Direct Trade is a buying model where the purchase of coffee is made directly with the farmer with no intermediary.
We’ve been doing direct trade here at Alchemy Coffee for over ten years and currently, seventy per cent of all the coffee we buy is direct trade.
It’s something that we’ve always wanted to do since we started in the coffee industry back in 2004.
We’ve always wanted to do direct trade – there are ethical reasons:
- you know you want the money for your coffee to go to the farmers.
- you want the farmers to get more of it.
- you want the farmers not to be exploited.
- you want to build on relationships with people.
- you want to be involved in the product as much as you can and that means being involved with the people who produce it.
We went out to Guatemala as part of the judging team for the 2012 cup of excellence.
We went out as an observer which meant that we were able to cup everything that the judges cupped, but our scores weren’t allocated to the final score, however, we got to sit at every table.
We got to be involved in every conversation and it was a fantastic opportunity because we were able to visit mills.
We were able to visit farms.
We were able to have conversations with farmers.
The Producers Roundtable was like speed-dating for coffee farmers. Guatemala is broken up into a series of regions and they had a table for each region where they split the Buyers and the Roasters into groups.
We sat at each table with the translator and we spoke to the farmers from that region and asked them what they wanted from a Buyer and said what did we wanted from the Producer.
You have a conversation, you exchanged business cards and then you move on to the next table.
The most useful part of the visit was just having an opportunity to talk to producers because then you can talk to each other afterwards. You can Skype and you can email
It took away a lot of the fear of direct trade because it wasn’t buying produce from a mysterious place with mysterious people. It was just buying from people had already met.
Alchemy Coffee is a small company – we would love to be able to go into the deepest darkest coffee country and find a tiny little farmer that has a tiny little piece of land that produces two bags of coffee a year and be able to direct trade with that farmer.
We’re not quite there yet because we financially can’t undertake that risk of it all going wrong and the more there isn’t really a better word for it but the more unsophisticated in business
The other side is the more risk there is so we tend to work with some slightly bigger farms that have reputations that have histories so that we have minimized that risk slightly because we’re dealing with someone on the same sort of sophistication level as ourselves which is not that sophisticated but a little bit above the minimum and that means that we build up a relationship with someone where we both feel that that person’s got some skin in the game speaking to the farmers in Brazil speaking to the farmers in Guatemala and El Salvador they are high-quality coffee.
Farmers who grow coffee at reasonably high elevations so these are coffees that are fine, they’re slow maturing and they’re generally quite a low volume so they can’t sell at the see market commodity price.
These farms can’t really even survive at the Fairtrade price because the Fairtrade price is set for a bigger lower quality lower elevation mass-produced coffee. These farmers are using more fertilizer, they’re using more intense labour, they’re on high elevations where the coffee doesn’t mature anywhere near as quickly or in anywhere near as higher volume, so their
costs per hectare are higher. What we do is we cut the coffee, we taste the coffee and we agree on a price between Alchemy Coffee and the farmer based on the quality of
The ideal scenario is to be dealing with someone for many many years. In Guatemala, we’ve been buying from San Sebastian from Edgar and Esther Wado for about 10 years. I see no reason for that not to continue.
Lucia in lust Mercedes in El Salvador, it’s over five years that we’ve bought from her – ideally, we want that to go into decades.
We want to be buying for a very long time it gives them the security of knowing that a portion of their crop he’s already sold – it gives us the security of knowing that we have a
supply of a coffee that we love but what it also gives us is an iterative ability to influence the coffee for our benefit and for theirs as well.
For example, we did an experiment with Lucia one year – we asked her if she would do a natural process to coffee where it’s dried in the cherry rather than having the cherry
removed like in a washed process. This is something that Lucy has not done before but she was willing to do it for us – because we have a relationship, Lucy knows that we’re going to buy the coffee, good or bad. We agree that we will buy the coffee because we’ve asked for the experiment and that means she’s prepared to do it and it tasted fantastic and we bought more.
Alchemy Coffee has three rules for direct trade:
- Rule One – you physically have to go to the farm every season and see the production
- Rule Two – you have to pay the farmer directly with no intermediaries
- Rule Three and this is the different one – you have to sit and have a meal with the farmer and talk about something that’s not coffee – that way it becomes a human interaction and not a transaction