May 21, 2020 3 min read
With coronavirus restrictions easing around the country, there has been a collective sigh of relief with the hope that life is starting it’s slow return to a new normal. What is still unknown is what the long tail impacts of COVID-19 will be on many industries, including specialty coffee, and what this will mean for the coffee you love.
There have been immediate and highly visible impacts on cafes, with thousands of jobs lost and venues forced to close, in some cases permanently, but what about those ‘behind the scenes’ in the specialty coffee supply chain?
Let’s start with roasteries. Green coffee should be used within a year or less of harvest, dependent on how the coffee ages in storage. Like other businesses, we use forecasting to ensure our stock levels are accurate and that we can be roasting and supplying fresh coffee, and not be left with overstocks we may need to dispose of. Forecasting in the current climate is impossible, it’s hard to know what will happen next week let alone next month. We then run the risk that if we don’t purchase the coffee we had planned someone else might, or it just won’t be brought into the country at all, and we miss out. Which leads us onto importers.
Green coffee is generally purchased via importers, and here it gets more complicated. With uncertainty at the roastery side, planned contracts are being put on hold. That means less money coming in, and in turn, less money making it back to coffee producers - who we’ll get to next. For importers that can afford too they can make the choice to hold stock, and offer more ‘spot stock’ (essentially floor stock) for people to buy smaller qtys which helps roasteries, but carries risk.
Some may choose to wait, and import the coffee when they are more certain of demand, however there are now serious issues with supply. There is a global shipping container shortage - Ethiopian and Kenyan coffee exporters cannot find any, and China has been shut down. Shipping ports have reduced staff to manage social distancing, and road transportation is delayed globally. Even if they want the coffee, they may not be able to get it. Guatemala for example, has only recently enforced a ban on all non essential travel, meaning now, no coffee is allowed to move around. As every country's experience, impacts and timelines with coronavirus are unique, it's very difficult to forecast when this will change.
But what about producers?Like hospitality workers, coffee producers cannot work remotely. Their livelihoods depend on working the land, and as the coronavirus ravages coffee growing countries their lives are at risk. Brazil is the world’s largest coffee growing nation, and currently has the highest number of confirmed COVID-19 cases behind Italy.
Then there are the financial impacts. Contracts with producers are being cancelled. For large farms who produce specialty coffee and commodity coffee (which has increased, likely due to a surge in at-home instant coffee and low grade grocery store brands) this will be absorbed, but for small specialty coffee producers, the loss of income could mean they can no longer operate.
For one of our young Guatemalan producers Marlon Del Valle, there were almost instant cash flow issues due to cancelled contracts. At Rumble, we have been very fortunate to be able to forward advance Marlon US$3K to ensure he has had the cash flow necessary to help him manage, but he is just one, and now their borders are locked.
So how does this impact your daily coffee?
The reality is, if specialty coffee producers cannot operate, if no one is purchasing their coffee or if they cannot get a fair price for the quality coffee they produce, they will close or pivot to farm lower quality ‘commodity coffee’ crops or other crops all together.
Importers and roasters will have less accessible volume. You will have less choice. That beautiful small batch single you enjoyed in your V60 last week just simply won’t exist.
What can you do about it?
If you are familiar with Rumble’s Transparency Project, you are aware of how important it is to know where your coffee is coming from and how much was paid for it. Now more than ever, in the face of COVID-19’s far reaching and devastating impacts, this is essential.
Your choice to support your local specialty cafe touches every part of the coffee supply chain. Paying the right price for your daily brew, means we can do the same with our producers, and ensure that we all can keep enjoying these coffees long into the future.
Learn more about pricing transparency and Rumble's Transparency Project - HERE.
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