Coffee School - The Coffee Value Chain

The global commodity chain of coffee involves a long line of producers, middlemen, exporters, importers, roasters, and retailers before reaching you, the consumer. At AGRO Café our goal is to reduce this chain to only those involved in adding value to the product.

Coffee is one of the world's most valuable traded commodities, second only to petroleum. There are approximately 25 million farmers and workers in over 50 countries involved in coffee production around the world. Coffee was traditionally developed as a colonial cash crop, planted by wage laborers in tropical climates on large plantations. Coffee producers, like many agricultural workers in Canada and around the world, are kept in a cycle of poverty and debt by the current realm of globalization that is designed to exploit cheap labor and keep consumer prices low. An estimated 11 million hectares of the world's farmland are dedicated to coffee cultivation. The largest producer and exporter is Brazil, followed by Colombia, Vietnam, Indonesia, and Mexico. Around the globe, the annual consumption of coffee has expanded to 12 billion pounds.

Coffee is often depended on as a source of export earnings for many of the developing countries that grow it. Most small farmers only have the opportunity to sell to middlemen and brokers who are commonly referred to as coyotes. These coyotes are renowned for taking advantage of small farmers, paying them below market price for their harvests and keeping a high percentage of the profits for themselves. Large coffee estate owners usually have the financial resources to process and export their own harvests. These coffees are sold at the prices set by the New York Coffee Exchange. However, extremely low wages and poor working conditions for farm workers characterize estate coffee jobs.

Importers purchase green coffee from established exporters and large plantation owners in producing countries. Only a few importers like AGRO Café's partners buy directly from the small farmer cooperatives. Importers bring in large container loads and hold inventory, selling gradually through numerous small orders. Since many roasters rely on this service, importers wield a great deal of influence over the types of green coffee that are sold in North America. Because of AGRO Café's unique position as importer, roaster, and retailer we are able to select the best coffee available on the world market not just what is available to us.

Large roasters usually have one blend of recipes and sell to large retailers - the Big Three (Kraft, which owns Maxwell House and Sanka, owned by Philip Morris; Procter & Gamble, which owns Folgers and Millstone; and Nestle) maintain over 60% of total green bean volume. Micro roasters, like AGRO Café, offer the product we have all fallen in love with known as specialty coffee. Most roasters buy coffee from importers in small, frequent purchases. Roasters have the highest profit margin in the value chain, thus making them an important link in the commodity chain.