Bird Rock Coffee Roasters’ Direct Trade Transparency Report
Central and South America 2015
July 20, 2015
Why is transparency in coffee important? In short, the coffee chain in developing countries can be murky at best. Until Fair Trade came to be, the concept of being able to follow the money all the way to a grower was more fantasy than reality.
With the birth of the Third Wave coffee movement and more and more coffee roasters sourcing coffee at origin, direct contact with growers became more common, and certainly very necessary for roasters wanting to procure the best coffee.
As sourcing efforts expanded, so too did claims from roasters all over the world that they are following a more sustainable and responsible buying protocol. We would agree that in most cases this is absolutely true. But if so, why not make the effort to support the claims? It seems that many roasting companies are unwilling to do so.
When we published our first Transparency Report in 2014, there was only one other roaster in the country who had published the prices they were paying growers for their coffee, Counter Culture. (Please note that Counter Culture has taken an additional step and even had their grower-agreements audited by a third party.)
While so many well-respected and famous Third Wave roasters are making news year-around, it was surprising to us that so few — even the most famous, Nationally-known companies — have not taken the step to actually back up their claims that their souring protocols at origin were of great benefit to growers.
To date, there is still a lack of transparency in Specialty Coffee but we believe things are starting to change. We believe roasters are starting to appreciate the importance of educating consumers about exactly what they are paying for coffee and, in turn, we believe this level of transparency can help consumers make a more educated decision when it comes to making a coffee purchase.
Some outside the coffee industry are helping as well. We wanted to take a moment to point to one website that we believe is helping to highlight the need for transparency in coffee buying: http://www.transparenttradecoffee.org. While not perfect, websites like this can help to push Specialty Coffee towards an era of transparency that is on par with Fair Trade.
Unfortunately, publishing a report like this is far from risk free for a roaster – many without a true understanding of the coffee industry will make claims that we are not paying enough and/or that our retail prices are too high, for example. But the risk is worth it. The more information a consumer has access to, the better. The more a consumer can learn about what it takes to source coffee responsibly the more they will appreciate the efforts of roasters who take this extra step.
For our second annual transparency report, we wanted to delve a little deeper into our farming partners and give the reader a better idea of the type of partners that we are honored to work with. What we are trying to do is more than just buy green coffee, we are trying to do so in a sustainable way — primarily by paying enough for the coffee that a grower can make a nice profit and with some of that profit, re-invest in their farms — and we are trying to work with partners who are making an effort to be both socially and environmentally responsible at the farm level.
As with last year, all prices represent FOB pricing to the farmer – not to the exporter, or broker. (Milling and export cost is included in this price but not import). In addition to the cost of import, there are many other costs associated with our Direct Trade1 coffee that are not included here.
With our Transparency Reports we focus on our Direct Trade partnerships. While roasters may define the concept of Direct Trade differently, we label a coffee as “Direct Trade” if:
1.) We are negotiating a price directly with the grower.
2.) We have visited this grower’s farm and/or cupped the farm’s coffee with the grower.
3.) We are currently working to establish a collaborative and/or long-term business partnership with the grower.
4.) We are looking for ways we can invest in a farm.
Most of the coffees on this list are from Central America. We have spent much of the last eight years sourcing coffee in Central American so we have most of our Direct Trade relationships in that region. While we are sourcing coffee transparently in other countries, Uganda and Kenya, for example, we have not yet established true Direct Trade relationships – at least how we define them, in those countries so we did not include them here.
However, we are including the coffee we purchased via our Roasters United partnership with Portola Coffee and Klatch Coffee. While we would not define this project as “Direct Trade” the Roasters United project is a significant step for us as it does accomplish many of the same goals we try to achieve via our Direct Trade buying philosophy. Or the Roasters United FOB price, 5 cents per pound has been earmarked to support a water conservation project for the farming group we are working with.
Also, as with last year, we have included one Cup of Excellence purchase.
DIRECT TRADE, FAIR TRADE AND THE COMMODITY MARKET
Last year, we highlighted the fact that our Direct Trade pricing is significantly higher than Fair Trade and, certainly, higher than the C market. This year, the C market was actually lower than last year at the time we contracted with the growers yet our average price paid stayed the same. As with last year, we are paying about $2.00 or more per pound than C market price and close to $2 per pound more than the Fair Trade floor. But this is becoming a moot point.
In the past, Direct Trade price negotiations would use Fair Trade or the C market as a starting point. Now, Direct Trade price negotiations no longer seem to account for other buying model prices as a gauge for pricing. In other words, price negotiations are based purely on the quality of the coffee.
It makes no difference if the C market goes down, because good growers are still asking what they believe their coffee is worth – based on quality not based on market fluctuations. And this is very good. We have always supported the fact that a grower should be paid for coffee based on quality not on what the market says because market pricing does not account for a quality cup of coffee – it only accounts for volume/supply and demand. Fair Trade is transparent, for example, but there is no cupping score component for Fair Trade pricing. Average and poor Fair Trade coffee growers get the same money as good Fair Trade coffee growers.
* Commodity pricing for Central America is the “high” for March 2015, not the average for the month.
** For the Colombia Roasters United, we presented the growers with a minimum floor which was much higher than the commodity price at the time of coffee approval.
For more information on Commodity pricing and Fair Trade pricing, please refer to our Transparency Report 2014.
OUR DIRECT TRADE PARTNERS
JASAL: Santa Ana, El Salvador. 2015 is the fifth year we have worked with JASAL. In 2014, we purchased a handful of bags of their Black Honeyed lot that was part of an experiment for them. For most farms, experimental lots are a bit more costly per pound as they are usually working with a small amount of coffee and investing more per pound with labor. Last year we paid $4/lb for the coffee but given the success of the experiment in 2014, they expanded the Black honeyed project and turned it into a normal production lot, lowering the cost per pound. So this year JASAL offered the lot to us for less per pound. We also bought a Yellow Bourbon honeyed lot from them in 2015.
FINCA LOMA LA GLORIA: La Libertad, El Salvador. Anny Pimentel runs this farm on the slopes of the San Salvador Volcano. She contacted us after our Direct Trade video was posted on Daily Coffee News. We cupped some past crop samples from her farm to asses initial quality and we felt potential was there so we made a trip to her farm while in El Salvador in February. We ended up buying four lots from her this year.
We are excited about this new partnership because Anny will be working with us here in San Diego for three weeks in August. This is an outstanding opportunity for us to connect our customers with a grower, as Anny will be working in our cafés actually serving coffee than she grew. We will also be sending a small handful of employees to work on Anny’s farm in the fall.
FINCA LA BOLSA: Huehuetenango, Guatemala. This is the second year we have worked with La Bolsa and we bought a lot more coffee from them this year than we did last year. In 2015, we bought 60 bags of a blend in addition to two micro lots totaling an additional 15 bags. We loved working with farms that take the extra step towards social responsibility. For years, La Bolsa has run a Montessori school on the property that serves up to 70 children of farm workers during the season. This year we are donating 50 cents per pound sold of the two micro-lots at the retail outlets and online to support this school.
EL INJERTO: Huehuetenango, Guatemala. This is the fifth year we have worked directly with El Injerto and the third year we have bought their Red Catuai coffee. El Injerto has demonstrated an incredible commitment to their workers during harvest by establishing day care centers on the farm for children of the workers and by providing all the workers access to health and dental care.
FINCA SANTA ANA: Santa Rosa, Guatemala. Another long-time relationship for us. We feel like Fernando Diaz will be taking this farm to new heights in the coming years as he has invested a lot into the farm over the last year and the results are really starting to show in the cup. This year, we shared an investment w/ Fernando to buy new seed stock. In March, we helped him plant some of the 20 new varietals at this farm.
FINCA EL SOCORRO: Palencia, Guatemala. El Socorro is known for producing fantastic quality coffee and, like El Injerto, always seems to do well in the Cup of Excellence. While El Socorro has long practiced Direct Trade relationships, this is the first year we have worked with the farm, buying the sister Maracuturra lot of the one that placed third in the 2015 Cup of Excellence competition.
ELIDA ESTATE: Boquete, Panama. Wilford Lamastus was named Panama Grower of the Year in 2015. This is the second year we bought their naturally processed coffee. In 2014, Coffee Review awarded us a 95 points for our lot of Elida Estate coffee.
PANAMA LA ESMERALDA: Boquete, Panama. We purchased coffee from this famous estate for 5 years, either directly or via their on-line auction. La Esmeralda is a Rainfortest Alliance farm. Long recognized as the Coffee World’s leader in producing exceptional Geisha coffee, La Esmeralda also does a wonderful job for their employees during and outside the growing season. During the season, they provide food for all their workers in addition to housing and health care. They also offer a scholarship program for workers interested in attending school in the off season.
FINCA LAS CASAS: Naranjo, Costa Rica. Marco Vinicio Brenas is a fourth generation coffee farmer. This family run farm and micro mill produces some incredible coffee, including this years 7th place Cup of Excellence coffee. Jocylynn Breeland, head of Quality and Training at Bird Rock Coffee Roasters, was on the international jury for the Cup of Excellence at Costa Rica, and helped us choose which farm to bid on via the auction.
ROASTERS UNITED 2: Pitalito, Colombia. Roasters United is a cooperative buying project Bird Rock Coffee Roasters sponsors with Portola Coffee Lab and Klatch Coffee Roasting. In addition to supporting numerous growers buy blending coffee from several farms, we also reward micro-lot level coffee farms with a 1.5 million peso farm grant. For more on this project, check out our articles on Roasters United published in Barista Magazine.
Bird Rock Coffee Roasters’ Direct Trade Purchases for Central and South America
Countries: Guatemala, El Salvador, Panama, Costa Rica, Colombia
Total Direct Trade Bags Purchased: 227
Number of Direct Trade Farms: 8
|Coffee Origin Country||Farm/Mill||Coffee Type||C Market Price per lb.||Fair Trade Price per lb.||FOB Price per lb.|
|El Salvador||JASAL||Yellow Bourbon||$1.40||$1.60||$3.50|
|El Salvador||JASAL||Black Honeyed||$1.40||$1.60||$3.50|
|Guatemala||El Injerto||Red Catuai||$1.40||$1.60||$4.50|
|El Salvador||Loma La Gloria||Red Honeyed||$1.40||$1.60||$3.37|
|El Salvador||Loma La Gloria||Yellow Honeyed||$1.40||$1.60||$3.37|
|El Salvador||Loma La Gloria||Black Honeyed||$1.40||$1.60||$3.50|
|El Salvador||Loma La Gloria||Bourbon Washed||$1.40||$1.60||$3.37|
|Costa Rica||Finca Las Casa||COE||$1.40||$1.60||$10.70|
|Panama||Elida Estate||Special Prep||$1.40||$1.60||$6.25|
|Panama||La Esmeralda||Mario San Jose||$1.40||$1.60||$50.50|
|Panama||La Esmeralda||Lino Natural||$1.40||$1.60||$50.00|
Transparency Report 2014
- 1. The report does not include coffees we sourced at origin that we classify only as “Farm to Cup.” Broadly, our “Farm to Cup” coffees encompass all coffee sourced at origin but would not be considered “Direct Trade.” These coffees, though we sourced responsibly and even negotiated a price with a particular farmer, they may have been facilitated via a third party and we did not get the opportunity to meet the farmer, see his/her farm, or even perhaps the growing region where they operate.