Technology & the Changing Role of Coffee Traders

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By Rob Stephen & Hayden Kwast, Olam Specialty Coffee

Over the past few decades, technology has changed the very nature of human interactions and relationships. Phone calls, letter writing, and in-person meetings have been complemented–and in many cases–replaced by social media posts, text messages, and video chats. The historically conventional and traditional coffee importer has been forced to adapt to the times and engage in ways that might shock their sedate and respectable predecessors. Put simply, coffee importing companies are becoming increasingly tech-savvy.

Yet even with all these new ways to communicate and interact, the role of the importer has not changed significantly. At the end of the day, importers still do (nearly) all the things they have traditionally done. But the day-to-day tasks of the traders, logistics, finance, and QC professionals who work there have evolved significantly over the last 15 years. Let’s quickly review some of the key functions an importer performs for a roaster in order to delve more deeply into these changing roles.

The most familiar role to roasters is that of the coffee trader. Historically, traders were the roaster’s “gatekeepers” to the world of green coffee. Roasters knew little about current qualities, quantities, market conditions, etc. without calling and talking to their traders. Traders controlled all the information. In those times, owning the supply relationship was the secret sauce, and it was carefully guarded.

Now, as the coffee world has changed, both roasters and importers have adopted better technology, and the vast majority of this information is available online at a roaster’s fingertips. On some importer websites, roasters can now access inventory availability instantaneously, view real-time market prices, read detail on a coffee’s story, and peruse the arrival cupping notes. Traders let roasters know when their favorite coffees are available online. Roasters can even request samples online and place full bag orders for spot and forward coffee. And of course, communication and visibility directly to coffee producers by roasters is at a level that would never have been dreamed of 20 years ago. No more secret sauce!

Technology has changed the status quo in the coffee trade in the same way that it has disrupted countless other things in human history. For example, the effect of ubiquitous email and the nearly complete reach of the internet even in rural countries is almost impossible to describe. And as a good roaster friend of mine once said, “Signing and faxing contracts is so 2013.”

So, in an age of easy access to information, who needs a gatekeeper? Is the role of the trader becoming obsolete? Absolutely not. Traders have become green coffee consultants. Their main role now is to provide context. Think of the vertigo that an endless menu of anything can induce, especially when the decision is an important one. In an age of limitless information, what is required is someone who can help you sort out the important pieces, the ones that will matter the most to each individual roaster and their brand and value proposition.

In this environment, a good trader can act as a bridge between the roaster’s point of view on coffee, and the coffee itself. It’s not just discussing the relative merit of different coffees (which we still do a lot of), but also providing background on the strengths and weaknesses of processing types, countries/regions, individual producers, and seasonality and its role on the availability of coffee, as well as providing insight into how a roaster’s pricing and purchasing decisions might affect quality, availability, and the ability to buy more from that producer in the future. It’s still a complex task to manage a supply chain, and today’s technology has in some ways dumped that complexity into the lap of the roaster. The right importer can provide clarity on what decisions need to be made and thus free up the buyer’s time to focus on things that matter to the business, like inventory control, cash flow, quality assurance, and training.

These benefits are not all just roaster-facing. With today’s technology, we are able to raise the profile of high quality producers in a way that is far-reaching and impactful. When we promote a producer on our website, or a Twitter post, or post a series of photos from a visit on our Instagram—we aren’t just trying to sell coffee (although there’s that, too!) but we are also creating a brand for that producer. A brand which will end up not only being owned by the producer, but also by their customers who will take that brand and make it a part of their own personal brand—their way of expressing the choices that they make with coffee.

As its brand spreads, a powerful new form of price discovery is created for that producer. Just like any other popular product with limited availability, the coffee that all the cool kids are talking about on Facebook can quickly become the subject of a bidding war, or spur an increase in visits by people looking to secure a supply. Coffee has always been a branded business, but with technology’s role in creating visibility for producers, the ownership of those brands is shifting from the roaster to the producer.

Another important function that importers fulfill is that of supply chain management. Importers manage the complicated task of making sure a coffee makes it safely from the mill to the exporting warehouse, onto the ship and finally to the destination warehouse, all on time and on budget. Anyone who thinks it sounds easy has not managed through a west coast port strike or a container shortage in Brazil! As our technology has moved from Telex to fax to email and even to RFID and bar codes, one of the transformative effects has been the searchable and thus instantaneous availability of logistics information. “Where is my coffee?” is no longer a rhetorical question—with the technology we have we can tell you almost precisely where a given coffee is. As trucking companies embrace new technologies, we are fast approaching a day where logistics has been democratized and supply chains are optimized yet again. Altogether, importer investment in technology helps improve information-sharing and speeds up the pace of business along the coffee supply chain.

Technology in the import trade has put an often-intimidating deluge of information in the hands of producers, roasters, and even consumers. Traders of days gone by would scarcely recognize this world where roasters call and want to discuss the experimental fermentation techniques of the producer they visited last week. They might raise an eyebrow at receiving some “#love” in an Instagram picture of a roaster smiling next to the cooling tray. But they certainly would nod knowingly as they listened to today’s traders, talking to roasters and producers, asking questions, matching coffees to customers, and dutifully making sure that coffees are where they are supposed to be. The more things change, the more they stay the same!

HaydenWhile in graduate school, Hayden Kwast launched Koffeelink, a website where coffee producers could market directly to roasters. Soon after, Olam asked him to create a similar site for their suppliers and roasters. Hayden created and launched Olam’s website and now manages their ecommerce and marketing.

 

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Rob Stephen is the International Business Development Manager for Olam Specialty Coffee in Providence, RI. He is a certified Q Grader and Instructor for the Coffee Quality Institute (CQI) and a past president of the Specialty Coffee Association of America (SCAA).