Direct Trade – Myth and Reality

Couple of weeks ago I was invited to do a talk on Sustainability in Coffee at one local food market, and honestly I think I painted a pretty scary picture for those who attended the talk. The truth is I don’t think I exaggerated at all.

If we define the sustainability as “the degree to which a process or enterprise is able to be maintained or continued while avoiding the long-term depletion of natural resources” or “meeting the needs of the present without compromising the ability of future generations to meet their own needs”, we quickly figure out that Coffee Industry as it is functioning now is far from being sustainable.

And if we go deeper and divide the sustainability in economical, social and ecological, and take a closer look at what is happening with the coffee, we’ll be terrified.

Basically, if to put it simply, we are walking towards the situation in the following decades, when drinking coffee will be a luxury. If we’ll have some producers who will be willing to plant and harvest coffee, of course.

Some years ago, when all the hype of direct trade started, I was completely sure that is the answer. That maximum traceability is only achievable with direct trade, and we should just make the chain shorter, by eliminating those intermediaries.

After all, who needs green coffee importers, if you can just write to the producer, get some samples, analyze them, and import the lots yourself?! This way you make sure you pay your producer well, and you will be earning more, because you won’t need to share the cake with those evil intermediaries….


Well, and then I started to work for a green coffee importer.

And understood that what they are doing is basically being a quality control facility, a bank, a warehouse and a logistic company all in one.

And those who earn the most in the chain are actually retailers and roasters.

Definitely not the producers or importers.

Give me a moment and I will explain.

Imagine that you are owning a small independent grocery store somewhere in a village or even a small town, where the goods that you are selling are coming from countries like Ethiopia, Colombia, India…. You are a tiny proud shop, you have your clients that find your product awesome and are loyal to you. You may even have the goal to be sustainable. But you simply don’t sell the container of Ethiopian fabric per month – you probably only sell one container (19200 kilos) of ALL THE GOODS in a YEAR.

How can you actually get the goods? There are various ways.

  1.  You can import 5 containers from 5 origins, spend this money, and try to recover it in 5 years. All is good, but first, you don’t have this money, second, even if you had it, it makes no sense to be investing all of it in the product, and third – well, the product that you are selling is losing its quality over time.

            So – well, not the option.

  1. You can work directly with the producers and import the necessary quantity by air and not by cargo ships. Downsides – well, it is crazy expensive, and far from being environmentally friendly (and therefore sustainable). And yes, you’ll have to deal with the importing process and take care of the documentation, and quality control, making sure that the goods you are getting are the ones you contracted. So the risks are on you – on getting the lot that is lower in quality. Well, and you have to pay for all the goods once they are shipped, you need to have the money. Like, now. You are out of liquidity for some time, until you manage to sell the goods and get your money back.
  1. You can also go to the Big Shop that did all of it for you, reserve the quantity that you need, pay for the quantity that you want to get this month, choose among 1000 different goods and different countries, get a credit, agree that your goods are going to be stored in a warehouse operated the the Big Shop until you need them, and you are not going to pay for it, and also let the Big Shop deal with all the paperwork related to the importing process, which is A LOT OF PAPERWORK. Instead of 5 different goods you can have almost unlimited offer.

What are you choosing?

And, ah, yes, I forgot, you can follow the model number 3, and then spend some money, go to the producing country, take pictures with the producer, and post on social media that you are importing directly and paying a fair price. And then let the importer do the job, but put your name on the bags.

Confusing, right?

What is actually direct trade? Is it the solution? Does it really exist? And if it does, is it sustainable?

To Be Continued

Published by liza maksimova

Q Grader. Roast Master. SCAE certified.

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