By Mayra Orellana-Powell, Catracha Coffee Company
At the recent SCAA Symposium, I was honored with the opportunity to speak about small coffee producers from my hometown in Santa Elena, Honduras. Using the experiences of my cousin Rosibel and her husband Toño, I talked about how importers, roasters, and consumers working together with small producers can impact the lives of millions.
Small producers with profitable coffee businesses, like Rosibel and Toño, are empowered to make contributions in their communities that improve healthcare, food security, gender equality, income diversification, education, cultural heritage, and more. Beyond the social impact gained from small producer coffee, there is also a practical value for everyone in the supply chain, because prosperous communities can produce quality coffee year after year. Alternatively, one small producer after another will fail to make a living through coffee, and walk away from coffee production.
I established Catracha Coffee Company because I wanted a business for small producers where they could improve their earnings by selling better quality coffee to specialty coffee roasters. There are more than 400 small producers in Santa Elena, who have traditionally sold their coffee in cherry to middlemen. This transaction makes it very hard for small producers to demand a better price for their coffee, because middlemen are generally only interested in volume with little regard for quality.
Profit sharing is central to our business model. In the past four years, we have purchased coffee parchment well above the commodity market price from small producers, and returned profits when the coffee is sold to specialty coffee roasters. Profits are generated from higher prices paid for improved quality. Catracha started with 13 producers, and this year we are working with 40 producers. The goal is to give each of the 400 producers in Santa Elena, no matter how small, an opportunity to produce their best coffee and access the specialty coffee market.
Much of our success has come from the willingness of small producers to reinvest in the quality of their coffee. Producers use portions of their profits to make infrastructure improvements on their farms, which in turn, improves the quality of their coffee. They are also participating in a quality improvement project and year-round seminars designed to provide a clear plan for consistently producing quality coffee year after year.
When small producers receive recognition for their role in the coffee supply chain, they are inspired to believe in themselves and strive for excellence. We export single farm micro-lots with the producer’s name printed on the jute bags. Producers are also cupping their own exported coffee with coffee professionals who visit Santa Elena. This year, our producers even communicated through social media with a barista to help him share their story when he competed with their coffee. The efforts of producers are also documented in the film The Way Back to Yarasquin, which has screened at multiple venues throughout the world and in Santa Elena.
Beyond coffee, producers have taken their successes and contributed in their own communities. Producers organized a medical brigade for the community of Santa Elena with Honduran doctors who volunteered their services to people who do not have regular access to healthcare. Our farmers hosted a two-day youth conference for the children of Santa Elena with Honduran volunteers who presented seminars and workshops about coffee quality, jewelry making, gardening, cooking with the vegetables they grow, music, crafts, and self-esteem. The mayor, who is also one of our producers, formed a seed bank to support family gardens. Our producers have formed a group called “Women in Craft” to diversify their incomes by starting craft businesses. This list of contributions from small producers can be endless when they are empowered to make a difference in their communities.
We have a producer-driven approach, but the attitude of those on the consumer side of the equation is equally important and often challenging for small producers to understand and directly influence. I have benefited from living in the United States, where I can advocate on behalf of my community for which I feel a deep sense of obligation and responsibility. However, it is easy to become paralyzed by the unpredictable whim of the commodity market price and the production cost variations from farm to farm, harvest to harvest, and country to country. Despite these complexities, a small producer’s importance in the supply chain must be reflected with a price that compliments the value of his or her coffee when it is roasted and sold to consumers.
The Goizueta Business School at Emory University and Transparent Trade Coffee, a non-profit organization dedicated to informing consumers about coffee producers, are advocating for green coffee valuations based on the roasted coffee retail price. With this methodology in mind, we can start to better assess the value that we place on producers in the supply chain. For example, green coffee priced at less than $2 per pound and retailed as roasted coffee for more than $20 per pound suggests that a coffee producer’s contribution in the supply chain is worth no more than 10 percent of the total value. This distribution dramatically undervalues the efforts of small producers in the supply chain.
Side-by-side, the efforts of producer and roaster are equally important, and the value created in a finished product ($20 per pound roasted coffee) should be proportionately distributed to reflect the efforts of both. Taking cherry from a coffee tree and transforming it into high quality exportable green coffee requires skill and craftsmanship analogous to those required from a roaster who transforms green coffee into roasted coffee. Small producers also take on longer-term risk, planting coffee varieties with greater maintenance requirements, added labor costs associated with more meticulous cherry picking and sort requirements, and additional costs for milling and preparation for export.
I believe that the value attributable to green coffee production should approach 50 percent of the roasted coffee retail price when small producers are fully engaged in their obligation to produce great coffee and contribute to the prosperity of their communities. The value that small producers contribute may vary from transaction to transaction for any number of reasons, but in the end a value-based methodology provides a framework to transition from a mainstream supply chain where the efforts of small producers are undervalued, to a value chain where the contributions of producer and roaster create win-win relationships.
There are many more companies, organizations, and individuals who are equally committed to working with small producers either because of a personal connection to a coffee community, a desire to make the world a better place, or simply for the love of coffee. Our collective collaboration is an opportunity to better advocate for the importance of small producers in a value chain that supports prosperous communities ready to meet the market’s demand for great coffee.
In 2011, Mayra Orellana-Powell realized her dream of starting a coffee business (Catracha Coffee Company) that would have an impact in Santa Elena, Honduras, the community where she was born and raised. Mayra’s family has harvested small quantities of coffee on family farms for generations. Through Catracha Coffee, Mayra has helped farmers from Santa Elena access the specialty coffee market. In 2013, Mayra became the marketing and outreach director at Royal Coffee in Emeryville, California. In her role at Royal Coffee, she takes joy in bringing the stories of coffee producers from around the world to consumers.