3.5 Minute Read

Badi Bradley
North America Sales Director

An Opportunity

Caravela Coffee (initially known as Virmax Café) started as a Colombian coffee exporter. For the first nine years, we worked according to our purchasing model: buying coffee directly from small producers, based on quality. We then sold the coffee to roasters, either on an FOB basis (allowing them to choose their preferred importer to provide freight and import services), or to importers, who would then sell it on to their roaster clientele. The importers provided value by having coffee to sell, and the price was determined by the importer’s ability to create the market. Absent from this arrangement was an emphasis on strong relationships with producers; as the marketplace evolved, roasters increasingly wanted to know more details about the producers whose coffee they were buying, including how much these producers were being paid.

A New Kind of Importer

We sensed a chance to create a new kind of coffee importer, one that facilitates relationships between small coffee producers and coffee roasters, based on the principles of transparency and traceability. In the Information Age, there should be no barriers to information access, and we should respect as equal business partners the people who produce the crop we trade. Enter Caravela Coffee as a North American importer in 2010; vertically-integrated, but origin-focused. In this concept, the import functions as a service, not as a profit center. While some direct trade models require the roaster to buy the coffee up front and take the quality risk, Caravela assumes the quality and price risks to bring the coffee from origin to destination. We stand by the quality of the coffee and are ready to find solutions should a problem arise. Last but not least, we provide the financing mechanism to allow roasters to release coffee from their inventory as required by their production work flow and their business cash flow. Our pricing model starts with the amount we pay the producer for the quality of coffee that they deliver and is built from there; this means that most of our value is generated on the origin side.

Serving the Other Customer

Creating this model has allowed us to focus much of our efforts on serving our other customers, the coffee producers. The technical assistance provided by our PECA teams, the Siembra y Cosecha program, farmer field schools, and our virtual classrooms are examples of ways that we provide the resources that producers can use to improve the quality of their coffee and productivity of their farms and ultimately their livelihoods. It is hard to overstate the importance of the work that PECA teams perform in the origin countries where we operate. The constant feedback and education that the agronomists give the producers is the fast-track to improving their crops, yields and flavor in an industry that can take years to see changes in the cup.

On the import side, facilitating origin visits ensures that education flows from producers to roasters, too; there is little substitute for discussing challenges, expressing hopes, and celebrating success with partners face to face. We also organize events like the Belgravia Experimental Series, taking controlled cuppings from Finca Belgravia (our farm in Popayan, Colombia) to customers across the globe, then quickly channeling the observations and preferences of coffee professionals back to our origin teams and on to producers. Teaching coffee growers how to incorporate best practices gleaned from green buyer feedback into their daily routines is one example of how powerful the Caravela model can be.

The Choice

Caravela’s prices in the specialty market are competitive - frequently the same or less than alternatives, yet there is an enormous amount of work on the origin side that is included in that price. Roasters direct where (and how) they want their influence to be felt via their purchasing dollars; the ability for that influence to act as an investment in the future of the specialty coffee supply chain is a compelling value proposition.

Caravela Coffee is a different kind of coffee importer, indeed a different kind of coffee company: complicated and complex, but no more so than the modern specialty markets (at destination and origin) it strives to serve. Once you see the impact that the Caravela model can have on the lives of smallholder producers in Latin America, it becomes a little simpler.