The Coffee Supply Chain - How Does It Work?

Have you been thinking about the coffee supply chain lately? If you’re a curious coffee drinker, you may be interested in how your coffee’s quality or its sustainability are impacted by the supply chain.

Or, if you’re a shop owner or coffee roasters like us, you’ll probably be watching very carefully how international export logistics and producer supply capacity is impacting delivery timelines and wholesale prices.

In truth, whatever your connection is to the world of specialty coffee, we’re all at the mercy of the coffee supply chain. And knowing a little more about how it works (and the threats that it faces) can help you understand just how appreciative we should all be of great coffee when it’s available to us. 

Whatever your connection is to the world of specialty coffee, we’re all at the mercy of the coffee supply chain.

Who’s Involved?

We go into more detail, but below is a quick sketch of the key links in the coffee supply chain. 

  • Growers

  • Processors 

  • Intermediaries 

  • Exporters

  • Suppliers

  • Roasters

  • Retailers

  • Consumers

In some cases, not all of these parties are involved, with more direct relations taking place between growers and roasters.

Coffee Growers

A Colombian coffee grower - the first link in the coffee supply chain

Whether we’re talking about Brazilian, Ethiopian or Colombian coffee, the supply chain starts with coffee growers (also known as producers or farmers).

Some coffee growers operate large plantations and must rely on machine processing for harvesting. Others will be smaller in scale and will tend to a farm of 1 or 2 acres in size. 

The methods used by growers will vary depending on the resources they have available to them, the conditions of the farm (e.g. soil, incline level), their desired outcomes in terms of coffee quality and notes, and several environmental factors. 

For instance, in Colombia, many of the producers we work with are family run and located in often rural and hard-to-reach locations making machine harvesting impossible.

Learn More About Colombian Coffee Growing 

Processors

Colombian coffee processor supporting the coffee supply chain

Growers can process their own coffee, or, where they don’t have the space or facilities to do this, they may use the services of another farmer or a processing facility. 

Some sites exist solely to process coffee from nearby farms. And these processing stations will often be run by a cooperative of farmers — a small group sharing equipment for the mutual benefit of everyone. 

A processing station and its workers may become the hub that brings together the efforts of a whole community, making it easier to store product, test quality and access export markets. With growing conditions being so similar in certain locations, a group of smallholder farmers can consolidate their efforts under one coffee “brand” or name, such as the name of the region or the processing station. 

Quality control checks and cupping of coffee from each farmer is usually required to make sure that every batch meets the standards of the facility as a whole.

Exporters

Warehouse of Colombian coffee exporter before the next stage of the coffee supply chain

Exporters will buy coffee from multiple farms and sell it to international buyers. And unlike growers, they’re likely to have experience negotiating with international buyers and sufficient resources to market their product for higher prices. 

They will use their knowledge of the industry to source high-quality beans before promoting and selling them to various international markets. This may be through auctions or through existing partnerships with green coffee buyers. 

With over 90% of Colombian coffee being exported, it’s no surprise that so many of these organizations exist. However, their offerings can vary considerably in terms of minimum order limits, storage methods and transportation.

We’re also seeing these organisations evolve due to the increasing demand from specialty coffee buyers for detailed information about the farms that beans are sourced from, as well as the desire to organise origin trips so roasters or suppliers can see what conditions look like on the ground for themselves. 

These exporters also need the correct licenses to support international trade (which is something many individual farms don’t have) and all sales must be logged with the FNC who must grant permission before coffee is transported. 

Intermediaries

Several individuals and organisations will also exist to support interactions between different parties in the supply chain and help with logistics. For instance, they may connect growers with exporters and buyers; organise transport between farms and holding stations; pack coffee, and generally get things ready for international export.  

Suppliers

A coffee supplier buys coffee from exporters in the country of origin, such as Brazil, Ethiopia or Colombia, and sells them to roasters in markets like the UK or U.S. They’ll typically deal in large quantities and may have several long-term relationships with an existing customer base of roasters. 

Suppliers deal in green coffee, which is the best way to preserve freshness before the roasting process. 

Roasters

A coffee roasters at Hermanos handling green beans from the coffee supply chain

Roasters are the people who transform green coffee beans that have been imported into the country into beans that can actually be ground, brewed and consumed by customers. There’s a great level of skill involved in the process of roasting, and many roasteries will have their own house style or approach.

Some, like us, will deal only in single origin coffees from a particular location, while others will roast and blend a combination of beans from several locations. Most roasters will sell coffee directly to customers online, but some may also have their own shops and cafes. 

Branding is an important part of this world and companies will try to build a reputation based on their values, approach to roasting, and the way they source their beans. Prices can vary massively depending on where roasters get their beans from and the types of relationships they have with other parties in the supply chain. 

For instance, a coffee roasters operating in the UK may work with an exporter in the country of origin, or, more directly with growers and cooperatives. This can give them greater insights into how the coffee is grown and reduce prices. 

Importantly, relationships between certain roasters and growers have also helped the specialty coffee market mature, with roasters communicating to farmers the needs of the market so that approaches can be adapted and new types of coffee grown — increasing market potential and the desirability of certain coffees. 

Larger roasters may ship the final product to supermarkets, coffee shops, restaurants, hotels, and anyone else who wants to get their hands on wholesale coffee.

Coffee roasters build their reputation based on their values, approach to roasting, and the way they source their beans.

Retailers and Cafes

Finally, coffee is sold in a variety of places at the end of the supply chain. A grocery store or independent coffee shop may be the last link in the chain before it reaches you, the consumer. 

A specialty coffee shop or cafe prescribing to “third wave coffee” principles will (in theory) place a great deal of importance on the intricacies of the supply chain and the journey taken by its coffee beans, while others may focus more on purchasing large quantities for a low price.

Learn How to Buy Specialty Coffee that’s Actually Good

The Journey of a Coffee Bean

A coffee farmer in Colombia planting coffee seeds at start of the coffee supply chain

To look at things a different way, below are the different stages coffee beans go through before they reach the consumer.

  1. Growing 

  2. Picking/Harvesting

  3. Processing

  4. Transport and Consolidation

  5. Packing 

  6. Shipping

  7. Roasting

  8. Purchase

  9. Brewing

  10. Grinding

  11. Brewing

  12. Drinking

Potential Threats to the Supply Chain

No matter how robust our coffee supply chain is, or how strong our relationships are with our partners in Colombia, a number of threats always exist to us as importers and roasters. 

The inherent degree of risk and uncertainty, shouldered by certain groups or individuals, will ultimately have an impact on the smooth delivery of product to the consumer, as well as the price. 

  • The threat of disease, significant rain or changing temperatures (as a result of climate change) mean coffee yields may vary substantially from year to year.

  • Many farms are located in rural parts of Colombia where road conditions are poor and frequent landslides can cause delays.

  • Similarly, a lack of technology and communication infrastructure in rural locations can make it harder for farmers to coordinate with exporters and buyers, meaning more traditional smallholder farms (which have excellent coffee!) find it hard to liaise with partners remotely. 

  • Issues with international shipping and transportation will always impact the speed of deliveries, and in many cases, the cost that importers face. 

  • Political instability such as protests and strikes can make it harder for products to be transported on time within Colombia. It also makes it difficult for international buyers to visit farms themselves.  

Due to these risks, many businesses are forced to build redundancy into their supply chains. For instance, some have broadened their sourcing parameters so they're not only getting beans from only origin. 

Others have swapped long-term strategies for procurement (to support the brand and accommodate customer taste preferences) with more ad-hoc decisions to source coffee that’s simply available and well-priced at any given time. 

The coffee supply chain comes with an inherent degree of risk and uncertainty

How We Source Our Colombian Coffee Beans

Not all supply chains are the same. At Hermanos, we try to keep things as simple as possible and, whenever possible, work directly with farmers and cooperative groups in the Colombian coffee triangle and beyond. 

We find this is the best way to really understand the story behind the beans and make sure money is flowing to the right places.

 

Discover Our Full Collection of Colombian Coffee Beans! 

 


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