Living our Values 2018

Download the CCS Living Our Values 2018 Report

Yes, it is that time of year already, annual report time! Before we all begin the festivities in earnest, we invite you to read our report, CCS Living Our Values 2018.

This year every member of the CCS team contributed a reflection, report or update from their field of expertise, assessing how well we have worked according to the values we hold as a company.

The CCS Living Our Values 2018 report includes our first Transparency Report. This document features every lot of coffee stripped in to our warehouses between January 1st and December 6th this year. Details include the quantity of coffee purchased, the export partner involved, the FOB paid, the cost of transport financing and insurance, and the CCS markup on that lot before discounts. We are acutely aware of the shortcomings of the FOB, there is so much it fails to communicate, but as we have discussed in this forum, it is the number we consistently have for every coffee, and we must begin our transparency journey somewhere.

We encourage feedback and discussion about any of the topics raised in this report. If you would like to talk to us about it, please email us.

Transparency is hard

“No one is crying for the poor Napa Valley vineyard owner,” said Peter W. Roberts, speaking at the Transparent Trade Coffee Colloquium in Hamburg late last month. Peter is a professor at the Goizueta Business School, Emory University and he began his academic career investigating the wine market, which he says functions well. 

“Markets work best when there is a lot of information, and a lot of opportunity,” Peter explained. “A vineyard owner can deliver their grapes to the back door of a winemaker, then walk around to the front door to find out how much their wine sells for,” he explained. As a result, “Napa Valley vineyard owners are paid well. Coffee farmers are not.” 

Several industry veterans attended the colloquium, including Peter Dupont of Coffee Collective, Geoff Watts of Intelligencia and Mark Dundon of Seven Seeds Coffee. All agreed that after 20 years working in this business, little has changed for coffee producers. They still struggle to make a living, they work at the mercy of the market, and they remain at the bottom of the supply chain, with no power to change their situation. 

Part of the solution is to increase the amount of information available, or in other words, increase transparency. “Get roasters to origin. Get farmers to places where coffee is sold,” Peter W. Roberts suggested. And, when this is not possible (and it rarely is), those of us working in green coffee purchasing need to be the conduit of information, providing negotiating power to producers, the kind enjoyed by Napa Valley vineyard owners.

Sounds easy enough. So why is it so hard? 
 

The barriers to transparency in a long and complicated supply chain are many, but we have to try anyway. 

BARRIERS TO TRANSPARENCY: Business and competition

The first and most obvious obstacle is business. Sharing sensitive financial data makes us uncomfortable as it could negatively impact our bottom line. Will customers complain when they see the margin we earn for our labor? Will our competitors use that information to steal our precious coffees by offering producers slightly more than we pay? 

These are valid concerns and highly probable scenarios. The only defense against them is trust, the kind of comes from long term and mutually beneficial relationships. Customers must trust the work we do and the value we add. Producers must trust us to come back to buy the coffee year after year, which would make it less attractive to sell at a higher price to a one-off buyer. We must also welcome the competition and pay higher prices, trusting our customers, and their customers, will be willing to pay extra too. 
 

BARRIERS TO TRANSPARENCY: Which number do we share?

Percentage above… 
You may have seen claims like “we pay an average of 20% above,” “twice the market price,” or some other multiplication of the C-Price. This is an easy way to contextualize the high prices paid for specialty coffee, and we admit to doing something similar ourselves. But it is a fundamentally flawed comparison because, as most in the specialty industry would agree, the commodities market is a flawed system. 

FOB
The most common number shared by specialty coffee companies who practice transparency is the FOB. This stands for Free On Board and it represents the price paid by the importer to get the coffee out of the country. Consider it the moment the crane carries the container of coffee from the dock to the ship.   

The reason the FOB is the most commonly shared number is because it is the number those of us working in the markets know and can verify. As importers, this is the price CCS pays for the coffee, and we can prove it with our purchase contracts. 

The problem with the FOB is that it says little about how much the producer was paid. Included in the FOB price are many additional costs, such as milling, storage and transportation. There may also be an exporter’s fee, which covers their work in sourcing the coffees, supporting and training the teams that cup these coffees, possibly paying agronomists who advise the producers. Often it includes origin country taxes and insurance. 

Return to Origin (RTO)
Based on the FOB, several roasters have begun publishing percentage they call Return to Origin, or RTO. This is the FOB as a percentage of the final cost of roasted coffee. A 20% RTO means that 20% of the final price of that roasted coffee was paid to people in the country where that coffee was cultivated. 

This is an interesting initiative, and hats off to the roasters who use it. However, the risk of publishing the RTO as a percentage is that a higher percentage looks better, it suggests more money in the pockets of people at origin, but that isn’t always true. It really depends on the final price of the roasted coffee; 10% of a high-priced coffee might mean more money than 20% of a cheaper coffee.  

FOT
Free on Truck (FOT) is the amount paid when the coffee is transferred to a truck for transport, and it is hard to know if this was paid to a producer, or another actor along the supply chain. FOT might be paid to a farmer, but it is more likely it was paid to a washing station, dry mill or exporter who must then transport the coffee to port.

Farm Gate
A more accurate reflection of what a farmer earned is called the Farm Gate price. This is the price paid the moment the coffee was transferred from the hands of the producer. Once again we encounter problems with this figure. 

Firstly, the Farm Gate  price is almost never the price paid for green coffee, as producers usually deliver cherries or parchment. Calculating the price paid for green coffee based on the Farm Gate is complicated by a number of different factors, all of which impact the amount of green coffee derived from the delivery. Even when the producer is delivering dry parchment, coffee in its final state before milling, there is no easy equation to calculate the amount of green coffee purchased. This depends on the yield factor, which is the amount of green coffee produced after waste from parchment and any impurities like stones and sticks is discarded. As you can imagine, the yield factor can vary from lot to lot. 

Each step in processing coffees carries with it loss and risk. The loss is in the form of cascara, pulp, humidity and parchment. The risk is that something goes wrong during processing that could impact the quality of the coffee, lowering its value. The more loss and risk a producer carries, the more they are paid for the product they deliver. This makes it almost impossible to compare a Farm Gate price paid to a producer in Colombia, who processed their own coffee and sold it as dry parchment, to a Farm Gate price paid to a producer in Ethiopia, who sold fresh cherries to a washing station. 

Similarly, it is difficult to compare these numbers without understanding the cost of production in each origin. And imagine the producer delivered their coffee over a series of weeks, with differing yield factors, price fluctuations and changing currency valuations. 

The calculations get complicated.
 

LACK OF CONTEXT

The biggest obstacle to transparency is context. A single number can not communicate the long and complicated supply chain of coffee, and the costs associated with delivering it. Nor can it account for variations in cost of production, cost of living, currency fluctuations or volumes produced.    

There are efforts to improve this. Colombian coffee exporters, Azahar, presented data to those gathered in Hamburg from their own study into providing their producers with a living wage. Working with 100 farms in three departments in Colombia, they determined three price points for a carga (125kg) of parchment, which is how most Colombian producers sell their coffee. The three price points indicated the price Azahar needed to pay in order to:

1. Meet the poverty line 
2. Meet the minimum wage in Colombia
3. Meet the minimum wage, plus enough extra to reinvest in developing the farm.

The fourth column, which contained only question marks, asked “How can we do better?”

This data goes a long way to contextualize the Farm Gate price, and is a great potential model for other companies buying green coffee. However, for now, its scope is limited. 

MARKETING TRANSPARENCY

“Transparency is not marketing,” Peter Dupont noted, “but we do need to market these numbers better.” 

Our customers do not have time to investigate the supply chain of every product they buy, they need at-a-glance information in order to make their purchase decision. This is something Fair Trade understands well. 

More importantly, consumers need to believe transparency matters.
 

No profit in transparency, yet

Operating transparently requires an enormous amount of work. It means asking everyone in the supply chain to keep and share detailed financial documents, which need to be understood, analyzed, distilled, then formatted, packaged and communicated to customers. It means research into local economies to provide context for these numbers. 

It is difficult for small specialty coffee companies to justify the additional expense unless the customer is willing to pay for it.

This is the crucial link in the transparency chain. We must convince customers to demand transparency, even if they don’t have the time to analyze and understand the data we provide them. “Ultimately, no one will choose to pay producers more for coffee,” Peter W. Roberts said, “the market has to force it.” 

For transparency to make business sense, we need to convince consumers to ask:

1. "How much was the farmer paid?"
and
2. "Is that enough for them to live?" 

If enough consumers ask, everyone in the supply chain will make it a priority to find the answers.
 

Share what you have

The overwhelming agreement in the few days spent in Hamburg was that transparency can’t wait until we have perfect data.

“We have to start somewhere,” Peter Dupont added, “then push the conversation forward,” even if that means we start with the FOB.

Professor Peter W. Roberts is working on research to strengthen transparency in specialty coffee, but even he noted “we can’t ask you to share data you don’t have.” 

This is the reason the research to create a Data Backed Transaction Guide for the Specialty Coffee Market will begin with the FOB. It is an imperfect number, but it is the one we all have and can verify. The hope is that the breadth of the data in this pilot study will be robust enough to encourage further research into producing better numbers. 
 

TRANSPARENCY AT CCS

Transparency is one of our core values, and yet we have struggled, as have so many companies in specialty coffee, with all of the above issues. In the past we have shared the FOB of the coffees we buy with our customers, but we have not published them for fear of misrepresenting what the farmer is earning for that coffee. 

We have been pushing for better data, from our producers and from our partners. We are trying to contextualize the prices paid for specialty coffee with the cost of producing such high quality. We have an initiative to source better data and create a methodology for people at origin to do this on a regular basis. Plus, we will be data donors for the Data Backed Transaction Guide mentioned above. 

And, from today, in the spirit of the Hamburg colloquium, we will start with what we have. Below you will find the FOB of all coffees we have purchased so far in 2018. You can also find them on the origins pages on our website. We will do this for all coffees we purchase from now on. 
 

FOB of CCS Selection, 2018

Kenya
Ethiopia
Colombia
Guatemala

CONTEXT

The FOB represents the price we pay our export partners at origin. To calculate the cost we charge to roasters, we add the following:  

1. Financing and logistics, on average USD $0.3/lb
   (USD $0.4/lb for inland coffees such as Burundi).
   We work with financing partners as we are an independent sourcing company without the capital to finance coffee. Logistics covers shipping, insurance and other costs to transport coffee from ports at origin to our warehouses located in Oslo, Hamburg, New Jersey and Oakland. This price is only for full containers. When we ship smaller quantities of coffee, like from Panama for example, financing and logistics costs are much higher. 
2. Our markup to cover our costs.
   The markup varies, depending on the FOB, volumes purchased, and the need to remain competitive in the market. For example, we take a lower margin on our most expensive coffees. On average, in 2018, our markup is 20%.  

So the equation for all origins, except Burundi, looks something like this:

Price to roasters per pound = (FOB + US$0.3) x 1.2
Price to roasters per kilo = (FOB + US$0.66) x 1.2

The equation for Burundi looks something like this:

Price to roasters per pound = (FOB + US$0.4) x 1.2
Price to roasters per kilo = (FOB + US$0.88) x 1.2

Please remember, these are averages. 
 

Push the conversation forward

“It’s not necessary to go from zero to one hundred in the first try,” said Meredith Taylor, Sustainability Manager for at Counter Culture. Their first transparency report included data on twelve coffee contracts. Now they publish details on over 300. 

Publishing the FOB of all coffees purchased in 2018 is, perhaps, starting at five. Meanwhile we, and many of our colleagues in the industry, are working towards delivering one hundred. 

Do you want to be part of the conversation about transparency in coffee? Share your thoughts below, and join the Transparency in Coffee Facebook Group. 

The cost of producing specialty Coffee - Part 1

As an industry we talk about FOB prices, contextualising these figures by describing them in relation to the C-Price or Fair Trade Price Floor. However these numbers don't reflect what farmers actually earn, or what they have to invest to produce coffee of such high quality. 

Most of us are aware that producing specialty coffee requires a greater investment from the producer, but knowing exactly how much is hard to calculate. 

Colombian producer, Maria Bercelia Martinez, was an entrepreneur before she was a coffee producer, and her daughter graduated university with an accounting degree. She keeps detailed accounts of her expenses for her farm, Finca Los Angeles, in Acevedo, Huila, and she has very generously compiled and shared some financial information with us. This data, in the downloadable spreadsheet below, provides an insight into the kind of investment required to produce specialty grade coffee. 

Maria Bercelia Martinez is a unique producer. Almost 70% of the coffee she cultivates achieves scores of 86 or higher, which is a remarkable achievement. But she admits that she is struggling to make ends meet. The costs of production are increasing, but the price paid for coffee does not reflect this. 
 

Maria Bercelia's biggest expenses

Picking
The number one expense is picking coffee. Maria Bercelia pays her pickers 5000 Colombian Pesos (COP) per arroba (12.5kg), plus the family provide food and accommodation. Maria told me the salary of pickers has more than doubled in the last two years, and finding trained pickers who know how to select only the ripe cherries is a challenge for all producers of specialty coffee in her region. 

The cost of food increased significantly in the last two years, something I can attest to from personal experience, having lived in Colombia from 2011 until early this year. This is due to two main factors. Firstly the country was hit by a drought two years ago. Secondly, the Colombian peso lost over 40% of its value in a six month period in 2014/2015, which caused high inflation and an increase in the cost of living. This impacts Maria Bercelia's costs of production, as she offers food in addition to the pickers' wages, rather than subtracting the cost of food from their salary. 

Inputs
This sudden devaluation of the peso also significantly increased the cost of inputs like fertilizers and fungicides (to fight the ever-present threat of coffee leaf rust), which are imported, or use imported ingredients. 

Drying
Drying coffee while maintaining quality is a slow and involved process. On Maria Bercelia's farm, the coffee spends four to six days in a second story drying bed with a plastic canopy and walls that can be raised to allow airflow, and closed when it rains. The coffee is then moved to a series of raised drying beds. During this process the coffee is moved every couple of hours, depending on humidity, to ensure even drying. This is also the period when the parchment coffee is carefully hand-sorted to remove any contaminants and less than perfect beans, a time-consuming task. 
 

Caveat

The financial information in this spreadsheet was provided by one producer, working on one farm. It is not meant to be representative of all farmers working in specialty coffee, or even all farmers in her region. We do not present this information as verified data, it is self-reported financial information reported directly to us. The estimated day-rates of labor are Maria Bercelia's. The estimated cost in USD is based on an average conversion of COP to USD for the December 2017 to May 2018 period in which Maria Bercelia was paid for her coffee.  
 

Not included in this document

There are many costs that are not included in this spreadsheet, including the cost of purchasing land, setting up the farm, buying the seedlings, planting trees, building worker accommodation, or the interest Maria Bercelia must pay on the loan she took to keep the farm running when Colombia's coffee prices plummeted. These costs should be considered as part of the cost of production, and without them we decided not to calculate a cost of production per kilogram in the spreadsheet below. 
 

Why share this information?

Despite its omissions, this is detailed financial information that can enlighten those of use who work in specialty coffee, but don't spend our days on a farm. We see this document as a crucial starting point for a discussion about specialty coffee prices, in Colombia and beyond. Maria Bercelia, and most farmers we have spoken to in the region, all question why the price paid for specialty is linked to the C-Price, and does not reflect the cost of production. For farmers like Maria Bercelia, the latter has significantly increased in recent years while the price they earn for their coffee has not. 

Next week we will publish data of Maria's production, and the prices she was paid for her coffee from the recent 2017/2018 harvest. Sign up for our newsletter if you would like to be notified when Part 2 of this blog post is live. 

We welcome your thoughts, opinions, concerns and ideas. Please leave us a comment below.  

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Download the document: Production Costs, Finca Los Angeles. 

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Living Our Values 2017

It’s that time of year when we pause to review our past and plan for our future. At CCS, we have taken this time to consider why this company was founded, its successes and frustrations, and our hopes for the coming years.

The report, “Collaborative Coffee Source, Living Our Values 2017,” is an attempt to highlight the work we are doing to achieve our mission to “source the right coffee, the right way.”

With this document we aim to hold ourselves accountable to our producers, partners, and customers, and everyone working in specialty coffee.

Before the end-of-year celebrations begin in earnest, we hope you find a moment to read this report. We invite you to question, comment and respond. Please email us at info@collaborativecoffeesource.com with your thoughts.

Read the report: Collaborative Coffee Source, Living Our Values 2017

Burundi 2017 Harvest Shipping Soon

It's been so great to see the continuous build of up anticipation for our Burundi coffees year-after-year. When we first started working with this origin in 2012, finding roasters willing to take a chance on this new origin was challenging. And with good reason: it was relatively unknown as a place, let alone as an origin of exciting and quality coffees. On top of this, what little has been known about Burundian coffee has been impacted by the reality of the potato defect, which over time, has been intensively fought with every kind of control measure team Long Miles could think to throw at it. They perform meticulous black light scans of every lot pre-export, and Epaphras Ndikumana, ingenious planner and leader of Long Miles' farmer extension programs, even organized antestia bug hunts.

As our first containers of the recent Burundi harvest make their way to Mombasa port en route to New Jersey and Antwerp, we wanted to provide some context as to why the timeline for this year's arrivals is seemingly "later" than last year. The first thing to note is that the shipments are not actually departing late: everyone involved in the making of this year's lots have been working as diligently as possible; there have simply been forces at play that have been working against earlier shipment dates.

A Longer Harvest Period

Harvest typically begins in March and ends in late-May to the early-June. This year harvest started in April and went all the way to mid-July. This wasn't true across the board -- there were other washing stations and areas that had more of a "regular" harvest period. The difference? Politics.

While Burundi's coffee sector has officially allowed for private enterprise since the late-80s to early-90s, in practice it has been bureaucratically difficult to conduct business as a coffee entrepreneur. Corruption is rife and policy changes are often unforeseeable.
 

Disruptive Coffee Policy

There were two policy changes in particular that had devastating consequences for farmers growing in communities not supported by government interests:

1. The government's halting of fertilizer imports to select areas, including the communities delivering cherries to Long Miles' washing stations. The main consequence of this was that the soil became too acidic for the plants to properly develop their cherries and the sub-consequence of that was uneven cherry development, leading to a longer harvest period.
2. The removal of collection points.
   • Collection points are key for Burundi farmers because very few have motorized means of transport and deliver cherries by foot to washing stations.
   • As a result of the banning of collection points, many farmers (most of them women, like the woman in the photo above) walked up to 15km (30km round trip) [corrected from an earlier version describing a 30km one-way trip] to a Long Miles station in order to continue working with their team. Imagine walking 15km one-way with a bag of between 40-50kg bag of cherries on your head, once every week (not to mention the long walk back).

Usually when I come to make selections in June, I'm presented with pretty well all the top lots that will be available for that given season. Given that my visit this year took place in the midst ofharvest, many of the coffees that the team had planned to be ready simply weren't, meaning many of the selections took place via Long Miles' Picasso Nduwayo (Quality Control Manager) and his team sending batches of samples as quickly as they could be taken off their drying beds, to our Oslo lab for approval. By far a much more tedious and drawn out way of purchasing coffee.

Nonetheless, both Long Miles and CCS are pleased and excited about this year's selections. The Long Miles Team have once again outdone themselves and it is starkly evident that the communities in which they work are hugely supportive and believe in this project. How else do you explain a farmer choosing to walk 15km, past other washing stations, to sell her cherries?

Demand for these coffees have been very high. 90% of the first container coming to Antwerp has been pre-sold and so with that, we've decided to bring in a second container to the EU.

The first two containers, bound for Antwerp and New Jersey, are at Mombasa port and are scheduled for departure on December 9th, meaning a mid-January arrival.

Get in touch with Nicolas (EU & Asia) and Sal (North America) for availability and samples.

Melanie

Santa Barbara, Honduras 2017

Neptaly Bautista: an early CCS partner in Santa Barbara

Field Reports from early and late harvest visits

This is an intro and a comment to what CCS is doing in Santa Barbara. As we are celebrating our 12th+ year of working in this region we are assessing some experiences and looking ahead; at how we want work here going forward.

CCS is making such a direct impact in this community like nowhere else I can think of. Our position is strong, which comes with great responsibility. One that I do not take lightly. It is really humbling. Our deeds are seen and our words are heard. Any temptation to give suggestions to a farmer-friend must be well thought through before it is said, or else, before you know it, what you said will be done.

These partnerships have fortunately been mutually beneficial. Yields have never been higher and the quality has never been better. That is of course not to our credit and is thanks to hard work from the people that live and breathe in Santa Barbara.

There is no mistake: Buying is Power. It has always been like that in this business and continues to be the case. CCS’ buying-power is evident in Santa Barbara, which is important for the things we want to achieve with San Vicente. This is a fact that we are well aware of and is something that needs to be protected, nourished, cherished and held on to.

In the years that have passed since the beginning of our focused sourcing and concrete buying from the region began, CCS is now committing to 20 times our original volume. When looking ahead we should prepare ourselves, collaborate with our farming partners (including our exporter San Vicente), and communicate with the marketplace that we will double the current volume within the next few years; a growth that is inevitable and has been almost organic.

The Moreno family: one of CCS' strongest partnerships anywhere

How This All Began

It started with buying just a few bags from Natividad Benitez, the first-place winner of Cup of Excellence in 2005. It sparked a relationship between Natividad and MOCCA in Oslo (later MOCCA’s roasting operation became a separate roasting company: KAFFA) yet instead we found ourselves growing into relationships with some of his neighbors over the course of the next couple of years. From these humble beginnings, today we find ourselves working with 40 families — and counting — through Collaborative Coffee Source.

Santa Barbara is one of those regions that was clearly discovered and defined by the CoE program. Arturo Angel Paz of San Vicente Coffee Exporters, is a dedicated and curious coffee cupper. He met Miguel Moreno of El Cedral, an ambitious and anxious producer (he was in huge debt at the time just before the competition) when Miguel dropped off one of his samples. From this moment, these two men have been instrumental in changing the Honduran coffee scene forever: Santa Barbara has clearly developed into an appellation. Ironically today, coffee cherries from Marcala (formerly recognized as the important coffee region in Honduras) are bought to be dried in Santa Barbara.

Like so many places we are visiting and buying from, the coffee supply chain and trade has clearly separated into two tracks: commercial or specialty, which not only defines level of ambition and empowerment, but livelihood and thus, level of poverty, to be clear. The dream of most farmers in the know is to find ‘a buyer’ — un comprador — one to grow with. Coffee farming is incredibly labor intensive and the only way to make a living when one has a small farm is to work the land yourself and engaging other family members. Only when the land is larger, just like in any economy, really, can one afford the overhead cost of management.

Having pickers/workers/employees, even in countries where the cost of labor is already unsustainably low (for the worker) when paid at its minimum level, is still the main cost for making coffee. It is also the cost that farmers really experience to be their main economic challenge.

The current price of coffee, even when at levels paid for specialty coffee these days, is dependent on keeping people in poverty, or at least paying them as little as possible for a job that is not only hard and uncomfortable — but totally necessary.

So when we speak about ‘equitable’ and ‘sustainable’ business for the people, we mean everyone involved.

Pedro Sagastume (L) and his son-in-law, Edwin Pineda (R). Gen II relationships in SB

Paying up

Having responsibility suggests that one act responsibly. Our sense of ‘duty’ in these Santa Barbara communities is firm. I strongly believe that the only way to talk about the issues of ‘livelihood’ and ‘poverty’ is to acknowledge the fact that money matters — for all parties involved — and now is the time to bring it up with our suppliers in a way that is also making them feel the responsibility that they have as employers of coffee workers, many times from their own community and sometimes their neighbors.

There can be a subtle nuance between suggesting and requiring something. As much as there may be a desire to change things for what we think is better, we walk a fine line in trying not to impose our mindset. Exposing ignorance is one thing. Worse is being seen as disrespecting cultural differences and inter-relational dynamics in the communities that we - after all - visit only for a few days each year. We have to acknowledge that we don’t live our farming partners’ lives.

Still, this is the new paradigm we are working toward: This harvest/buying season we are increasing the FOB price to $4.25/4.50 per pound (hence Farm Gate pricing is increasing proportionally) as the BASE price for an 86-points lot, we are at the same time ‘asking’ that the farmers also the pay their workers: farm-workers, pickers, etc., more. It is not a condition, but this increase of 50 cts/lb from last season is meant to give the farmer/land owner/owner of the facilities/business person/ employer an opportunity to distribute some of the gains they are making in relationship with us, to their workers.

As for the farms themselves: the stories, challenges and qualities from this harvest, we’ll share these over the next few weeks as we receive the lots and distribute them to their homes all over the world. Due to the prolonged harvest season, which started in January and went all the way to June, we have visited the region more often this year and have thus selected lots from the mid-harvest point (March), which has now just landed. The lots selected from the later harvest point (June) will soon be afloat.

Follow here and our social media for more on the specific farm updates that we will present in the coming days and weeks.

Coming up in the next season, we will work closely with a team of people on the ground to improve quality even further and in all aspects of making great coffee: husbandry, picking, processing, drying and packaging.

See you soon at a cupping table near you!

- Robert W

Ethiopia: Coming Back to Cooperative Coffee

Our Previous Relationships with Cooperatives via TechnoServe

During the initial phase of Technoserve’s (TNS) work with cooperatives in Ethiopia, Kaffa in Oslo imported green coffee directly (pre-CCS) and roasted a few lots from some of the TNS supported washing stations, including Yukro, Hawa Yember and Hunda Oli.

I first got involved with some of the TNS coops during the 2009/10 season. Groups of roasters from around the word were invited, particularly from USA and Scandinavia, as they were seen as discerning buyers in viable markets. TNS was presenting their work at SCAA, SCAE and at roasting community events. These presentations weren’t really within TNS’ self-proclaimed mandate nor model, rather it was done to train and empower local representatives to learn how to market themselves.

KAFFA bought some lots but service was slow, samples hard to get, lots were sold out before one had time to provide feedback, and even if one visited to cup and buy on-site, the unions seemed to favor the ‘bigger’ roasters. When ‘dealing’ with the coops, one quickly learned that they didn’t truly have control over their products. It felt like one had to scramble to get ahold of something rather than being able to pick and choose properly, the way we’d do it in, let’s say, Kenya. Commitments were certainly not honored. It was all quite discouraging.

When I re-visited at the end of the harvest in 2012, the cooperatives were not just under-funded; they’d had little to no money just before the beginning of the harvest to pay for cherries. When I additionally learned that the harvest had been very low, I initially thought the low volume had to do with little yield per tree/farm. In reality, the low volume was due to farmers not being able to afford to deliver cherries to places that couldn't pay them up-front. This in turn meant low volumes at the washing station. Coop washing stations could only purchase as much coffee cherries as their credit line allowed them to. The irony of the TNS coops’ credit drought was that Oromia Union, their partner-in-crime, didn’t lend their coops the resources needed to buy cherries and hence, thrive. Even though customers were lined up to buy, complete dysfunction ruled at the most basic levels.

The quality management of the cherries was also poor and this related to the above economic problems. When you’re struggling to pay in the first place, you end up scrambling to get what few cherries you can afford. This is not the time to be scrutinizing the cherries’ maturity and uniformity.

Just as discouraging was the administrative and fiscal dysfunction. I wanted us to stay away as long as the Oromia Union stayed involved.

Now, five years later, the time feels right on many levels. And I’d like to take this opportunity to reflect on our previous experiences, as well as provide some background info that will hopefully be helpful to you. Full disclosure: I am “collecting” this information from memory, so bear with the fact that some of it is anecdotal.

Former TechnoServe staff, Aansha Yassin

TechnoServe’s Coffee Initiative

TechnoServe (TNS) is an NGO that was founded in 1968 and has been funded by the likes of the Bill & Melinda Gates Foundation. TNS works with development initiativesin many countries including within Africa and mostly with agro-businesses — coffee amongst others — utilizing local natural resources and human potential to create economic advantages. What I like about the Gates Foundation approach is the clearly expressed belief that making good business (product and management) is both the means and the goal. In other words, participating communities utilize what they already have – local resources and the development of community members’ own knowledge and skills – to create better economic opportunities.

In Ethiopia, the Coffee Initiative was started in 2008 with investment from the Gates Foundation. This allowed TNS to do coffee work on a large scale and in new places like Ethiopia and this particular project had a five-year mandate. One of the beautiful ideas and high ambitions of the program was to empower local people to learn about the specialty coffee field by crafting great coffee: managing it as a business; doing lot separation; assessing quality through cupping; communicating monetary value through quality; and finally, marketing and offering it to a discerning marketplace.

TNS intelligently set out to focus their efforts in the western regions of Ethiopia. This part of the country has always had a rich history in producing coffee. As far as we know, this was the birthplace of coffee. Still at the time that TNS came in, coffee from the west didn’t have fame, nor was it fetching the high prices coffees in the south were getting (such as e.g. washed Sidamo and Yirgacheffe).

The western lowlands are home to Bebeka Estate, which up until recently was the largest government owned estate farm. This estate is now owned by Mr. Al Amodi, who is also the current owner of the Horizon Dry Mill. Also located in this region, are areas such as Djimmah, which was synonymous with low grades of naturals.

Although many areas in the west do have the altitude for producing high quality coffee, the infrastructure wasn’t in place to produce and supply good coffee, whether because of the lack of equipment to produce it (very few wet mills), or getting products to the marketplace (poor roads). Thus, TNS’ strategy was to change the perception of West Ethiopian coffee by both efficiently producing washed coffeefor a specialty coffee market, and by making this coffee logistically accessibleto the market. Though roads were built and upgraded independently of TNS initiatives, these kinds of efforts went hand-in-hand.

The TechnoServe Way

TNS proposed that the coops install eco-pulpers at all the washing station projects they got involved with. This was a controversial prospect at the time, given the strong tradition up until then of the Ethiopian wet process being about fermenting with mucilage before washing. As we know, eco-pulpers have benefits, including saving water and requiring a lower up-front investment than the traditional wet process set-up with its many large fermentation tanks and washing channels.

Part of the TNS agenda was to help build equitable business projects, even helping with the financing, implementation of transparent bookkeeping, and overall good management by:

• Facilitating the process of applying for and getting loans to buildthe technical infrastructure: buying eco-pulpers, building washing stations and drying beds;

• Facilitating the process of applying for credit from banks so the coop could buy cherries. When a farmer arrives with coffee cherries, on any given day, the coop is expected to pay for the delivery on the spot. Thus, a lot of cash is required even before the start-up of the harvest season. Not to mention all the cash required to carry out the season;
• Helping to create a marketing plan (on behalf of the union): market outreach, market access, quality control and sample distribution
• Operational management, planning, and fiscal control.

Some of the most successful TNS coops managed to pay back the investment of equipment and infrastructure in less than 2 years, which is considered a great success by any business standard.

The ECX

TechnoServe During the time of the Revamping ECX

Little did TNS know that their program would be in stark contrast to ECX’s coming implementation of anonymity in the auction process. The new ECX structure was coincidentally put in place very soon after the TNS cooperatives were inaugurated and ready to hit the market with their attractively traceable coffees. The Coffee Initiative's original intention in Ethiopia was never to work with the Unions. In the first year, 2009, it tried to create a model where coops could work directly with private exporters. However, the Unions/government brought this process to a grinding stop. Eventually, all the coffees had to be taken over and exported by the Unions, and the contracts renegotiated. This was a major blow to the program because no one, including TNS, trusted that the Unions would be efficient, transparent, etc.

Specialty coffee buyers were flocking to TNS’ washing station projects. Although the coffee quality was not top-notch in the very beginning, the model at least provided a transparent trade model and TNS was pushing to make sure the farmers and their communities were rewarded with premium prices above the Fair Trade/Organic models.

When a washing station is owned by a cooperative, the contributing farmers collectively own the coop, but they must nominate a union to handle their milling and marketing for which the coop is charged a service fee. It usually makes sense to get these services from a union that is involved in the region, and hopefully it is also offering competitive terms. Even if the milling fee is regulated by law, unions have a reputation for taking advantage of the coops by charging the maximum fee possible and/or screening and processing lots to their own benefit (e.g. ‘mixing up’ lots, blending and even stealing).

The coop-union relationship is generally one where the union arguably has the ‘upper hand’. Since the union ends up with the parchment coffee in their possession, and being that they become the party that markets the coffee, they are the ones to send samples out to potential buyers.

In other words, even if a union is intended to be an intermediary part in the transparent relationship between a producer and a buyer, the unionis the primary contact and by default becomes the ‘owner’ of the relationship.

All this said, that dynamic briefly changed as soon as the TNS coops and washing stations earned their own fame, consequently bypassing the unions in building relationships directly with their end buyers (roasters).

TNS coops were obliged to deliver to various unions, as made geographic sense. Unfortunately, this only lasted for the first year of operation under TNS supervision. Once the Oromia Unionand its powerful and charismatic leader saw the success and prestige associated with trading directly with affluent coffee buyers around the world, it didn’t take long before all the TNS coops were forced to mill and market their coffee through the Oromia Union.

Oromia Union’s experiencewith lot separation, handling of the respective samples, and the necessary marketing efforts were generally not well developed initially. To overcome this, TNS opened regional offices with cupping facilities, training local staff and offering opportunities for buyers to access coffee without having to depend on the union. These efforts were meant only to be an temporary solution, while Oromia Union was supposed to equip itself with skilled staff, adequate systems and protocols, and building marketing strategies.

In my opinion this became and remained the weakest link with the TNS-developed supply chain. When TNS ended their project term, Oromia was still struggling to get things right.

Limmu is primarily where our coop coffees this year will come from

Returning to Cooperative Coffee

I am very pleased to announce that CCS is going into this season with a more diverse approach to sourcing and buying in Ethiopia. In addition to offering stellar ECX coffees; and micro-lots from private estates; CCS will introduce cooperative coffees to the menu. It is promising indeed thus we are looking forward to presenting a carefully curated list of lots from thoughtfully selected coops in the Limu/Djimmah region of the west!

The reasons for this optimism are these necessary turn of events: 1) Other Unions, for all the above-mentioned reasons, have emerged to service the coops; and 2) Quality, compliance, and commitment seem to hold a higher priority than in the earlier years of my experiences with the cooperatives and the Oromia Union.

We cannot wait offer you to taste the 'fruits' coming from all these emergent changes. Enjoy!

Robert

—founder of KAFFA and Collaborative Coffee Source (CCS)

Corrections: 1) the previous version incorrectly stated that TechnoServe was founded by the Bill & Melinda Gates Foundation and has been corrected to reflect the fact that the NGO was founded in 1968 and that the Gates Foundation is  one (albeit a large one) source of funding for TNS.

2) it was never TNS' original intent to work with Unions, as was implied in the earlier version. The post has been corrected to reflect the fact that TNS' aim was to work directly with cooperatives, independently of the Unions/government from the beginning.

Cupping back in 2012

Kenya: The Backward Rise of the Small Estate Farm

Connecting quality coffee with specific farms and their owners has become the specialty coffee norm, which emphasizes cup score, long-term relationships, and transparency. This bodes well for smallholders and roasters alike, as these expectations point to an evolving market; one that is slowly shifting away from purely speculative pricing and is now favouring connections between specific people selling and buying to/from one another.

Kenya, then, has been anomalous from other specialty origins in that much of its best quality lots are sold through a centralized auction and come from cooperatives serving up to 2000 smallholder members each. But contrary to other origins, many of Kenya’s coffee farmers’ cooperatives are impressively run organizations. Many of them actually accomplish what so many cooperatives in other origins fail to do: provide services and disseminate information that help farmers grow great coffee which in turn attracts buyers willing to pay good prices. Kenyan coffee cooperatives are in fact so successful, that some of the highest quality lots in the world come from them: AA and AB lots produced by cooperative factories are consistently the most expensive commercially traded coffees in the world.

To understand how and why coops became so strong, let’s go back to the beginnings of how Kenyan coffee was traded.

A Brief History of the Kenyan Coffee Auction

In the beginning (pre-Depression era), coffee was sold by London traders who took up to six months after the coffee was shipped before paying the farmers. Farmers had to rely on banks to finance them during this period, as well as pay for shipment costs. Further depleting their returns was the fact that coffee was initially dry milled in London, rather than in-country.

By 1926, the Coffee Planters’ Union was established with the aim of helping producers both make better coffee and more money from it. The 1930s was a time of rapid changes within the Kenyan coffee industry with various groups trying different kinds of cooperative and marketing systems, with the result that the Planters’ Union began splitting into smaller cooperative societies. The Thika Planter’s Cooperative Union became the largest and most dominant of these factions, which eventually was replaced by the Coffee Board of Kenya (KPCU), due to political lobbying from farmers and traders.

Until this point, the various planters’ unions and then the Coffee Board of Kenya had focused their efforts on gaining control over processing and curing coffee. So far left out of these movements was the gaining of genuine control over the marketing of Kenyan coffee. The auction was thus borne from the impetus of Kenyan farmers who wanted to gain control over the marketing of their coffee.

The first auction was established in 1931 but did not overthrow the prominence of the London traders. Several other auctions followed to varying degrees of success until in 1937, when the Nairobi Coffee Exchange was opened to widespread support. In addition, a nationwide standard in grading was developed in 1938. This became controlled by the KPCU.

The Rise of the Coffee Smallholder

Land ownership rights will always determine how a coffee sector is structured. With Kenya’s colonial history, early coffee production was represented and controlled by colonial land owners. In 1946, the government (still colonial) began to open rules for who could grow crops where and actively began encouraging indigenous Kenyans to grow cash crops, including coffee.

Then in 1954, a local chief got coffee seedlings from a European friend and began to plant on his farm. While he was initially subject to criminal proceedings, the growing independence movement (“Mau-Mau rebellion”) aided the chief in having his case successfully dropped. Once the rebellion ended, the Director of Agriculture removed restrictions previously allowing for only large plantations to grow coffee. The smallholder revolution had begun.

These days, Kenyan coffee is made up of two main sectors: plantations, made up of ±3,300 farms comprising an area of ±40,000 hectares (ha) of coffee. Within the plantation sector, there are 3000 small estates (<50 ha) and 300 large estates (>50 ha). This accounts for about 25% of Kenya’s coffee planted land. The other 75% is comprised of the coop sector, made up of 270 cooperatives with a membership totalling 700,000 smallholder farmers cultivating 120,000 ha of coffee.

Smallholder cooperatives began building factories/washing stations in the 1960s so that they could process their coffees the way large plantations did. Nowadays, these factories serve up to 2,000 members each. Smallholders, overall, control of 58% Kenya’s coffee production. Not only do they contribute the largest proportion of coffee, they are known for producing the highest quality coffee coming out of Kenya.

Changing Times: The Rising Small Estate Farm

Given Kenya’s coffee history, it is unsurprising that the cooperative has been the dominant seller of Kenyan specialty coffee. Specialty coffee buyers are very used to working with cooperatives and marketing Kenyan coffees in this way. But not all cooperatives are working equally well and it has often proved frustrating for a buyer to align themselves with specific coops and/or factories because of things like corruption, mismanagement issues, and fluctuating quality.

It is for these reasons, traceability concerns, etc., that we have started exploring relationships with both single estates as well as small farmer groups beginning to form micro-coops. As is true at origins with well-developed farm-level marketing, these kinds of partnerships are enticing for even greater quality and relational potential than is possible with big group organizations.

While touring Kirinyaga during early-November this year, we met with the newly established “Slopes of 8” micro-cooperative. As its name implies, this cooperative is made up of eight estates that have banded together to market their coffees together with the aim of establishing long-term relationships with buyers. The project has garnered so much interest from neigbouring farms that the leader of Slopes of 8, Joseph Karaba, is consulting others on how to begin their own micro-cooperatives.

In February, we will hopefully cup lots from a couple of these newly established coops and start some new partnerships.

We have already had a lot of success with one small estate farmer relationship that was established two seasons ago: John Njoroge owner of Kiambu and Kiriani estates, who has produced great coffees for us two seasons in a row. The current harvest will represent our third season working with him and we were thrilled to see that he had invested in and constructed beautiful, sturdy, shaded drying beds, even though the drought brought on by El Niño/La Niña earlier this year has left him with a disappointing volume of coffee this season.

Unfortunately for farmers all over Kenya, the current harvest will lead to lower than average volumes this year, which often leads to higher overall cup quality. Look forward to sharing our selections with you in a few months.

-Melanie

Bibliography

1. Block, R. Pearson & C. Tomlinson. Kahawa: Kenya’s Black Gold. C. Dorman LTD. Nairobi, 2005.

Situation in Ethiopia

Over the last nine months, there have been waves of protest and unrest occurring in the Oromia region, which has led us to cancel our planned trip to Ethiopia in the coming weeks. Amidst the protests and subsequent killings, we have read about and had confirmed by export partners, that washing stations have been targets of looting and vandalism. For one of our partners in particular, it has been incredibly challenging to make decisions about buying and processing cherries. Would these coffees even make it out of the country?

While it's challenging to find good news sources about how and why these protests have been occurring, we've found some that we'd like to share with you and that you can find in the links below.
 

(Very) Surface Background 

The current situation is based on the build up of years of frustration from ethnic groups who have felt marginalized by the government. Ethiopia is made up of about 80 different ethnolinguistic groups with the Oromo nation comprising the largest ethnic group in the country. The communist regime was overthrown in 1991 and the current government, which acts essentially as a single-party, has been ruling as an authoritarian regime since that time.

Throughout the years, there have been varying degrees of unrest and protest, the biggest and until now occurring in 2005 during the country's heavily contested elections. The results of that election, which sustained the ruling party's power (the Ethiopian People's Revolutionary Democratic Front (EPRDF)), was considered fraudulent by both the opposition as well as outside observers. Now, the country's two largest regions - Oromia & Amhara - have been continuously erupting in protests over the last nine months, over similar dissatisfactions with the ruling EPRDF, despite the EPRDF's attempts to repress these uprisings through thousands of arrests and hundreds of killings.

The heart of the protestors' frustration comes down to a few main topics: land ownership, repression, and the fact that the ruling party is significantly made up of a minority Tigray elite. The Tigray nation makes up just 6% of Ethiopia's total population.
 

Potential Impact on the 2016/17 Harvest?

Those of you who have spent time in Ethiopia, or in the East African region more generally, understand that change is the modus operandi. It is too early in the season to make any predictions about how the export season will play out and whether these sociopolitical happenings will negatively impact the coffee sector.

For now, we wanted to share what is happening and why we and other coffee buyers have been cancelling travel plans to Ethiopia. We will keep you updated as further news becomes available.
 

News Links

http://hornaffairs.com/en/2016/09/14/ethiopian-spring-killing-grievances-protests/

http://addisstandard.com/7784-2/

http://www.bbc.com/news/world-africa-36940906

Helpful Reports for Background Info

http://graphics.eiu.com/PDF/Democracy_Index_2010_web.pdf

https://www.hrw.org/world-report/2006/country-chapters/ethiopia

Farmer Profile: Jhon Leguizamon

JHON JAIRO LEGUIZAMON-LA ESPERANZA

Name: Tolima
Location: La Veta, Colombia
Region: San Juan de La China
Altitude(masl): 1800-2000
Average Annual Rainfall(mm): 940
Process: Washed
Drying Method: Sun
Harvest Season: May- July
Variety: Mixed, Castillo, Caturra

About

Before 1999, La Esperanza was run by his mother where she planted beans and green peas. However, she was recommended by the Coffee Committee that she should switch to coffee. Today, Jhon and his wife Ana Rosa are responsible for the farm and the crop and have been producing coffee for the past 15 years.

The type of “beneficio” used for his coffee is humid, meaning the water used comes from their own aqueduct. Within the farm, a water creek is born and that ́s where the water for irrigation and processing comes from. There are also intercrops of bananas, beans, corn and plantains.

Factory Profile: Gathiruini

Name: Gathiruini
Affiliated CFS: Komothai Cooperative Society
Province: Central
District: Kiambu
Location: Gathiruini
Nearest Town/Centre: Karatina
Average Annual Rainfall (mm): 1100
Altitude (masl): 1520-2200
Process: Washed and Naturals
Drying Method: Sun
Harvest Method: Handpicking
Main Harvest Season: November - January
Varieties: SL 28 & SL 34
Soil: Rich red volcanic soil

About

Gathiruini washing station is part of the largest Cooperative Society of Kiambu county. Together with Riakahara, Barikongo, Kagwanja, Kirura, Korokoro, Githongo, Thiururi, Kaibu, New Thuita, Kanake, Gatuyu and Kamuchege factories, the Komothai Cooperative Society gathers over 9,900 active members. Together they produce over 170,000 kgs of clean coffee annually.

Farmers take ripe cherries to be processed in centralized wet mills, where they are pulped, fermented, washed and sun dried. Dry parchment is then moved to a dry mill for further processing and grading before reaching the weekly auctions in Nairobi.

Background

Coffee production in Kenya dates back to the late 1880’s, when is thought to have been brought by the French Missionaries to the Taita Hills area. Introduced into the Kiambu district in 1896, it found a great combination of altitude, soils and temperature that results in the high quality for which Kenyan coffee is known for around the world.

Still today, the biggest coffee growing area spreads from Kiambu, on the outskirts of Nairobi, up to the slopes of Mount Kenya. The Counties in this region also known as Central Kenya – Kiambu, Kirinyaga, Murang’a and Nyeri – have an annual production of around 39,000 metric tons of green coffee, which counts for almost 70% of the national production. Other coffee growing areas are: Machakos (Eastern Kenya), Bungoma (Western Kenya) and Kisii (Nyanza region) but volumes are significantly smaller.

Although patterns may differ from area to area, Kenya is generally known to have two main rainy seasons which dictate two crops. Long rains happen from March to May, while a shorter rainy season happens around October. The dry spells that anticipate those trigger two flowering periods: February/March for the country’s main crop, and September for the early/’fly’ crop. That means coffee will be harvested from September to December for the main crop, and from May up to July for the early crop. While central areas are able to produce and deliver coffee in both seasons, Machakos, for example, is known for producing almost only during early crop.

Soils are volcanic and very rich in organic matter, and the altitude in coffee growing areas ranges from a minimum of 1280m in Embu, Eastern part of Mount Kenya region, to a high of 2300m in Nyeri, on the Western slopes.

Organization & Processing

Approximately 55 % of all coffee production comes from smallholder farms, but that can vary from area to area (Kiambu 14%, Kirinyaga 72%, Machakos 80%). Smallholder farmers are organized in Cooperative Societies, these own the wet mills where farmers deliver ripe cherries. At wet mills (also known as factories) cherries get pulped and ferment for approx. 24 hours. After fermentation, coffee is then soaked in tanks full of water and washed in channels. Still at the washing state, coffee is graded in P1 (heaviest parchment), P2 and lights (floaters); and any remaining cherries are removed and processed separately. Coffee is sun dried on raised tables and drying can take up to 3 weeks. At night and during the hottest periods, parchment is covered so that drying is homogenous. Dry parchment is then delivered to a centralized dry mill to be processed, screened and marketed at the weekly auctions in Nairobi.

Factory Profile: Kiangai

Name: Kiangai
Affiliated CFS: Kibirigwi Cooperative Society
Province: Central
District: Kiangai
Location: Kirinyaga, Nyeri
Nearest Town/Centre: Karatina
Average Annual Rainfall (mm): 1500
Altitude (masl): 1310-1900Process: Washed
Drying Method: Sun
Harvest Method: Handpicking
Main Harvest Season: November - January
Varieties: SL 28 & SL 34
Soil: Rich red volcanic soil

About

Kiangai village is located 7 km from Karatina bordering Nyeri and Kirinyaga counties. Farmers use the Kiangai washing station which is part of Kibirigwi Cooperative Society together with another 8 factories (Ragati, Nguguini, Mukangu, Kibingoti, Thunguri, Kianjege, Chewa and Kibirigwi). This is a large society with approximately 7,200 active members producing 750,000 kgs of clean coffee annually. Farmers take ripe cherries to be processed in centralized wet mills, where they are pulped, fermented, washed and sun dried. Dry parchment is then moved to a dry mill for further processing and grading before reaching the weekly auctions in Nairobi.
 

Background

Coffee production in Kenya dates back to the late 1880’s, when is thought to have been brought by the French Missionaries to the Taita Hills area. Introduced into the Kiambu district in 1896, it found a great combination of altitude, soils and temperature that results in the high quality for which Kenyan coffee is known for around the world.

Still today, the biggest coffee growing area spreads from Kiambu, on the outskirts of Nairobi, up to the slopes of Mount Kenya. The Counties in this region also known as Central Kenya – Kiambu, Kirinyaga, Murang’a and Nyeri – have an annual production of around 39,000 metric tons of green coffee, which counts for almost 70% of the national production. Other coffee growing areas are: Machakos (Eastern Kenya), Bungoma (Western Kenya) and Kisii (Nyanza region) but volumes are significantly smaller.

Although patterns may differ from area to area, Kenya is generally known to have two main rainy seasons which dictate two crops. Long rains happen from March to May, while a shorter rainy season happens around October. The dry spells that anticipate those trigger two flowering periods: February/March for the country’s main crop, and September for the early/’fly’ crop. That means coffee will be harvested from September to December for the main crop, and from May up to July for the early crop. While central areas are able to produce and deliver coffee in both seasons, Machakos, for example, is known for producing almost only during early crop.

Soils are volcanic and very rich in organic matter, and the altitude in coffee growing areas ranges from a minimum of 1280m in Embu, Eastern part of Mount Kenya region, to a high of 2300m in Nyeri, on the Western slopes.

Organization & Processing

Nowadays, approximately 55 % of all coffee production comes from smallholder farms, but that can vary from area to area (Kiambu 14%, Kirinyaga 72%, Machakos 80%). Smallholder farmers are organized in Cooperative Societies, these own the wet mills where farmers deliver ripe cherries. At wet mills (also known as factories) cherries get pulped and ferment for approx. 24 hours. After fermentation, coffee is then soaked in tanks full of water and washed in channels. Still at the washing state, coffee is graded in P1 (heaviest parchment), P2 and lights (floaters); and any remaining cherries are removed and processed separately. Coffee is sun dried on raised tables and drying can take up to 3 weeks. At night and during the hottest periods, parchment is covered so that drying is homogenous. Dry parchment is then delivered to a centralized dry mill to be processed, screened and marketed at the weekly auctions in Nairobi.

Farm Profile: Ndocha Estate

Name: Ndocha Estate
Province: Central
District: Ruiru
Location: Kiambu
Nearest Town/Centre: Kiambu
Average Annual Rainfall (mm): 1300
Altitude (masl): 1575
Process: Washed
Drying Method: Sun
Harvest Method: Handpicking
Main Harvest Season: November - January
Varieties: SL 328
Soil: Rich red volcanic soil

About

Previously known as the Muathe farm named after the family’s matriarch, Ndocha Estate is now owned by siblings and run by Peris Karungongo. The farm has seven permanent workers and casual workers during picking season, varying from from 10 to 12 workers off peak and up to 80 during high season. Ndocha Estate has 4 different ‘blocks’ totalizing 29 hectares with a many as 15,000 coffee trees of traditional varieties.

Background

Coffee production in Kenya dates back to the late 1880’s, when is thought to have been brought by the French Missionaries to the Taita Hills area. Introduced into the Kiambu district in 1896, it found a great combination of altitude, soils and temperature that results in the high quality for which Kenyan coffee is known for around the world.

Still today, the biggest coffee growing area spreads from Kiambu, on the outskirts of Nairobi, up to the slopes of Mount Kenya. The Counties in this region also known as Central Kenya – Kiambu, Kirinyaga, Murang’a and Nyeri – have an annual production of around 39,000 metric tons of green coffee, which counts for almost 70% of the national production. Other coffee growing areas are: Machakos (Eastern Kenya), Bungoma (Western Kenya) and Kisii (Nyanza region) but volumes are significantly smaller.

Although patterns may differ from area to area, Kenya is generally known to have two main rainy seasons which dictate two crops. Long rains happen from March to May, while a shorter rainy season happens around October. The dry spells that anticipate those trigger two flowering periods: February/March for the country’s main crop, and September for the early/’fly’ crop. That means coffee will be harvested from September to December for the main crop, and from May up to July for the early crop. While central areas are able to produce and deliver coffee in both seasons, Machakos, for example, is known for producing almost only during early crop.

Soils are volcanic and very rich in organic matter, and the altitude in coffee growing areas ranges from a minimum of 1280m in Embu, Eastern part of Mount Kenya region, to a high of 2300m in Nyeri, on the Western slopes.

Organization & Processing

Nowadays, approximately 55 % of all coffee production comes from smallholder farms, but that can vary from area to area (Kiambu 14%, Kirinyaga 72%, Machakos 80%). Smallholder farmers are organized in Cooperative Societies, these own the wet mills where farmers deliver ripe cherries. At wet mills (also known as factories) cherries get pulped and ferment for approx. 24 hours. After fermentation, coffee is then soaked in tanks full of water and washed in channels. Still at the washing state, coffee is graded in P1 (heaviest parchment), P2 and lights (floaters); and any remaining cherries are removed and processed separately. Coffee is sun dried on raised tables and drying can take up to 3 weeks. At night and during the hottest periods, parchment is covered so that drying is homogenous. Dry parchment is then delivered to a centralized dry mill to be processed, screened and marketed at the weekly auctions in Nairobi.

Producer Profile: Daniel Peterson, Hacienda La Esmeralda

Estate: Hacienda Esmeralda
Region: Jaramillo and Canas Verdas
Location: Boquete, Panama
Altitude(masl): 1600-1800
Process: Washed and Natural
Variety: Geisha

About

As a coffee farmer, Daniel's interest in the sensory evaluation of coffee was once a rarity. The custom at Hacienda Esmeralda has always been to pick coffee berries as they ripened, plot by plot, but all the coffee from Jaramillo was mixed. It was only in 2002 that Daniel became aware that it was the few plants (3%) on the farm of this special varietal, which elevated the overall fresh acidity of the whole lot. Daniel began to selectively pick and separate the berries that he considered to be the particular varietal creating this unique aroma and flavour. This is where the new era begins.

Boquete is a very special place in this respect: there is good camaraderie and professional solidarity between clever and ambitious coffee farmers in one place. From this fertile ground sprung the Specialty Coffee Association of Panama (SCAP), and the Best of Panama (BoP), first held in 1996 – three years before the CoE. Many coffee farmers here know their coffee well. They are seasoned roasters and skilled cuppers. Daniel has been a part of this community since its inception. (In 2012, the BoP made the radical – and absolutely natural – intervention to separate Geisha coffee in a separate category of the competition. This made BoP the first auction program to do so, but we are going to see more of it ahead!)

Daniel is a meticulous, curious and ambitious person. When we visited him in 2006, we were presented with a coffee that he had put great pride in “making”. Daniel had selectively picked from the areas on the farm he had presumed to be the best. He then tasted his way through the coffees, selecting only the best, mixed the small lots, and sold it as Esmeralda Special Geisha. Winning the BoP every year from 2004 to 2007 would suggest that this was not a bad strategy. But we wondered if it would be possible for us – who would buy his coffee anyway – to taste the day lots, from different areas of the farm separately. Given that the characteristics would be slightly different from area to area, from early to late in picking season, we would thus be able to select the best of the best.

To begin with, Daniel wasn’t sure of idea of letting us have this opportunity. He had, after all, taken great pride in finding the best, and then creating (by blending) the best of the best. But the following year Hacienda Esmeralda agreed to this strategy. They even put up an auction where they offered small lots from all areas, with different picking dates. All were from Jaramillo, everything was Geisha, but all the lots were a little different. It was a success!

The early Hacienda Esmeralda Special Geisha offerings have become an exercise in showing the different characteristics and potential of a single varietal; with aromas ranging from highly refined bergamot to jasmine; flavors varying from stone fruit sweetness to citrus acidity, and different mouth feels – and all from a small geographical area. Prices at auction have also shown that subtly different attributes attract different buyers, and show that roasters are valuing those attributes very differently. This auction has now become a yearly barometer for the value of The Geisha Coffee from Boquete in Panama.

The Coffee World can consider itself lucky that this single piece of land, a small coffee farm in Jaramillo, Boquete, ended up in the Peterson family’s hands. In such a short time, the trend in the specialty coffee world has gone completely parallel to this story: this practice is no longer unique to Hacienda Esmeralda. In that sense, this is also the story of the development of specialty coffee in recent years.

Daniel’s work and his impact on specialty coffee are undeniable. The Peterson family of Hacienda Esmeralda have helped us to define the true value of truly good coffee: it’s about its taste. And that is priceless.

Direct Trade and the Ethiopian Commodities Exchange: What’s the Problem?

98% of the coffee exported out of Ethiopia goes through the Ethiopian Commodities Exchange (ECX), so to say it’s important is a massive understatement. But it’s also a struggle to understand, makes transparency seem as out of reach as world peace, and causes a lot of misrepresentation about what Ethiopian coffee is and how the export process works. In fact, it’s almost incomprehensible as to why the ECX is so, well, incomprehensible. Anyone who imports Ethiopian coffee can attest to the resulting challenges, frustrations, and constant changes they experience when buying from this coveted origin.

So two stakeholders in the Ethiopian coffee trade have sat down for a Q&A on what the ECX is, why it makes it difficult to buy directly from source, and how the process may improve in the future. Read on to to discover what this confusing system is all about.

Coffee being processed in Gedeb, Ethiopia

The Q&A Participants

Heleanna Georgalis of Moplaco P.L.C. is an exporter of Ethiopian coffee. Her family has been working in the coffee trade in Ethiopia for three generations, and Moplaco was established by her father, Yanni, in 1971.

Melanie Leeson is a coffee buyer/importer for the Collaborative Coffee Source, whose founders have been establishing close partnerships with coffee producers and exporters since 2005 through their sister company, Kaffa Roastery, in Oslo, Norway. Since 2012, CCS has independently continued to strengthen these early partnerships and is continuously and thoughtfully adding new partnerships – producers, exporters, and roasters alike – to its supplier roster and customer base, which together span over five continents.

The ECX: A Q&A

Melanie Leeson: Heleanna, explain to me the different ways someone can buy coffee from Ethiopia. Is it possible to have direct trade Ethiopian coffee?

Heleanna Georgalis: Well, yes. You can buy in three ways:

1. Directly from Unions which form an umbrella on top of a number of cooperatives. Coffees bought this way can come in bulk (e.g. a Sidamo Gr-2) with no specificity behind it, or can come “directly” from the specific cooperatives you have chosen to buy from. This coffee can be fully traceable and recognisable.

2. Directly from a commercial farm that has a minimum of 35 hectares of land. These farms are also recognisable. They offer traceable coffee from their own land, along with coffee most likely collected from the farmers around them.

3. From an exporter who can ONLY buy their coffee from the auction. These coffees are not traceable and are only given general names from wider geographic areas. For example, a Sidamo A would include areas such as Bensa, Guji, and Harorensa.

Wild coffee trees in Kaffa forest

Melanie Leeson: Are there any downsides to buying from cooperatives via unions? Why doesn’t everyone who wants traceable coffee just buy from the unions?

Heleanna Georgalis: Although I’m not a buyer myself, I believe people may, in many cases, prefer to buy from an exporter, as they’ve already built a relationship of trust over time.

Buying from a cooperative and union, although they may offer the advantages of traceability and the access to see where and how the coffee has been produced, requires an enormous investment of time. This may form an impediment. And even once a relationship has been established with the cooperative, timely communication and reliability with the union-exporter may become hurdles. In addition, the farmers of the cooperative may not be the full beneficiaries of all these efforts.

However, this option still remains the best option for establishing a desired “direct trade”, as it allows you to deal as close to the origin as possible.

Processing Ethiopian Yirgacheffe

Melanie Leeson: Buyers see a lot of names of Ethiopian coffees in the market. Can you explain how all these names come about, given the fact that 98% of the total produced volume in Ethiopia is still bought from the ECX?

Heleanna Georgalis: There are about four different types of names an exporter, whether a union, farm, or private exporter, can use:

1. A general wider area, such as Sidamo.

2. A specific area, such as Guji, that can be accessed through the ECX because it’s graded as an 80+ coffee. In this case, “Guji coffee” becomes traceable to the wider Guji area. So this kind of traceability is possible for some localities traded through the ECX, but certainly not for all.

3. A specific location, such as Haricha. However, this is only possible if the exporter is a cooperative/union from the area that can directly trade the coffee as “Haricha”. Or if they’re a commercial farm that’s established in that area.

4. A brand that’s a registered name an exporter has given to their coffee.

Ethiopian Yirgacheffe

Melanie Leeson: Is it possible for an exporter to buy coffee from cooperatives and farms and then market these coffees using their names and locations?

Heleanna Georgalis: “Absolutely not” would be the definite and short answer to this. So when an exporter claims that a coffee comes from Haricha in Yirgachefe, you have to wonder how they know, given the lack of traceability inherent in the auction.

Equally, when an exporter says that their coffee comes directly from one particular washing station, you have to wonder – again – how they could possibly know this, since the coffees from a wider area are just blended together and then given a grade and a classification.

Where is your coffee really from?

Melanie Leeson: What was the rationale behind the creation of the ECX? Why the move to remove traceability in the coffee buying process?

Heleanna Georgalis: Let’s say “a lack of adequate information and understanding of the workings of coffee”.

ECX was formed out of the belief that Ethiopia would be able to eliminate or reduce poverty if commodities could have a platform to be traded on, rather than an informal system of supply mainly controlled by or benefiting the “middleman”.

However, coffee already had an established system and platform of trade that had existed since the 1970s. It was well designed to represent and trade coffee in a traceable and sustainable way. Like every system it had its drawbacks, but these were easy to correct.

The move to remove traceability emerged from a belief that if the exporter and the supplier of coffee could identify each other, then collusions could form that would distort the market and make it difficult and unfair for all the players to participate. So the most valuable information of the coffee was removed, but the collusions and special relationships that plagued the previous system have gone underground but have not been hindered.

Moplaco’s Yirgacheffe warehouse

Melanie Leeson: I read earlier this year that ECX was rolling out a geotagging system this season. Each bag now comes with a scannable code that will provide the buyer with its precise geographic information. Is this program operational? How is it working out?

Heleanna Georgalis: This system, although cumbersome to implement, and cumbersome for the logistics of any exporter’s warehouse, gave me the hope that the information we need would be restored to us. It would enable us to sell high quality coffee traceably.

At the moment, the system has not yet been fully established. Although efforts have been made to deliver tagged coffee bags to us, they cannot actually be read or traced. I sincerely hope that, as of next year, we will have a clearer view on how the system will actually operate.

Coffee picking in Gesha Village, Ethiopia

Melanie Leeson : What do you think about buyers’ demands for traceability?

Heleanna Georgalis: Reasonable, I would say. How can a product be “special” if it is bulked and blended with other products? How can you understand and appreciate the specificities of each coffee and location unless this information is available?

However, like many demands, this can also become a hurdle to both exporters and buyers in sourcing the best coffees they can. If Ethiopia exports 98% of all its coffees through the auction, it would be unreasonable to believe that this amount would not be sufficient to cover their need for a great coffee.

At the end of the day, traceability does not guarantee quality, although I would say that quality needs to be traceable up to a certain point. I do find some of the demands unreasonable, but then who am I to judge what people have to do to sell their coffee?

Cupping coffees picked and processed at Gesha Village, Ethiopia

Melanie Leeson: One final follow-up question on the geotagging system. As I understand it, the exporter buying a coffee from the auction cannot see or taste the coffee before it is purchased; it’s purchased simply based on the grade the ECX cuppers have given it.

Let’s say the geotagging system is perfectly operational – still, what’s the point of being able to trace the coffee if you have no way of buying it again? If you’re purchasing coffees from the auction with only the wide geographic region and grade as your basis for purchase, then what is traceability for? Other than simply to know where the coffee comes from.

Heleanna Georgalis: This is a very valid point for a person who needs consistency over time. In fact, it represents the exact point that our established new system needs to work on. However, an importer should also remember that, given the current state of infrastructure in Ethiopia, a good Guji Gr-1 wouldn’t taste fundamentally different from another good Guji Gr-1, to give an example.

In Ethiopia, processing is where fundamental changes can happen in the quality of the coffee, but it hasn’t evolved much yet. So both traceability and the ability to re-buy coffee year-to-year is something that isn’t really possible in Ethiopia yet – but the ability to re-buy wouldn’t make much of a difference anyway until processing is revolutionized.

Ethiopia Guji beans

Melanie Leeson: So, so, so many more questions… We could write a book about how coffee works in Ethiopia. Thank you for shedding some light on these points. I look forward to learning more and seeing how the link between traceability and quality develops over time here.

Original article on Perfect Daily Grind

Specialty or Marketability: What Are We Really Selling?

Melanie Leeson and Heleanna georgalis

via Perfect Daily Grind

The internet has done wonders for coffee. It’s brought the stories of producers to life, revealing the extraordinary work that they do. It’s spread the message of how amazing good coffee can taste, making words like “single origin” and “acidity” far more common. It’s enabled people at origin to reach new markets and receive better prices for their product.

But has all this gone too far? Do we now sell specialty coffee or do we sell a like-inducing photo? And is the time and effort that producers put into marketing themselves for specialty – allowing origin visits, teaching purchasers about their work – being adequately repaid?

Two coffee professionals, one exporter and one importer, share their views on the state of specialty in Ethiopia.

Are we helping communities by selling their coffee – or are we selling communities to help our coffee businesses?

The Exporter Point-of-View: Heleanna

Heleanna Green coffee exporter, farmer, and roaster; one half of Moplaco P.L.C.

My coffee journey has been one of disappointment through to excitement and, now, unease.

As an exporter from Ethiopia, I’m always striving to find the best coffee possible within the limitations that the current auction system (Ethiopian Commodities Exchange, ECX) imposes. Whenever I find great coffee, I get really excited and I hope that my partners will feel the same.

We’re all working towards the same goal: producing a delicious cup. And as someone working in the early part of the chain, I’m trying to find the right market and client base for a given coffee: people who will appreciate it, promote it, and put their best efforts into delivering what the farmers and processors have already put into it.

When I joined the coffee world, one of my first discoveries was that coffee is contradictorily one of the most valuable and yet undervalued commodities in the world. I firmly believed that quality was important and that Ethiopia had the potential to produce it.

Yet I felt frustrated about the way Ethiopia was perceived amongst top roasters. One of them even told me, “Your father saw coffee as this precious little shrub that he had to take care of and that the farmers behind it mattered. But coffee is sold in bulk, in big volumes, so all that romanticism does not matter.” I remember the disappointment I felt so sharply – yet also the burning conviction that my father was right.

Then I discovered the growing specialty market, and I was thrilled to be a part of coffee at that time. I was talking to people who shared the same beliefs as my father and me, I was hearing the word “sustainability”, and I truly felt that people were starting to really think about the future of coffee and the farming communities producing it. I met great people like Geoff Watts, co-owner of Intelligentsia, and saw how all these people upheld those values.

And as more and more people flocked towards specialty, we were delighted. Yet over time, we spotted another shift – one that has left me with feelings of concern.

Today, everyone collects images and stories. And I have to ask myself, has specialty become a competition to take the best photos and gather the best stories? Or is it still about the essence of the coffee itself? Why does a coffee sell: is it its marketability or is it its worth?

Is this coffee farm better if it has an exciting story?

Here in Ethiopia, I see people selling the wildest stories to a very willing audience. But how many people truly understood how to source really good coffee, how to identify the potential of it, and at the same time sincerely support the communities around it?

Yes, advertising, reviews, public relations, social relations, media, and our own personal experiences affect our perceptions. But are we forgetting about the “sustainable”, “equitable”, “quality driven”, “uniquely sourced” principles that the specialty industry originally set out to achieve? And is the lack of marketing going to plunge otherwise great coffee to the depths of the unknown?

Does the lack of a story have to mean a diminishing perception of quality of the coffee itself?

What sells this coffee: its processing or the photo of its processing? 

The Importer Point-of-View: Melanie

Melanie Leeson, Director of Marketing and Development at Collaborative Coffee Source, a coffee importer.

I used to think of marketing as a four-letter word. But that was until my perception about what marketing can be changed.

I entered into this business eight years ago, as a barista in Canada, and have worked as a buyer/importer for the last four years for roasters all around the world. And so I’ve encountered a lot of different ideas about, and approaches to doing, specialty coffee.

Within these years, my perception of what marketing is and how it can be used has evolved quite a bit. As an example, one of my early perception shifts came from acknowledging that “education” distributed through a for-profit business is marketing. And so I no longer think of marketing as bad – but I do think that we in specialty need to examine our relationship between marketability and sustainability.

Visiting origin is marketable and it can be sustainable – but the idea that every single roaster who is doing specialty coffee should travel to each origin they buy coffee from isn’t. I think there’s a necessary time and place for roasters to get to know their producing partners and to see how production is done, but I don’t understand it when small/microroasters travel to an origin to source two bags of coffee, using up a lot of a producer’s or exporter’s valuable time and resources in doing so.

Why not travel with your importer and a group of colleagues, so that you can all share your host’s resources? You’d likely see and do more than you would be able to alone, and it would be less costly for the producer.

Marketing doesn’t have to be bad – but it is marketing.

As a buyer, I also understand the necessity of working with suppliers with a good reputation and who know how to market their work. For a start, it’s absolutely crucial that you work with people who can expertly prepare and export coffee: I need to be able to present that coffee in the same way I experienced it while cupping it during the buying process – and this will only happen if the coffee departed milled, packaged and organised into the container properly. Regardless of how much effort went into production and how special the cup profile is, the preparation and export process makes or breaks the final result.

So when it comes to the marketability of a coffee, I’m not only looking for engaging photos and stories (though they are nice and I do like them); I’m looking for suppliers that share my value of transparency. And that hinges on the ability for everyone along the coffee chain to be able to convey to the end coffee drinker precisely who made their cup of coffee and what was involved in the producing and transporting of it.

I think it’s great that there are select suppliers who are able to demand high prices for their boutique nano-lots. If it means that coffee is perceived and treated with as much respect as a well-crafted cocktail or glass of wine, I’m all for it.

But I’m in agreement with Heleanna about the need for us to question what “specialty” and “sustainability” mean to us in 2016. It’s far too early for specialty coffee to be coasting on the past 20+ years of hard work in educating the public. There are still far too many producers struggling because they are unknown or, worse, that are not being compensated fairly for their contributions to our industry.

Written by H. Georgalis of Moplaco P.L.C. and M. Leeson of Collaborative Coffee Source and edited by T. Newton.

Coffee & Genetic Diversity

'Science' is often conflated with 'truth' and this assumption can have far-reaching impacts, both positive and negative, on an industry that is as reliant on evidence-based conclusions as specialty coffee is.

Bruno Latour, a philosopher and sociologist of science, wrote a clear and in-depth analysis back in 1987 about the ways in which scientific communities are inseparable from the traditions, culture and societal perspectives that surround them. This is something that is not often acknowledged within the course of scientific debates and it came to mind when I recently came across diverging sets of research on genetic variability: a topic that is of vital importance to the future of coffee.

Since 2013, World Coffee Research has been undertaking studies on genetic variability and one of their preliminary findings was that there is almost no genetic diversity amongst coffee plants, whether wild or cultivated. Thisconclusion was based on 'an incredibly diverse range' of around 1000 plant samples. It is important to note that these samples were taken from the CATIE coffee germplasm collection, and not wild Ethiopian coffee forests.

If these findings hold true, the consequences could be dire for coffee which is increasingly under threat from climate change and its associated diseases, pests, rain and temperature fluctuations, etc. Coffee requires, as other viable crops do, a broad range of genes from which to select and plant future coffee.

But the findings from World Coffee Research are not corroborated by other researchers who are investigating this same topic. For example, Ethiopian and German researchers from Addis Ababa University and Freie Universität Berlin jointly published an article in 2014 that used inter-simple sequence repeats (ISSR) fingerprinting analysis and found high genetic variability in the forest populations it studied.

One of the realities about conducting any kind of research is that it is almost always conducted within a specific sphere of influence, whether a university, a small international community of acquainted researchers, or a company that has its own R&D department. I'm glad that World Coffee Research exists - it is made up of many great coffee organizations and companies that are specifically working for the specialty coffee community. This industry needs to have bodies such as WCR in order for all of us to thrive and innovate.

What my very short and select literature review highlights is the need for more and closer cooperation between specialty coffee and the wider scientific community. Why shouldn't specialty coffee benefit from the fact that a lot of resources and great minds outside 'our sphere' are addressing some of our biggest questions and challenges?

- Melanie

Ethiopian Coffee: The Timeline

I want to explain a process that you all have questions about and is super important to your offerings: the timeline of getting Ethiopian coffee from the tree to your roastery.

The prevailing expectation is that since harvest begins in October and ends from December-January, cupping/selections happen in February and March is shipment month. This schedule is based on buyers' experience of the former auction system. It does not reflect the way the current auction system works for mixed containers.

In the old system, coffee was sent to a centralized warehouse and then purchased in Addis. This meant that a coffee purchased in the morning was delivered to the buyer's facility the same day.

When the new ECX system was implemented, the decision was made to place warehouses in 7 locations across the country that make up the geographic regions that coffees are now sold as (e.g. Yirgacheffe, Sidama, Limmu, etc.). So now, when a lot is purchased, it has to travel from the countryside to Addis after the regulated inspections are made and paperwork is in order. This process takes, on average, 10 days.

By the time the coffee arrives in Addis, it has not yet been evaluated by the buyer. In fact, one can only make a quality claim while the coffee is still at its original warehouse. Basically the process makes it impossible to make quality claims because: 1. you have to pay a non-refundable fee of $150 to have your coffee inspected, 2. you have to have a staff member be there to do the inspection, 3. you have to pay your driver's expenses while any claim is made and the resulting appeal is followed up. And of course, the coffee isn't going anywhere and can't be offered to any customers while this process is unfolding.

Let's assume a lot has been purchased on February 1 (e.g. Kochere gr. 1) and it proceeds to Addis without incident:

February 1: Kochere gr. 1 is purchased (it's a full container lot, so 300 bags) February 8: Inspections and paperwork are completed February 10: Kochere arrives at warehouse in Addis February 11: Kochere is first cupped and evaluated by the buyer February 12: sample is sent out to a potential client (e.g. CCS) February 17: sample arrives at CCS' lab for evaluation February 18: sample is roasted February 20: sample is cupped and let's assume, approved February 21: lot goes into the queue for mechanical and hand sorting at the exporter's facility February 28: it's ready for export March 1: earliest possible departure date from exporter to CLU for final inspection before export March 4: container is approved for export by CLU March 5: departure from Addis to Djibouti March 10: container arrives to Djibouti port March 15: container departs from port April 15: container arrives at Antwerp/New Jersey port April 22: container is stripped at Pacorini/Continental warehouse April 24: earliest possible loading to you the roaster

The above timeline is based on the following assumptions: 1. absolutely every step occurs without incident 2. only one lot is within the container

In reality, we purchase containers that are made up of at least 2 different lots (usually it's more like ±5) so that we're able to offer a good variety to our roasters. So each of these lots have to go through the above process and then approved by us for purchase. Getting 5 lots coming from different warehouses with the exact cup characteristics that we like and then getting them machine and hand sorted for export makes March export, well, pretty challenging, to put things lightly. And all the above also assumes that the export facility is functioning at top efficiency and capacity.

Last week the electricity went out on Wednesday at Moplaco and wasn't functioning again until Friday afternoon. Not only was production halted, but a staff member had to take the time to follow up vigilantly with the utilities company to ensure that someone was actually addressing this situation. Heleanna estimates that an entire container's production was halted due to these three days of the electricity cut.

Over the weekend, I had the pleasure of celebrating Ethiopian Easter with Heleanna, her friends and family. One of the people I met on Sunday works for an Italian development agency and another works as an IT consultant for the World Bank. Both of them work with a variety of commodities and have years of experience working not only in Ethiopia but around the world on development projects.

I explained some of the challenges that I've noticed about the export process for coffee and asked for their perspective as to why it's so labyrinthine and challenging. They had some common answers: - small business doesn't matter to policymakers, so there is very little will to make the export process more efficient and transparent, even while government officials totally acknowledge the challenges that exporters face. This is also taking into account that coffee export makes up 31% of export revenues for the country - the current auction system is a mess and failure but there are so many parties with vested interests and so many people employed by the current system that a dissembling of the structure is simply not going to happen. The question now is how and whether the structure will be improved - there's no cultural value for transparency and accountability in bureaucratic processes

It's not all dismal. The Ethiopia of today is completely different from the Ethiopia of five years ago. Addis is a vibrant and developing city with a metro line, a fantastic food scene, commercial centres and hotels cropping up everywhere, and a thriving arts and music scene. As the World Bank consultant put it: Ethiopia is where Central America was 10 years ago. As I mentioned in an earlier newsletter, receiving coffee from our Central American partners is much more smooth and efficient than it is getting coffee from East Africa. This consultant believes that Ethiopian policies and business culture are heading in a similar positive direction.

- Melanie

How is Pricing Determined Anyway?

We all know and agree that coffee prices are too low and this is certainly the case in Ethiopia where the average farmer (owning an average of 0.1 ha, or 200 trees) earns USD $260 per year from coffee. Even in Yirgacheffe, where coffee prices are about three times higher, the income is too little to properly support a family’s needs on.

Yet we also notice that prices for Ethiopian coffee are increasing year-to-year and not just for the top qualities. So what are these increases based on?

In the case of Q1 coffees, the price increases (in my opinion) are fair. When we compare the price we’re paying for Kochere gr. 1, taking into account its cup quality in comparison to what we’re paying for for top qualities elsewhere, the price is similar. But we’re not just seeing increased prices for Q1s, we’re seeing exponentially increasing prices for the lower qualities too. Last week Yirgacheffe AQ1 was sold at ETB 2000 per 70KG of parchment while A3 fetched 1950 ETB. What is this A3 pricing based on?

In comparison to most of the other countries we’re working, this is the reality about most Ethiopian coffee:

• Much of it is not traceable and what is claimed to be traceable is often questionably so (even at top quality levels). In contrast, in Central and South America, farm-direct relationships are the norm for specialty coffee.
• There is very little investment in evidence-based agricultural practice. Say what you want about the FNC; their investments in research and continuous developments in best agricultural practices are indisputable.
• Processing and quality control is mostly at a lower standard.

Last week I talked about the importance of intercultural understanding in coffee buying. Within the course of the past week, I had the chance to meet with professionals from other industries here: a tourism operator, grocery store owner, embassy representative, an architect, and a woman who runs a workshop and sells the textiles it produces. Some of these women are Ethiopian and others come from abroad. The common concern everyone expressed is that business in Ethiopia is becoming harder and harder. In the past 3-5 years, conditions have noticeably deteriorated. In the case of the grocery store owner, she is dealing with customs that doesn’t understand the products (e.g. camembert cheese which they think is spoiled, rather than knowing that its smell is supposed to be the way it is) she’s importing and whose ‘solution’ is to burn the food it refuses to clear. Burning food: in a country where people are without food!

For next week’s newsletter, I’m working on finding out what has become of ECX’s geo-tagging system, which it implemented at the beginning of the season.

- Melanie

CCS' Love Affair with Ethiopia

While it's necessary and perfectly normal for us to visit our partners at origin once or twice a season, we're in Ethiopia for the third time this season. This time I'm spending six weeks with our main exporter, Heleanna Georgalis of Moplaco Trading Co. The purpose of this stay is to both help Moplaco complete some of its ongoing projects (e.g. helping to complete an informative and user-friendly website about its many functions and activities) and also for CCS to gain better insight into this amazing and incredibly complex coffee origin.

At this very moment, CCS' first USA-bound container of Moplaco coffees (see above photos) is passing inspection at CLU (Coffee Liquoring Unit) which is overseen by the Ministry of Agriculture. Every single bag is sampled from three places and then these samples are mixed and cupped before the shipment can be cleared for export. This inspection process is just one in many that coffee undergoes throughout the season before it can be shipped to our warehouse and then to you.

One of the things that is always on my mind when addressing the complexities of any origin (because they all are in some way or another), is trying to work out what people really mean when they say things and whether I'm understanding them from their point-of-view. This topic of intercultural complexity is something that coffee buyers have to consider but few have written about. Maybe it's because for some this process is reflexive. At CCS, however, intercultural communication is something we are exploring more and choosing to discuss because it is such a fundamental aspect of doing specialty coffee, which hinges on strong and trustworthy relationships between all the people throughout the supply chain.

We've found that having closer cultural similarities with our Latin American partners and their partnering government institutions has meant there is a base level of understanding about how to conduct business. This means that on average, receiving the coffees we choose from these origins are fairly straightforward. This is not generally the case with our East African suppliers and in particular, the frequently changing legislation they have to go through in order to export our coffees.

So, while it is unlikely that I will learn all the relevant ins and outs of Ethiopian business culture and communication during this prolonged stay, the goal is for us to learn and convey the current state of specialty coffee in Ethiopia and hopefully answer some questions you have about this fascinating origin.

- Melanie