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Demystifying the coffee supply chain

Written by algrano
on July 14, 2021

When browsing through the marketplace, you might notice that Algrano started referring to growers as either sellers or producers. This change of terms was put in place to reflect more accurately the roles of different actors in the supply chain. The word grower has become too broad and vague to communicate how different organizations act in the producing countries available on Algrano. By doing this, we hope to make it easier for roasters to understand who is involved in the sale of a given coffee and to provide extra transparency and traceability! 

What is a seller?


A seller is any individual or organization that manages the sale of a coffee on the platform. Sellers can be farmers and cooperatives but also exporters and mills who are not involved in the actual growing process. Sellers receive all sales updates, notifications and contractual information. They will also answer the questions roasters may have about the coffees they are offering.

seller

What is a producer?

Most times on Algrano, the seller will also be the producer of the coffee. Other times, an exporter or cooperative can represent one or several producers. For example: Cafesmo in Ocotepeque, Honduras, is a cooperative with a seller account. As they sell single-farm lots as well as blends they will have a producer profile for the coop, through which they offer all their regional blends. When they sell single farm micro-lots, such as the coffees of Marcela del Valle, they will create a separate producer profile for Marcela’s farm. In that case, the coffee page will display a different seller (Cafesmo) and producer (Marcela).

producer

What changed?

On the ground, nothing really changed. The exporting process continues to work the same. However, this split gives roasters a better overview of the supply chain in producing countries and more transparency on who is the counterpart on contracts. Is it the producer of that coffee itself or is it someone or an organisation representing that producer? This is also indicative of the payment flow. When the producer is being represented, payment will flow from Algrano to the organization and then to the producer. In the case of cooperatives and washing stations, payment is done upon delivery of cherries or parchment and a second payment might follow later in the year.

Producer-seller-1

A bit of context

When Algrano was launched back in 2015, the company was focused on working only with single-farms and micro-lots. Describing all users as “growers” made sense because they were all involved in production. As we grew and started receiving demands for large volumes of coffee, we started partnering with like-minded cooperatives. 

In 2018, Algrano started onboarding producers in Ethiopia, our first African origin. Working directly with farmers in Africa was, and it still is, a complex operation that we could only manage if we had a team on the ground and bought coffees upfront as small growers need to receive payment in advance. Had we done that, we would be working as regular importers.

In Africa, we decided to work with Cooperative Unions that could centralize sales for many cooperatives, and also private exporters who own washing stations and/or had vertical integration arrangements. Cooperative Unions don’t own the coffee (it remains the property of the cooperative until it is sold). Exporters own the coffee but offer full traceability due to close relationships with the washing stations. At this point, the term “grower” no longer reflected the supply chain on Algrano accurately.

 

New suppliers, same vision

Recently, in 2020, Algrano also started working with a handful of private exporters. On one hand, our onboarding has quite a complex mix of criteria, including being tech-savvy and understanding FOB pricing. Many farmers still struggle with technology and with promoting themselves to access the market, making it harder for them to succeed in the marketplace. The private exporters we onboarded meet the needed criteria and are able to create a more diverse offer for roasters so that everyone is able to find what they are looking for. 

Some of these exporters work as service providers (The Guat Lab, for example, doesn’t price the coffees themselves and works with a small exporting fee) or provide roasters with the full traceability and the direct link with the producer (San Miguel Coffees and Ensambles all pay price premiums and provide extended services to farmers). More often than not such exporters are also producers themselves, like Vinhal Cafés and Cofinet.

We always prioritize partnering with single farms and cooperatives because the supply chain is shorter. As we grow and make the platform easier to navigate, Algrano will become more user-friendly for less tech-savvy farmers and the requirements to become a successful seller should be reduced. Our goal is to make access to the international market democratic and to provide tools for producers to succeed. We are getting there, one feature at a time.

 

Onboarding

Algrano has an onboarding process to verify all suppliers on the marketplace. We make sure they can offer the quality roasters are looking for with consistency by cupping and calibrating. We also evaluate if they have a sustainable business and enquire about their working model, infrastructure and ethos to onboard trustworthy and like-minded organizations who want to sell directly to roasters. 


Other than being a well-established business with sustainable practices, transparency and traceability are key requirements to offer coffee on Algrano. Overall, we strive to maintain a balance between types of sellers from cooperatives to single farms and to match the level of demand with the number of offers. To know more about the verification process visit the Verified Seller’s page!

 

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Go to the platform to browse new amazing coffees and learn more about producers and sellers.

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Browse coffees

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