Direct Trade Revisited

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The last time, we wrote about our sourcing program was in 2010, and it’s time for an update. We have come a long way. Half of our Seattle Space Blend is now directly sourced from one farm in Brazil. With the help of one of our team members, Oscar Garcia, who lives in Antigua, Guatemala, we have spent the last year expanding our reach in Central America. We’ve learned that Direct Trade means a lot of work and is as important and meaningful as ever.

True Direct-Trade requires a huge effort

Oscar and I traveled by car, and now we’ve established strong relationships in Panama, Costa Rica, El Salvador, and Guatemala. Here’s how: first, we research farms on the Internet, using the Cup of Excellence program as a guide. For instance, a glance at recent Cup of Excellence results reveals that the area around La Palma, El Salvador, has consistently produced the highest-scoring coffees in the country. As we hone in on a specific area, like La Palma, we embed ourselves in that town, and then we visit as many farms as we can fit into a twelve-hour day. Often we leave before dawn in order to get to a farm by 7:00am. On a good day we’ll visit two or three farms before nightfall, when the roads get really treacherous. Our record so far has been four farms in one day.

The objective of the farm visit is twofold: first, we want to meet the farmer to see if we might be able to establish a long-term relationship. Is the farmer interested in receiving us as visitors? What is her or his outlook on life? This sounds vague, but Oscar and I are looking for someone whose values mesh with ours. Oscar’s deep understanding of Central American culture and his outstanding language and communication skills help break down many barriers. Unlike many other roasters we have encountered on the coffee trail, we are not limited to meeting English-speakers. Most of the farmers we interact with do not speak English at all. Second, we ask for samples of the best coffees grown on the farm. We will enter a long-term direct-trade relationship only with those farmers who are open to working with us and who also have great coffee. We believe this will result in outstanding coffee in our two cafes. Here’s why…

How do we define Direct Trade at Seattle Coffee Works?

The term Direct Trade has been around for a while but different roasters have different definitions and standards when it comes to using “Direct Trade” on their labels. Here’s what Direct Trade means for us:

  • We know and buy from the farmer (the farm owner) personally;
  • We have visited the farm, and we continue visiting the farm at least once a year to check on the conditions at the farm including ethical concerns (no child labor; workers are treated fairly) and quality concerns;
  • We usually pay the price the farmer asks for. We don’t haggle about price. If we like the quality, we pay what the farmer is asking. If we don’t like the quality, we don’t start a relationship in the first place;
  • We are invested: from the beginning, we invest heavily into our relationship. Once we have bought from a farmer for the first time, and if everything went well, we will buy from that farmer again, and we will buy at least as much coffee as in the previous year. If the farmer’s asking price is lower than what we think the coffee might be worth based on our cupping notes, we will raise the price paid to the farm voluntarily. If the coffee in any given year does not live up to the previous year’s quality, we will still buy the coffee that year and work with the farmer on getting back on track. Basically, we work through a performance improvement plan with the farmer before even considering canceling purchases from that farmer;
  • We continuously work on quality with our farmers. We send them cupping notes. We share our own experiments at other farms, including processing and growing techniques. We don’t presume that we can coach our farmers in their craft, but we are in their corner when it comes to improvements in cup quality;
  • We support our farmers in any way we can: for example, by bringing them brewing equipment, or even a sample roaster. Our relationship is not simply transactional. We become family.

What do we (and you) get out of Direct Trade?

  • Continuous quality improvement. We work closely with each farmer to fix minor glitches in harvest and processing that might affect the overall quality of the coffee. As in coffee brewing, there are many ways in which coffee can take small hits to quality.
  • Special lots and experimentation. Every year we challenge our farmer partners to try something new: a varietal separation (e.g. separate out the Yellow Bourbon from a usually mixed lot), a new process (e.g. try Honey process), a new varietal (e.g. grow a varietal not typically found on that farm, based on experience at similar farms with similar climate and soil.) This year, two of our farmers are sending us previously unknown (and unclassified) botanical varietals!
  • Coffee education for our team. We have great personal relationships with our farmers, and starting in 2011, we have sent as many of our team members to our partner farms as feasible. We believe this will make our team better educated and in turn better able to educate you about the coffees we carry.
  • Great information. We all want to know where our food comes from. We cherish our connection to our farmers, who will gladly tell you exactly what’s in the coffee. Often this information gets lost in the conventional supply chain of farmer-mill-exporter-importer-roaster-wholesale account-customer. By making the chain a lot shorter, we get to the real information. We ask our farmers to review each and every one of our labels to ensure complete truth in advertising.

What is not Direct Trade?

Our definition of Direct Trade is simpler and more rigorous than other well-known roasters. Here are some examples of how we differ from other roasters:

  • We will always decide in favor of the farmer if there is any miscommunication about price. A different roaster dropped a multi- year partner after asking for forty samples. (Yes, 40! That is a lot of work for the farmer.) Then they decided that the price requested by the farmer for the lots chosen had not been previously agreed on. An ugly divorce!
  • We won’t buy from middle people, part I. A famous West Coast roaster keeps buying coffee from a notorious Central American mill owner who buys cherries from small holders around town. The mill owner is known for being “a difficult man” (with no respect for his workers). The individual lots produced by smallholders all go into a “Mill Name” blend. The cherries are bought cheap, and the coffee is excellent. But it’s not Direct Trade in our definition because there is no direct connection to the farmer.
  • We won’t buy from or through middle people, part II. Hunh? What other middle people are there? Oh, many! It’s become fashionable to buy from an exporter in one of the Central American countries and call this “Direct Trade”. Basically, some of our third-wave roaster peers will travel to the capital of a given Central American country and ask the exporter to put on large cupping sessions with coffees from many different farms. We have made it a point to trade only with farmers whom we have met first, independently of an exporter. We love our exporters when they provide a valuable service (dry milling, packaging, consolidating containers for export.) However, when we buy coffee that was proposed to us by an exporter, we will not call that “Direct Trade.”
  • We won’t buy from middle people, part III. A Panamanian exporter sold coffee from El Salvador and neglected to pay the farmer $17,000. The coffee arrived at a renowned left-coast coffee roaster and tasted excellent. The roaster looked pretty. The farmer was the one who took the hit. It’s not Direct Trade if it doesn’t work well for the farmer. Needless to say the farmer won’t want to sell to that exporter-roaster again.
  • Another roaster barely meets the farmers, often hasn’t been to the farm even once, but calls himself a “Direct Trade Roaster.” We will not do that. (See our rules above.)
  • One roaster frequently imports coffee from one farmer who, in his country, is a very, very rich man. Why does this farmer have barbed wire around his farm house, in the center of the farm? Isn’t the high wall around the farm enough? Is it to protect himself from his own workers? Do they maybe not feel so good about this rich farm owner? We will leave it up to anyone’s interpretation what is going on here, but let it be said that we would rather not import coffee at all than import from a farm like that.

Please don’t misunderstand this short list of direct-trade breakdowns as finger-pointing. When you’re on the ground in one of the coffee growing countries, the realities are stark. It’s hard to get around. It’s difficult to communicate across cultural and language barriers. True Direct Trade is a lot of work and it’s costly. And, at the same time, please hold us to our own high standards: we pledge to walk the talk.

Principles

A bigger principle is at work here. Sticking to our own rules for Direct Trade helps prevent duplicity. The countries in which coffee grows have a long history of duplicity between what people are allowed to say and what they are really thinking. As a country, the United States has often used this duplicity for its own purposes. Take for example the civil wars in most of Central America, with the CIA actively intervening and routinely replacing heads of state. If we want to live up to our responsibility as representatives of one of the world’s foremost democracies with values of transparency and forthrightness, then it behooves us to act accordingly. If we don’t apply our highest moral standards to our Direct Trade program we’re in danger of simply perpetuating the historic duplicity in the coffee trade and international relations.

The typical model of the wholesale “direct-trade” roaster does not bode well for the long-term success of direct trade. How can the roaster who’s selling their coffee for $12.99 per bag at a supermarket have enough flexibility to pay their farmers adequately for that coffee? It sure helps the roaster’s bottom line to sell a large quantity of coffee at supermarkets, but over the long-term, can the roaster sell at that price (minus the super market’s markup) and support quality improvements at the farm level? Sometimes “direct trade” coffees go on sale at supermarkets for as low as $8.99 per bag! Ugh. If you’re tempted to pick up a bag of this coffee on sale, please consider whether you really believe coffee sold at that price is sustainable. It’s your choice to buy the coffee when it goes on sale, but please be realistic whether it can live up to your own high ethical standards. Whether selling at supermarkets or to cafes, the typical wholesale roaster is squeezed into the same uncomfortable position as many of the other middlemen on the way from farm to cup. To avoid this predicament, we will continue to sell direct-trade coffees mostly in our own cafés or online direct to customers, at a price that is sustainable for the farmer. If, one day in the future, we do want to sell some of our coffees to resellers, we’ll have to have a very convincing pricing model and an extremely thorough education program in place.

Why we got into the coffee business in the first place

In the end, we got into coffee because we wanted to make the world a better place. Coffee is not a necessity. I’ll say that again: no one needs to drink coffee for any reason other than their own enjoyment. If anyone wants the caffeine jolt, there are many alternatives to coffee, including caffeine pills. It’s that simple. If we do coffee, we should always do it to the best of our ability and to our highest ethical standards.