How We Buy Coffee

Posted on September 19th, 2017

We are all in specialty coffee because we are in pursuit of the very best coffee, but what does “the best” mean? Is it a minuscule but high-cupping lot of super-special coffee, or a versatile workhorse that can play multiple roles—or maybe those two in concert?

We are constantly seeking higher quality, more interesting varieties, meticulous farm practices, and innovative processing techniques that will result in that mind-blowing beverage, vastly more complex than wine (and more memorable, no matter how much you drink), but we are also looking beyond the taste, searching for both coffees and buying practices that fit into our worldview as businesspeople who are passionate about doing better through our deeds every single day.

That last idea is what we believe at Cafe Imports: That buying the best coffees means buying coffees better. In order to maintain the integrity of the supply chain and reinforce the relationships we aim to build with our producer partners, we knew we needed to design a completely holistic sourcing strategy, one that incorporated the needs not only of our roaster customers, but also of the farmers.

“We are essentially trying to figure out a way to support our desire to buy the best coffee, and figuring out a buying model that works that isn’t just us coming in, taking the best, and leaving,” says Noah Namowicz, Cafe Imports’ senior vice president of sales, explaining the core principle behind what we call our “stratified buying program,” something that has become a cornerstone of our sourcing and has informed the majority of our offerings over the past few years.

“The way that we look at stratified buying is approaching a given farmer or association and saying, ‘Our goal here is to try to develop quality, and to have access to the best coffees you can produce. What type of model supports that?'” he continues. “Developing different quality incentives for different quality levels within a given project has been the way that most producers have said would benefit them.”

In practical terms, what this creates is a tiered pricing structure for coffees from any producer participating in the program either as an individual or within an organization, with the price basis on the cup: Naturally, being humans with taste buds that love coffee, we aim to buy the top-scoring chops any farmer can tender. However, we also realize that no farmer creates only 90+ coffees, and he or she needs to sell all of the harvest in order to earn a living. Instead of skimming the cream off the top, then, we create products that meet the quality of the coffee where it is, and price accordingly in a way that is fair, acceptable, and transparent to the producer; creates more marketplace stability because farmers know they can find a single buyer for a larger percentage of their total yield; and offers our customers a wider variety of coffees that they can use to fill out their menus.

“For most coffee farmers, it doesn’t make sense for them to produce exceptional coffees, because they’re selling maybe 10 percent of their total production as a microlot, the best-of-the-best quality. Then the rest was just sold locally,” says Noah. “Looking at the amount of money it would take to invest in raised beds, increased fertilizer, increased labor in picking coffee—all of the things that are basically required of specialty coffee—they were losing money as opposed to if they just did everything commercially. So the model is really saying, “OK, let’s look at this as a business. Your farm is a business, and we are a business. What type of a structure makes sense for you to take the risk in trying to produce specialty coffee?”

“Anybody can set up a table of microlots and the farmer can get paid for that. That’s like winning the lottery for that farmer, because maybe they did something special, but maybe that’s just how the coffee tastes,” says Noah. “But when that microlot purchase is part of a larger program where we know that the farmer is going to be getting some injections of cash at various levels of their production, that supports everything getting shifted up. I mean, sure we can go to the supermarket and buy tenderloin, anybody can do that. But to learn how to smoke a chuck roast or something, that’s more difficult, right? Well that’s the piece that the farmer with the cow is going to think that’s a lot more attractive, if he knows there’s specialty buyers for the whole cow.”

The coffees that we buy along this quality hierarchy are still cupped and analyzed with a very strict notion of each basis, and the structure itself is a very important part of the way we communicate this information with producers, who are typically making several (rather grueling) trips to the receiving point throughout the harvest to tender their coffee for sale.

“When producers are delivering coffee, they’re bringing in dry pergamino [parchment coffee]. [Banexport, one of our export partners] receives the coffee, they stab all of the bags, they take a sample, they clean it, and then they’ll cup it,” Andrew explains, using Colombia as an example.

Once the coffee has been cupped by Banexport, the price is adjusted. “If Banexport buys it as an 80-point coffee and it turns out to be a Regional Select, [the farmer will] get a better price,” Andrew continues. “He or she is going to show up three, four, maybe five times during a harvest period, because there are multiple different pickings.”

“The first delivery might net a [standard, lower-market] price, the next one better and the next one even better. They typically move up the mountains, so they’ll get a better price toward the end of the season, but they’ll show up four or five different times, and they’ll get paid for four or five different deliveries.”If we are buying more coffee along different levels of quality, then, the producer has fewer overall trips to make with all these heavy bags. “The thing is, the producer has to bring all the coffees in at once,” Andrew says, “and if they don’t like the price, they have to load it up and take it somewhere else. We wanted them to have a one-stop shop: ‘I drop this off, if it’s a microlot you pay me $3.50, if it’s this you pay me whatever the price is, $2, say, and if it’s this lower quality I’ll take the standard EP price.’ So we created a way where we can take all of the coffee and do different things with it. Like a cow: You have the filet, but then somebody’s going to have a hot dog.”

While the sourcing strategy was really honed with Banexport in Colombia, we have similar stratified buying structures in place in many of the countries where we work with multiple farmers, communities, and associations: Brazil, Costa Rica, El Salvador, Guatemala, Kenya, Mexico, Peru—and more in development all the time.

“I think it makes us an attractive buyer, because in addition to paying a premium for these coffees, we’re also trying to prop up the support system that you have to have to produce these types of coffees. We prefinance a lot of projects, invest in the sensory analysis time with producers, invest the equipment in sensory analysis,” Noah says. “If a specific farmer or this association is producing some really nice coffees that maybe aren’t microlot-quality level yet, but everything else is there—the soil, the altitude, the varieties, the mentality, the attitude of the people, all that stuff is there—then yes, let’s buy this at this level now in the hopes that that is going to continue to get better. If we were not inclusive like that, the door would be shut to a lot of people who we work with who do produce really nice coffees now, who didn’t at first.”

Noah goes on to say that the biggest risk involved in establishing and implementing the stratified buying strategy was taking the bet that roasters across the spectrum of specialty coffee would find use for these different levels of quality, and that we could successfully find placement for almost all of a farmer’s yield with our customer partners.

“The challenge to us is to make those purchasing decisions, and the challenge to roasters is to find out whether their business model supports them having avenues for different types of quality levels, whether that’s through different brands, different products, different blends, etc.,” he says. “It’s not asking anybody to sacrifice their pursuit of quality, it’s just saying that if we’re going to be realistic we need to find out a way to use the whole cow.”

For more information about our stratified buying program, or to explore offerings that fit this model, visit cafeimports.com/stratified, or e-mail sales@cafeimports.com.


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