We are coffee lovers, and quality is very important to us in our buying decisions. We choose co-ops whose coffee has a quality and flavour profile we like, and will fit well into our coffee programme. But we also choose co-ops that are organised in such a way that our trade will have a tangible positive impact on the sustainability of production, and on the lives and communities of the farmers who produce it. We do this by paying more, and taking less profit.
Peoples Coffee purchases green beans from Trade Aid Importers (TAI), New Zealand’s largest green bean broker, who buy directly from the co-operatives. We forecast our coffee sales 16 months ahead, specific to each origin, and Trade Aid factor us in when they are setting contracts with the co-ops. We then purchase green beans on a weekly basis from TAI, who pay the relevant profits back to each co-operative annually.
Together with Trade Aid Importers, we travel to origin each year to visit co-operatives at harvest time. We believe regularly visiting our producer partners plays an important role in understanding the realities of farming specialty coffee, and is key to being able to best represent the true value of coffee. Through our visits we are able to see and hear current factors in production, and understand how and why the prices farmers receive in the hand is so important.
Peoples Coffee shares a vision for coffee farmers with Trade Aid Importers, and is thrilled to be supporting co-ops with them, knowing we have a clean and transparent money chain. Buying from a co-op means we have great traceability; we know who grew our coffee, where, how, and exactly how much they got paid.
In order for any coffee to get to New Zealand, a farmer must sell, and a broker must buy, a whole container of coffee. So small lot farmers, who might only produce 50 sacks a year, are unable to directly access the international export market without a middle man. However, this issue is resolved when producers of similar region and affiliation join together to form a co-op. By pooling their resources, they can access the market with an export license, and through mutual profits, can buy and collectively own coffee infrastructure. As a coffee community, they can share a vision and have the means to develop it.
Globally, coffee contracts (how much is paid for coffee) are almost always set using a differential from the New York Coffee Futures (the stock market), where coffee is traded as a commodity. However, the prices we pay to farmers are set through discussions with the co-op to find a price that is reflective of the year they have had, the quality, and where the current NZ pricing market is at. These prices are set to be favorable to producers, but still competitive with other coffee in New Zealand.
Through our business objectives we want to support and help progress the small lot farmer’s family business. We want to share and invest in goals with producers, and build relationships that are more than just a division of profit margins. We want to change the value of a commodity, by recognising the quality and value of the raw product – not just by adding value to it through roasting.
To read more about how we trade, see Rene’s blog on how we trade here: (www.peoplescoffee.co.nz/how-we-trade)