with Aurelio who produces about 300 pounds of coffee a year. On the flipside, if a small coffee company like us didn’t raise the bar on quality we probably shouldn’t be in business.

The producer of our Brazilian coffee, Ipanema Farms, is a large-scale farm which has poured a lot of resources into producing large quantities of super premium coffees. They can choose their certification because they’re a well-run business which is treating all its partners very well: workers make better money, the farmland has been sustainably used for over 200 years. And yet the folks at Ipanema have a laser focus on quality. And they’ll produce just about any coffee we ask for. They are just as much partners as Aurelio is.

We’re in the business of providing superior coffee to our customers. There will always be a much larger market for less-than-superior, but quite possibly still drinkable!, coffee in which it is relevant and important to know that the coffee came from an ethical source – even if we might never know the exact source.

More than any label or certification, we live by the mantra of “know thy producer” because we, and the growers we work with, stand behind our coffee *personally*. We don’t romanticize the hard life of small-lot coffee producers. We don’t shout our certifications from the rooftop. (I don’t know about you, but my BS sensor goes off pretty quickly when I hear anyone flaunting the latest “in” label.)

We are in the business of selling the best coffee we can possibly imagine - and by “we” I mean the baristas and cashistas and roaster (me) at Seattle Coffee Works, and our partners in Guatemala, Brazil, and soon many more spots. Because working together is better and a whole lot more interesting! By the way, Aurelio is in town for two months, so stay tuned for when he’ll stop by the cafe again.

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