“A goal without a plan is just a wish.” – Antoine de Saint-Exupéry
To the people who know me best, initially I did not excel at planning in any capacity. It just never instinctively came naturally to me. I just wanted things to just happen, and I would roll with it whatever unfolded. Also, in my teenage years (like many) procrastination felt either like my best friend or my middle name. For those who cared about me the most, they had to watch as I struggled to navigate even the simplest challenges of daily life. As you grow and mature, you often reach a point where adult responsibilities peak, and your options feel narrowed. For the benefit of yourself and those around you, it is necessary to embrace significant life changes. That is when I decided to step up and commit to learning how to plan effectively. Call it, determining ‘life goals’. Before I worked at Caravela, I was a coffee roaster at some of the best quality focused specialty coffee companies Australia has to offer. I have witnessed firsthand how quickly things can spiral out of control when careful planning and forecasting are not prioritized, leading to significant stress and challenges. In those days, and even now, daily exercise has taught me the importance of completing the stress cycle and finding ways to decompress. I also learned a valuable lesson from my father, who often reminded me, “Failing to plan is planning to fail,” he would say with a blend of eloquence and the earnest seriousness only a father can deliver.
For nearly 25 years at Caravela, we have emphasized the importance of the term "supply agreement." It is a concept that encompasses much more than simply forward contracting or invoicing inventory under a pre-arranged mutual agreement between an exporter and a roaster. The backend narrative of coming to forward supply decisions requires the effort of more than two or four groups of professional individuals working collectively and collaborating to reach common goals. The term itself does not give justice to the tireless efforts involved in the procurement process of samples, cupping sessions, data logging, meticulous forecasting and back-and-forth to reach a repeatable final verdict. We believe this term represents a key goal Caravela strives to achieve with its partners: collaborating with like-minded, quality-driven producers and roasters to consistently deliver exceptional Latin American coffees that inspire excitement and delight, time and time again!
As I write this post, coffee futures prices have reached a 47-year high, creating a market crisis comparable to a category 5 hurricane. This has had a profound impact, particularly on roasters who have avoided planning ahead, opting instead for a "wait and see" approach. Phrases like "she’ll be right" may feel reassuring, but without locking in prices and securing inventory for the future, such complacency leaves businesses vulnerable to unpredictable market shocks.
Caravela's model allows for an undying unapologetic desire from our team to add value, to reveal that we are as passionate and driven about your roasting program and customers as you are. We want to see you adding value to your retail and or wholesale community and loving the process from start to finish. To see a producer group or a single-farmer lot highlighted is a wonderful thing. The icing on the cake is seeing a purchase go beyond a one- off window shop retail therapy experience and evolve into a consistent, repeatable ongoing partnership where real exchanges make career highlight memories for all. For all the above to happen, we need to learn and embrace the ‘grand plan.’
The Australian market often relies on spot offerings for several valid reasons—convenience, immediate access to coffee, and a practical solution to bridge inventory gaps (serving as a form of insurance or fall back for some businesses). Throw in Australia’s location and remoteness from the tropics and it is understandable why most roasters have at one time, or another dipped into some spot supply. The hard truth, especially in today’s volatile market, is that relying solely on spot coffee purchasing is not a sustainable strategy. The reality has become clear: relying solely on spot buying is no longer a viable strategy. Instead, businesses should pause, reflect, and take a structured approach—forecasting usage, understanding costs relative to overheads, and setting realistic margin goals. Careful planning and honest assessment are essential to maintain financial stability and growth. Interestingly, this mirrors the approach of our PECA team at origin, who help and serve farmers achieve profitability by asking tough questions, planning strategically, and maximizing each harvest for long-term success.
We are not opposed to spot purchases—in fact, we strive to maintain a curated list of seasonal, diverse coffees throughout the year. However, a recent success story highlights how some roasters have transformed their approach by securing high-quality green coffee through 2–3-year contracts, whether fixed or differential. By committing upfront and allowing Caravela to handle efficient fulfillment, these roasters have avoided the exhausting annual price wars, achieving greater stability through ‘fixed costs’ and peace of mind. It has been a game-changer for all involved.
Roasters who previously relied on spot purchasing or short-term forward contracts (e.g., three-month increments) have realized the benefits of long-term planning, forecasting volumes, and committing to extended contracts. This strategy grants access to exclusive producer partnerships, ensures the sustainability of specialty coffee, and locks in competitive fixed pricing, which safeguards profit margins. For producer partners, it provides a stable and predictable income, fostering direct and meaningful collaboration that enhances both quality and reliability in the coffee supply chain. By establishing forward bookings, the process becomes more streamlined, creating a sense of confidence and ease in securing quality coffee. This shift benefits both the roaster and the producers, fostering long-term success and stability.
We have observed over the years a consistent trend taking place. When roasters give themselves the time to pause, carefully consider, forecast, and communicate their volume needs efficiently, they all grow.
It is important to note that these established long-term supply agreements directly benefit our beloved producers and producer groups at origin. The role that roasters can and do play is pivotal to producers’ progression, as it can dictate whether growers are able to improve processing methods, upgrade equipment, plant more trees and even in some cases purchase more land and expand their production capacity and quality.
Spot purchasing has its value and purpose, but it comes with unpredictability, risk, and less cost-efficiency. Given the volatile nature of 2024, it is clear that relying on it more than necessary is something I am sure we would like to prefer to avoid.
Long-term, purposeful supply agreements are integral and safer overall. For those who understand the value of sustainable partnerships—supply agreements are the foundation of serious, impactful green coffee collaborations. They positively influence every link in the global coffee supply chain.
If reading this has left you feeling overwhelmed, confused, or even frustrated about the current market situation—and you are questioning your inventory forecasting and planning—take a step towards clarity. Reach out to a member of our sales team for guidance on forward booking and creating long-term supply agreements. We will help transform your green coffee program, giving you the confidence and knowledge to navigate through the market with ease.