Telling Coffee’s Bean-to-Cup Story Through Cooperatives
This is the eighth post in the Cooperative Development Learning Series, which highlights learning from USAID’s Cooperative Development Project. Click the links to read the first, second, third, fourth, fifth, sixth, and seventh posts.
This post was authored by Marcus Laws.
People in the United States love their coffee, and increasingly, love specialty coffee. The U.S. coffee industry was valued at over $225 billion in 2015 with specialty coffee consumption increasing from nine percent to 41 percent during 1999-2017. In fact, 59 percent of all coffee consumed in 2017 was specialty coffee. This trend highlights U.S. consumers’ increased preference for higher quality coffee but also an increased interest in coffee farmers, as achieving higher quality starts with the producer. More than ever, consumers want to know their coffee’s bean-to-cup story.
NCBA CLUSA, the US’s oldest and largest trade association promoting the cooperative business model for more than 100 years, through the USAID Cooperative Development Program’s (CDP) trade initiative, has promoted the bean-to-cup story over the past several years by facilitating direct relationships between Latin American coffee cooperatives and US consumers. Trade activities focused on strategic exposure visits to facilitate direct, sustainable trade relationships that benefit Latin American specialty coffee cooperatives with organic and Fairtrade certifications.
Exposure visits included origin tours to coffee producing countries, participation at regional trade fairs, U.S. coffee trade shows and other events that put project-supported cooperatives and their member-farmers in direct contact with buyers, roasters, and other supply chain actors. By forming just one direct partnership with a cooperative, a roaster or buyer can gain access to hundreds or thousands of coffee farmers and see for themselves how direct trade and investments in organic, Fairtrade, and other certifications positively impact farmers’ livelihoods. They can see the bean-to-cup story unfold and share it with US consumers.
“These exchanges promote transparency, the flow of information about the farmers, the production conditions and origin of the products we buy.”
-Cervantes Coffee owner Marialy Justiniano, a participant on NCBA CLUSA’s November 2016 exposure visit to Guatemala and attendee at the March 2017 Coffee Origins event in D.C. Justiniano called these events fundamental for her business model of connecting customers to farmers.
FECCEG, a Guatemalan specialty coffee federation representing approximately 2,100 small-scale farmers, has built important trade partnerships through the CDP trade activities. For example, FECCEG has significantly increased sales from hosting U.S. roasters like Cervantes and participating in U.S. trade shows like the Specialty Coffee Association (SCA) expo. After providing coffee for cupping events at the expo, FECCEG secured two new contracts for $180,000. The Coffee Origins tour resulted in over $500,000 in sales.
“It has been difficult to access the market without a big budget for publicity. To have the chance to present the product in person to several buyers is an important opportunity for us.”
-Nidia Gómez, FECCEG’s general manager
In the spirit of Cooperative Principle 6: Cooperation Among Cooperatives, NCBA CLUSA’s trade project initially focused on linking smallholder farmer cooperatives to U.S. grocery cooperatives, but over time the strategy expanded to include supply chain actors in the broader U.S. coffee market, such as roasters, who understand the power of the cooperative business model.
Coffee roasters often take more supply risks than large distributors and wholesalers and are eager to form relationships with coffee farmers and cooperatives, taking trips to origin and staying engaged throughout the production cycle. These trips facilitate long-term relationships which can translate into sustainable supply chains for the roasters and reliable clients for the producers.
NCBA CLUSA’s Coffee Origins event hosted in DC in March of 2017 highlighted this supply chain approach. The coffee trade fair and networking event brought together over 30 organizations and included roasters, buyers, service providers, donors, and government officials to showcase specialty coffee produced by cooperatives from Brazil, El Salvador, Guatemala, Honduras, Nicaragua, and Indonesia.
“The main goal for us today was to have a chance to meet new buyers—specifically roasters—because we are usually in touch with the importers, who are in between the farmers and roasters, but it’s perfect to talk directly to the roasters. For us, this networking and connection is a really good match.”
-FECCEG’s Nidia Gomez
Throughout the six-year trade project, NCBA CLUSA continued to learn and adapt its approach to better support Latin American cooperatives in increasing trade of their specialty coffees. Hands down, exposure visits have proven to be the most effective tactic. By facilitating exposure visits to build direct trade relationships with cooperatives, supply chain actors like roasters can get to know the individual farmers. After all, it’s the farmers who own and govern the cooperatives.
Remember Cervantes’ Justiniano who participated in the origin trip to Guatemala? Fast forward to today, and she and Cervantes Coffee are getting ready to host a young woman from FECCEG for three months at their roastery in Springfield, Virginia. She will learn the ropes of small-batch roasting and the wholesale and coffee shop business. What better way to tell the bean-to-cup story than to literally work alongside a farmer and connect customers with the producer of their coffee?
Marcus Laws, Program Manager at NCBA CLUSA, has over 10 years of international development experience, including managing the $12.9M USDA Coffee Rehabilitation and Agriculture Diversification Project in El Salvador, the $16.2M USDA Safe Agriculture/Food Export (SAFE) project in the Dominican Republic, the $649K USAID CDPIV project facilitating market linkages with coffee producing cooperatives in Central America, and NCBA CLUSA’s U.S.-Cuba Cooperative Working Group. Mr. Laws has technical expertise in coffee value chains, specifically on quality grading and cupping, organic input production, financial management, farm management, marketing, and market linkages. He served in the Peace Corps in El Salvador from 2006-2009.