Life is not normal for us at the present time, nor it is normal for our coffee producers. This pandemic is having broad sweeping effects on the global economy and its ability to operate and function in even the most basic of ways. From our industry perspective, containers to ship coffee are in very short supply, and shipping slots for sailings are becoming harder and harder to obtain, therefore delaying shipments by one to two weeks. These delays are not a too much of a problem for us at this moment in time, but the knock-on effects of the delay in cashflow will challenge the sustainability of our producers..
The single biggest threat to our coffee producers has been the reaction from the consuming nations. With cafes and restaurants closed around the world, the wholesale coffee market has disappeared overnight. Many small roasteries have put themselves into hibernation, ready to wake up and start roasting again on the other side of this devastating pandemic. All the while, other roasters are fighting through, driving online sales and managing reduced staffing levels, strict internal distancing measures and new safety guidelines. While consumers purchasing behaviour has been driven online, these sales are much smaller in quantity that that of any wholesale account, and from a commercial point of view, any uptake in online sales is quickly eaten up by the loss of the wholesale volume.
From my own recent experience and from conversations I’ve had with both exporters and importers over the last few weeks, it is becoming extremely commonplace for coffees that are not contracted to be cancelled, as well as pre-orders. Roasters are looking at the cashflow of their businesses disappearing swiftly, and are not financially able to follow through on their commitments to purchase coffee. With the uncertainty of when this pandemic will be over – our Central American producers are going to be the hardest hit. Their harvests are ready to move, right in the throes of a global crisis.
Here at Ozone and HASBEAN, we’ve had to make some really tough decisions on coffees that we had not yet contracted or early negotiations we were in with producers. We’ve had to either reduce our shipments or completely change our plans – and have worked through this as a team, with a lot of care and thought.
I’ve spent many years traveling to producing countries, trying to work as closely with our producers as possible, trying to build strong relationship, and have worked to understand specific situations and specific needs. Wherever possible, I’ve always tried to buy exclusively from farms. I love working with a coffee that no one else has, and having the opportunity to share it with the world. It’s what I love. It’s my passion. But now, these exclusive deals bring risk to these producers. These contracts mean that they haven’t spread their risk by having more than one buyer. We have never deemed this relationship model as being ‘high risk’ before, as we have always grown alongside our partners, and have taken the good times with the tough. But now, more than ever, we have a responsibility to ensure that these relationships and exclusive contracts are honoured.
It has been a priority of mine over the last two years to introduce long-term contracts for our key producers, to give them a sense certainty and enable them to plan what price they will get and what volume they can expect from us. We are, of course, honouring these long-term deals, even though we have no firm date of when this global pandemic will end. We made a commitment to these producers, and we will remain committed to them.
Having had conversations with peers in the industry, it is apparent that not everyone is in the position to honour existing contracts. Exporters have reported contracts being ripped up as roasters’ markets dry up – their reduced orders and the panic of how to meet their obligations being too overwhelming. And this in just the first few weeks of the lockdown period! Unfortunately, I can only expect things to get worse before they get better.
This is an issue unique to speciality coffee. Supermarket shelves have been cleared and re-stocked of coffee, and whilst the New York C-Market is low, it has been low for a while now and has seen a small rally in the pandemic. We must protect specialty coffee as we know it. We need to keep drinking specialty coffee – not just to help roasters survive, but to make sure the producers who have created interesting processes, planted exotic varietals and worked hard to create this speciality market are supported by our global coffee community. Whilst governments in the developed world have made grand gestures to furlough and support businesses, we need to recognise and acknowledge that our producing partners around the world do not have this same luxury.
Now is our time to stand up and make sure that the coffee world that we love and enjoy is protected. So, keep drinking speciality coffee, keep safe and wash your hands!