Sourcing

WHAT DOES DIRECT TRADE COFFEE MEAN TO 49TH?

We strongly believe in having our own definition of Direct Trade. When it comes to transparency, 49th Parallel Coffee Roasters shouldn’t decide what information is disclosed and what is not. Information should be readily available for our consumers and other coffee companies alike.

When we sat down with our team to brainstorm what Direct Trade coffee really means, the following questions were raised; is simply visiting producers considered Direct Trade? What must be done on the farm or with the farmer for it to be Direct Trade? How many bags of coffee need to be purchased from the farm? Is it only specialty coffee that’s available under the Direct Trade heading or is it all coffee? Half premium/half commercial? What does buying directly even mean? Could Direct Trade be a way to minimise other interactions with the farm and create Farm Gate Prices⁴?

Much like other coffee certifications, including Fair Trade and Rainforest Alliance, Direct Trade loses more meaning each year. Buyers are desperate to know whether products are fairly priced and sustainably grown, but certifications like the above simply add more players to the game without generating any more income. Essentially the same amount of capital is involved, but more players are vying for a cut. This means farmers are being forced to share their income with other parties.

To reduce this financial impact, 49th has taken a different approach and has begun working one on one with farmers, investing in their businesses directly. While this approach involves a larger financial risk for us, it allows us to eliminate the middleman and increase income for farmers. We have thus concluded that Direct Trade is simple; when we visit a farm and launch a new partnership, our goal is to become a key investor in the farms crop. Becoming a key investor creates stability in our relationship and assures the farmer of a long-term partnership, allowing us to collaborate to increase quality and yield. Our main goal is to define a Farm Gate Price⁴ with more farmers in the future and separate it from FOB (Free on Board)1 prices. This will help us work together more efficiently, pay better prices and in turn, help us to see results faster. We believe the constant pursuit of quality and sustainability is integral to any specialty coffee business, which is why both are critical factors in our coee sourcing philosophy.

 

 

CRITICAL FACTORS IN THE 49TH PHILOSOPHY OF SOURCING COFFEE

TRANSPARENCY
We are open and clear about each step of our purchasing process and aware of the impact Direct Trade has on the price of our product.

COMMITMENT
We commit to creating long-lasting partnerships with mutual benefit and encouraging development.

RESPECT
Each of our relationships is built on transparent communication and mutual respect.

IMPROVEMENT
We strive to better learn and understand the challenges faced by farmers so we can help them improve their business.

GROWTH
We strive to create initiatives that benefit both our supply chain partners and us.

SUSTAINABILITY
We believe that for coffee to be sustainable, all practices along the supply chain must be taken into account. Our main goal is to increase the number of farmers that engage in Farm Gate Pricing⁴.

STRATEGY
To continue sustaining a steady supply chain and quality coffee throughout the years, we approach each of our partners individually. We meet each of our producers multiple times a year to help reinforce our dedication to their work. These trips give us a better understanding of the challenges they face and allow us to do our best to help maneuver these obstacles together. This process ensures the strength of our partnerships and by assisting in the process we get the best possible coffee.

These People for Example



Martir Fernandez from 49th Parallel on Vimeo.

We visit each of our producer partners as often as we can (annually is the norm for us), and communicate throughout the year.

We collaborate too. Financing Martir’s dryer is one example. When they grow, we grow with them. If you want to know the nitty gritty, check out our Transparency Update.

View our Transparency Update

Transparency Archive
Transparency Update 2014 - 2015