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September 17, 2020       4.5 Minute Read


A Primer on Transparency + Traceability (Part I)

Transparency and traceability  are currently some of the most common topics talked about by roasters, green coffee buyers, importers, exporters and even consumers!

For me, transparency in the specialty coffee supply chain means that if I buy a cup of coffee for $5, that I can account for who receives every one of those 500 pennies that I spent.” Brian Gaffney – coffee enthusiast.

When discussing transparency and traceability (T+T), we are talking about the history of the coffee, who produced it, and how much the grower received for that coffee. Specific information such as farmgate prices and costs, as well as the information for each grower who contributed to the coffee, the quantity delivered and quality. This information can be presented and understood in a variety of ways. When you purchase, sell, and move coffee year-round, regardless of the amount, it requires a strong system in place in order to keep track of the producers, lots, prices, quantities and qualities. While difficult, this is something that is achievable by companies that have transparency and traceability ingrained in their principles, as demonstrated by established systems and protocols. For this information to be presented properly, the whole structure of the purchasing and processing processes must be fully traceable and transparent, from the farm to the roasters warehouse.

So, what are the most important questions that you want answered when talking about transparency and traceability:

  • What specific information are you looking for?
    • How much is the producer getting paid?
    • Which costs are involved?
    • How much is your importing /exporting partner getting?
    • How does the price paid to the farmer translate into green (FOB or EXW)?
    • How do exchange rates influence the prices producers get?
    • What’s the comparison between what the producer is getting and what the market is offering?
    • What is the value of each dollar in each country’s context?
    • How are you benefitting the producer?
  • Why do you need it?
    • Is this an audit system, a way of learning, a way of connecting, a method of evaluating the viability of relationships and projects?
    • Learn how are you impacting the lives of the coffee producers you’re partnering with?
  • How accurate is the information are you receiving? Which basically translates into, has your partner proved that you can trust what they say?

We have known for a while that our coffee industry is not all rainbows and free-flowing information. Seeing and expecting to receive truthful information has become more of a fight than a conversation . It has also shown that there is a LOT that needs to be learnt first to properly translate, analyze, and understand the data received.

One should be able – and have the right – to both request these details and know where the information is coming from. But I also think that transparency and traceability should be a two-way street. Are you willing to answer to the same questions you are asking?

Information is a powerful tool; it creates a lot of opportunities. As a roaster you can ensure that your ethos of paying more to producers according to quality is being realized, account for producers and correlate their deliveries into the coffees you purchased so you can discover new producers and new relationships, and even undertake special projects with those producers.  Bear in mind that part of the goals and structural basis of specialty coffee is rewarding producers and opening opportunities for them to sell their products better. For roasters, to have access to better quality and consistency, as well as a greater amount of information so that roasters can better tell the story to consumers.

 

Key Points

In a recent webinar we focused on understanding the views about Transparency and Traceability from different coffee roasters. It turns out that roasters and producers’ needs are more aligned than you think. Below are some key points that came out of the webinar:

  • Diversification is one of the foundations for both coffee growers and roasters to be resilient. Having flexibility, and different qualities that can be used for different markets brings more certainty and stability for both. Each one needs updated information on what they deliver / receive, respectively, and it can change the way they see business and therefore make business decisions that ultimately will lead them to thrive or fail.
  • For roasters, transparency and traceability are important for both internal and external communication purposes. Roasters may use this information to measure themselves and their impact on the lives of coffee farmers, the price they paid and track consistency from year to year. In addition, this information is crucial to roasters for marketing and communication purposes, so they can share stories with consumers and, most importantly, answer customers’ questions.
  • For producers, being able to receive timely feedback about the quality and consistency of their coffee is key to ensuring the kinds of continual improvements that will lead to long-term relationships, as well as informed decision-making in to adjust to the needs of their specific market. T+T brings the customer closer to the producer, revealing a wider picture of how the industry is (or isn’t) working, what are customer’s interests and how they can achieve those results without increasing their risk. This is life-changing for the producers and their livelihoods.
  • Information sharing, the capability to observe, obtain data, and analyze it are key to understanding each other better. Respecting and approaching the relationships as well as business is fundamental to reach the next level into sustainability and profitability inside the coffee industry. We need to approach the conversation, measure it, and not be afraid to respectfully talk about it. try and build it with your partners, be they producers, exporters or importers, it should be a key stone of your company and therefore direct how it operates.
  • It is a common misunderstanding to think that you don’t need T+T from a producer who is exporting. Consider that this information is crucial, given that farms which are large enough to export coffee by themselves may also be purchasing coffee from their neighbors. T+T includes valuable information regarding the internal dynamics of a farm if you know how to look for it.
  • Companies that implement the T+T structure as a guiding principle tend to be more organized and adaptive to change. If collecting T+T information is part of your “audit system”, this information can be used for strictly internal purposes, or can presented to the end customer in a ‘digested’ way that is easier to understand.

 

Transparency and traceability create and sustain trust on top of the company’s ethos and can lead to consistent, long-lasting relationships, not only between suppliers and coffee farmers, but with customers and consumers. In conclusion, transparency and traceability have the power to improve coffee, and it is crucial that at least one segment of the supply chain does it to make the industry more sustainable as a whole.

 

In Part 2, which we will publish next week, we will focus on some first steps that you need to take to establish a T+T program in your coffee company, plus how we approach T+T at Caravela.

 

Watch the recording of last week’s webinar “Transparency and Traceability in the Coffee Industry”

 

 

 

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