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David Wilson

Vertical Sourcing Part 4: The (Un)Sexy Side of Sourcing

One morning this January, I found myself climbing to the top of Buena Vista, the highest point near La Suiza coffee community.

 

The area is home to some of the best coffee being produced by this remote Guatemalan cooperative. We were visiting Don Leonardo’s fields, where he’d been implementing improved pruning practices and increasing his application of nutrients to the plot, with visible results. Thanks to that effort, Leonardo’s coffee had been cupping at steadily higher ratings. There was a real possibility of turning his coffee into a micro lot one day soon.

It was my third day in La Suiza on this trip, my first since the beginning of the pandemic. I was flying high, delighted to find that coffee quality was improving across the community. We were getting buy-in on experimental approaches to processing. And we were making progress on a way to help producers with farms high up on the volcano by facilitating the transport of coffee cherry down the steep mountainside and the pulp, an important fertilizer, back up. (Stay tuned for a chance to be involved in this project!) 

 

 

I taste coffee for a living. (I never get tired of saying that.) When you see photos of cuppings in remote regions of Guatemala or Uganda, it’s easy to imagine the glamorous, Dangerous Grounds-esque life of a coffee adventurer—tasting and discovering amazing coffees, then contracting them for sale on the other side of the globe. And that’s certainly part of the story. Specialty coffee buyers do, after all, focus on the interplay of volume, quality, price, and securing their supply lines. 

In our last blog, we told the story of Coffeebar’s long term partnership with La Suiza, a community that does not presently produce coffee at the upper echelon of quality. This commitment means that our top priority is not finding the absolute best coffee available, the elusive “unicorn” beans. In fact, it’s been four years since I tasted coffee in Guatemala with the express goal of selecting a particular lot for sale in our cafes. 

So what are we tasting for then, if not quality? In La Suiza we’re evaluating individual lots to ensure the consistency of the blend, as well as looking for opportunities for improvement. And yes, we keep an eye out for lots that are demonstrating promise and unique potential. In the case of Manuel Gomez, whose coffee we import as micro lots, we may be cupping some experimentally processed coffee, a project funded by Coffeebar, seeking new ways to improve quality and create market differentiation. This in turn is information that can benefit all the producers we work with.

 

 

Always though, we’re tasting with an eye towards next year--towards the changes we will make next year, all whilst maintaining consistency and trust with our partners this year. 

But the producer is just one of the partners crucial to our Vertical Sourcing supply chain.

 

In the middle

 

One of the tropes of “direct trade” coffee is that this approach eliminates opportunistic middlemen. “Middleman” connotes someone who carves out a piece of the pie without actually contributing value. And it does happen. Coffee buyers in the streets of Guatemala are known as ‘coyotes’, after all. But too often, “middlemen” is a blanket term used to cover every part of a supply chain between producer and the end consumer.

“Eliminating the middleman” doesn’t reflect the complex reality of coffee export. (No “direct trade” specialty coffee buyer is stuffing 150-pound bags of beans in suitcases and schlepping them home to their roaster.) 

Freshly harvested green coffee beans, like all organic products, have a window of freshness during which they need to be used. So the clock begins to tick on green coffee the moment it’s picked. But coffee moves around the world on big, slow, container ships. And green coffee beans are extremely sensitive to other odors, so a shipping container should contain only coffee (banana-flavored brew, anyone?). 

That shipping container costs the same, whether it’s empty or full. So De la Gente, the non-profit importer that works with La Suiza, must fill an entire container before they can move coffee. That’s 250 bags--roughly 40,000 pounds. If Coffeebar purchases 100 bags of coffee from La Suiza, those bags have to be consolidated in a container with coffee DLG is moving from other regions of Guatemala. 

What would it look like if Coffeebar were to actually practice ‘Direct Trade’? For starters, we’d need to obtain an export license to move the coffee legally from the country of origin. And we’d need an import license to land that coffee legally in the United States. And even if we were to obtain those licenses, we’d still need shipping companies to move that coffee from the farm to our doorstep--the S.S. Coffeebar is a few years from launch. We’d also be paying substantially more for those services than any importer does, because the volume we move wouldn’t justify better rates. 

The end result of true “direct trade” would be coffee that cost significantly more for us to bring to the US, and didn’t add a dime to the farmers’ earnings. That’s why the only companies who actually play at the “direct” level are huge global brands. And why the term “direct trade” is a bit of a romantic exaggeration. 

So Coffeebar partners with the importers we trust, working with them to ensure a fair distribution of profits throughout the chain. The pieces of the pie taken by exporters and importers (and shipping companies, and warehouse and dock workers) aren’t potential earnings of the farmers taken by “middlemen”, but rather integral parts of a supply chain that must be kept healthy from one end to the other. These folks help bake the pie before they take a slice. 

That’s why Coffeebar celebrates our “middlemen.” You’ll see the names of exporters and importers on the packages of every single-origin coffee we release.  And even then, we aren’t able to acknowledge everyone who makes your latte possible: coffee’s unsung heroes are legion.

 

Thinking outside the container

 

The heart of Coffeebar’s Vertical Sourcing program is our mission to maximize impact. Coffeebar must purchase a certain amount of coffee each year for our business, but choosing where and how to purchase that coffee has a dramatically different impact at the producing end. 

This brings us to Vertical Sourcing’s biggest win last year. 

Green coffee’s limited shelf life is shortened further by the dry climate of high-desert Nevada, so our contracts are set up to help ensure that we use the coffee within six months of arrival. Factor in 60-90 days from end of harvest to the coffee being available to us and we expect to have consumed coffee from a region within nine months of the harvest. Get this balance wrong, and we could wind up with coffee from last year’s harvest still in the warehouse even as we look to contract for the coming year. It’s a balancing act. 

Remember how DLG has to combine La Suiza coffee with coffee from other regions to fill that shipping container? Here’s another wrinkle. Due to climate and geographic conditions, the harvest in La Suiza is finished more than three months ahead of the rest of Antigua’s coffee harvest. It adds three months to the age of the coffee when it landed in the States, and unfortunately, that had limited our purchases. 

Though Coffeebar saw a modest uptick in roast volume in 2020, it wasn’t enough to justify a larger contract with La Suiza. Despite that, we increased our purchase from 70 bags of coffee last year to 104 in 2021, an increase of 5,100 pounds. How? 



Multiple importers move coffee out of Guatemala, and the larger ones are able to fill containers much sooner than De la Gente. We spotted an opportunity: if we could piggy-back on one of these, we could get our La Suiza coffee out of Guatemala sooner. And if we could have the coffee in our warehouse three months earlier…well, that would enable us to buy three months’ more supply. 

And this is where the glamorous vision of coffee sourcing confronts reality: it’s pretty light on rainforest swashbuckling, heavy on keyboarding. The lion’s share of sourcing involves endless email threads between buyers, importers and exporters, as everyone attempts to confirm shipping dates, contract prices, timelines, etc. (Which would make for the world’s dreariest Insta post.) 

On my January visit to Guatemala, I attended a meeting between Danilo Rodriguez of DLG and the five farmer/board members of La Suiza’s export group. Danilo had pitched the alternate importer idea to them in calls prior to the trip, but they were dubious.

In a community where relationships are everything, the notion of such an abrupt change-up was met with consternation. Work with an importer they didn’t personally know? That would require some serious convincing. Danilo took the lead as he and I carefully explained why there would be two separate contracts this year, and why one of them would be signed with a different importer. Fortunately, after two hours of discussion, the group was swayed. 

The end result: Coffeebar was able to increase our 2021 purchase from the La Suiza community by almost 50%. And we figured out how to increase our impact without overextending ourselves, or taking on unnecessary risk during a wildly uncertain time. 

 

Impact in perspective

 

But let’s go back to that exhilarating morning at the summit of Buena Vista, feeling great about what we’d accomplished together. Out of nowhere, Don Leonardo asked me where Nevada was. 

“Is it close to Arizona? Maybe I can visit you,” he said. “I’ll be in Phoenix in April.” 

My elation turned to unease. Visas to the US are not easy to secure for Guatemalans, nor are funds for airline tickets. As we continued to talk I learned that, sure enough, he was planning to cross over through Mexico. 

“But why?” I asked, trying to hide my dismay. Things were looking up for La Suiza. He’d been working so hard on his land. His coffee was getting better and better.  

‘Cafe no da,’ Leonardo said simply. Coffee doesn’t give

It wasn’t a critique of what we were doing. It wasn’t a condemnation of the coffee industry. He was saying that coffee doesn’t give quickly enough

La Suiza is indeed turning a corner. Our purchase contract this year will see more than $30,000 going into a community where a laborer makes $4-8 for a day’s work. But there are 50 families in the export group, so each family is earning $600 from the sale to us, compared to $300 selling on the street. This means that all of our work amounts to an additional $300 this year to these families. 

 

 

In this part of Guatemala, that could be the equivalent of 50 additional days’ wages. But in the US, even the lowest minimum wage job pays $300 a week. And indeed, coffee communities are supported in part by remittances--money sent from family members working in the US. 

But Leonardo doesn’t intend to stay in the US more than a couple of years. He wants to earn enough money to make a bigger investment in his farm, and grow his coffee business. In other words, he’s risking his life, liberty, and livelihood to raise working capital. 

Insights like this are shaping our vision for the Vertical Sourcing program. We celebrate our wins with communities like La Suiza. And we focus on creating the most impact possible with our work. But we also have to recognize the deep-rooted, complex realities. True success isn’t measured by the number of dollars on the contract we sign. It’s measured in the impact that has on the lives of our producing partners. 

I have a new metric for measuring our success in La Suiza. When coffee production becomes not just a viable livelihood, but the preferred option to emigration, we’ll know we’ve had real impact.
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