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David Wilson

Vertical Sourcing Part 1: Connecting the Dots from Farmer to Guest

This past December , I was sitting in Reno’s winter cold when a coffee-producing partner in Guatemala messaged me with an invitation to his upcoming birthday. 

 

Aqui nosotros estamos dispuestos a recibirte con los brazos abiertos, y así podemos disfrutar de mi cumpleanos. Te esperamos. -Manuel 

There was no mention of coffee. No questions about contracts or premiums. Just an invite to join them to celebrate, and enjoy a few ‘leche de Gallo’ together. Of course, we would be talking about contracts, and planning experiments, and more. But in that moment, I wasn’t just the coffee buyer—I was a part of the family. 

It was a small but memorable moment of connection—one of many that have occurred since we launched our Vertical Sourcing initiative. And it was an invitation I couldn’t refuse.

 

Commodity to Luxury

 

Coffee is one of the world’s biggest commodities, like oil, sugar, cotton and wheat. Coffee farmers like Manuel and his family have historically been tiny cogs in a giant wheel. The industry has indulged in myth-making about the idyllic pastoral life of coffee farmers (See: “Juan Valdez”), but most of the people who supply the world’s beans scratch out the humblest of livings at the distant end of a global supply chain. 

That began to change with the advent of second-generation coffee shops like Starbucks and Peet’s. The Fair Trade organization made inroads in helping coffee, tea, and cacao bean farmers get a better shake, and “Fair Trade Certified” products became available to consumers.

The next step in the de-commodification of coffee began when third-generation artisan coffeehouses begin roasting their own coffee. Successful roasteries then took it a step further: They began traveling to and investing in origin (i.e., the place where the coffee comes from). This ultimately became known as “direct trade”, the idea being that the roaster was going “direct” to origin to make their purchases.

 

 

Sounds good, right? My observation about direct trade, though, was that it often seemed to be less about a partnership than about the photo op and a feel-good story for customers. Origin was still the icing on the cake—a “differentiator” as they’d say in the marketing world. 

Another thing that felt like a disconnect to me: “direct sourcing” came from the artisanal mindset of “discovering” great producers. But great producers were a tiny fraction of the coffee farmers out there. There was a far bigger opportunity for impact: to help the aspiring great producers.

It was at this time that adventure came calling and I went to work for a non-profit organization called De la Gente (Of the People) which imports coffee from Guatemala. De la Gente works with cooperatives and small-holder coffee farmers like Manuel, with a goal of creating better economic opportunities. Their vision is to improve quality of life for coffee-producing families and communities. DLG also helped communities who wanted to produce coffee but were not yet capable of producing great product. 

I wondered, what would happen if connection to origin wasn’t the differentiator “icing” but something baked into that cake from the very beginning—the heart of the business model? 

To find out, I started a transcontinental experiment.

 

Coffee Collaborators

 

Vertical Coffee Roasters was born as a small pop-up shop in downtown Reno that roasted and served coffee. Becky Tachihara, my partner in crime, ran operations in Nevada while I worked full-time at origin with DLG.

I’m an architect by training, a problem solver who accidentally fell in love with coffee rather than buildings. As part of that love affair I became a licensed Q Grader, the coffee equivalent of an advanced-level sommelier. (The Q Grader test is a beast: 22 separate tests over a week that assess your ability to accurately and consistently “cup” and grade coffees.) 

I’d crossed paths with Greg Buchheister of Coffeebar in coffee circles and he called me one night to talk about his plans for starting a roasting program. That was 2017, and Coffeebar was an anomaly; a six-store coffeehouse group that didn’t roast its own coffee. Other than buying (literally) tons of quality coffee beans, the company didn’t have a real connection to the product at the heart of its name.

Greg explained that while they’d always purchased an excellent product, Coffeebar’s baristas didn’t have a personal relationship with the coffee; neither did the guests. He’d come to realize that this was an impediment to real magic-making in the stores, and to creating a deeper coffee culture within the team.

Our conversation spiraled into a kindred-spirits brainstorm that lasted into the wee hours. Not long after, we joined forces. I became Coffeebar’s Director of Coffee, Becky stepped into the role of Coffeebar’s Education & Innovation Manager, and we kicked off the roasting program. 

We knew we could use Coffeebar’s not-insignificant buying power to benefit the farmers in countries where we purchased coffee, but we also saw those benefits could extend to other small but essential players in the value chain, such as importers and exporters. This was a departure from Direct Sourcing, which had a first-world jones for “eliminating the middleman." The acquisition of Vertical Coffee Roasters led Greg to coin the term “Vertical Sourcing” to describe our unique relationship to all the folks in the supply chain—everyone who helps move the coffee from farm to cup.

 

Relationships come first

 

The Coffeebar Vertical Sourcing initiative began with the idea of making a difference, rather than making the ultimate single origin pour-over. To truly benefit developing coffee communities through vertical sourcing, we’d have to put the relationship first—yes, over the “standards." This may sound like heresy to artisan coffee snobs, but it’s the only way to truly support the farmer who’s going from producing commodity coffee to specialty coffee. 

 

 

Our community cafes move a lot of coffee, much of it the espresso blend that goes into our coffee drinks. Much like a winemaker controls their flavor profile with a blended wine, a coffee roaster can blend different beans to manage variations in flavor. Best of all, our state-of-the-art San Franciscan roaster, combined with software called Cropster, gives us exquisite control over the roasting process and the taste of the final product. Cropster integrates our inventory management with roast scheduling, and allows us to track and store roast data for every roast (as I write, we just passed 7,500 roasts!). It also links all cupping data—close to 400 scored cuppings to date. To quote The Martian, Cropster enables us to “science the sh*t” out of the roasting process.

The vision of our Vertical Sourcing program was to maximize the income our communities could receive from coffee. To accomplish that, we had two key goals: to help our farmer-partners better understand the product they were creating (most had never even tasted the fruits of their labor) and to add value to their product by enabling them to take on more of the processing steps previously done by others further up the value chain, including dry-milling and sorting beans by size and quality. In the early stages, that meant some strategic, direct investment on our part. It also means a lot of collaborative problem solving, like sourcing bicycle-powered de-pulpers, or figuring out how to get electricity to the dry mill. 

One of the most important things we do to support farmers is to commit to our purchasing contracts pre-harvest. This provides stability and predictability in the notorious risky business of agriculture. Coffeebar purchase contracts are always at a premium. 

Farmers can receive as much as double when they sell to us, pushing more money into their communities. For example, farmers in La Suiza (stay tuned for more on this amazing community in upcoming blogs) earn $2.08 a pound selling to us, compared to a street price of $1.04-$1.47. With our current purchase contract of 15,000 pounds that equates to $31,200 going into that community, as compared to $15,600-$22,100 at street prices.

 

State of the caffeination

 

Thanks to your support of our stores, we’re increasing our purchasing and investment in farmers around the world. We’re signing larger pre-harvest green coffee contracts. We’re working with developing communities to enable them to achieve single origin level, which increases their earning potential and expands their market. We’re helping to build a micro loan program to provide needed capital. 

 

 

 

We’ve also invested in importers who have year-round presence in origin communities and share our values. Traditionally, importers have not been part of the communities where they do business, and connecting these two links in the chain helps ensure closer relationships, resulting in more local-economy impact. Similarly, exporters facilitate some of these connections and take charge of shipping logistics to ensure the coffee arrives in a timely manner; our collaboration helps ensure that they thrive as well. These unsung coffee heroes deserve to be mentioned too, so our coffee packaging includes the international “Partnership Chain” on it, to connect the dots for our customers.

Sometimes our investments are not strictly coffee-centric. In Uganda, we’ve helped support the schools in one of our coffee communities. Gerald Mbabazi, the director of Gorilla Summit Coffee Development Ltd., of our partners there, wrote in a touching letter, 

“I would like to thank you for supporting us. You have really stood with us at times when we had no hope; you gave us a reason to be better and stay true to empowering the community by buying our coffee and advising us on processing.”

Still, we’re the first to acknowledge that there’s much work to be done. Our Vertical Sourcing projects are further ahead in Guatemala and Uganda than we are in countries like Thailand, Burundi, and Colombia. Each coffee community faces its own unique challenges. 

 

Connecting the dots

 

Showing up regularly makes the difference. We’ve gradually developed a bond of trust with our coffee farmers. We aren’t swooping in to “save” coffee communities, but getting to know them, partnering with them, and developing shared goals and priorities. Our COO John describes Vertical Sourcing as ‘responsibility through intimacy.’ There’s no substitute for being there—for bearing witness to the challenges our partners face, offering support but not presuming we have all the answers. 

To help connect the dots here in Reno, we’ve taken Coffeebar team members on origin trips. (More on that in John’s upcoming blog!) And dots connect both ways. La Suiza now has a local who can cup coffee to the same standards as we practice, which helps farmers understand what coffee made from better-quality beans tastes like—which in turn inspires their efforts. 

 

 

While origin trips have virtually ground to a halt during Covid, we’re starting to get back out there to our coffee communities. And even with the added complexity of Covid protocols, I made it to Manuel’s birthday party in Guatemala, where I’m happy to say that our farmers have been staying remarkably healthy.

We can finally say that we have a true connection to our coffee now—or perhaps we should say, connections. Just as the names and faces of our guests have become familiar and loved, we now know the names and faces of our farmers, importers, and exporters. We hope you’ll think of them as your extended family, too. 

It could make for some pretty big birthday parties.

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