Opening the black box for a sustainable coffee future

Supplying more than a third of the world’s coffee production each year, developments in Brazil have the potential to affect coffee markets worldwide. And due to its sheer size as a coffee producing powerhouse, the country has earned – rightly or wrongly – a reputation for quantity over quality. But the reality on the ground is a different picture as producers respond to market pressures by setting their sights on specialty, rather than a race to the bottom.



Henrique Dias Cambraia, the current generation of a century-old family tradition and Head of Fazenda Samambaia is one of the early pioneers of specialty coffee in Brazil. In 1999, he established San Coffee with a focus on scaling up quality to add value for members of Santo Antônio Estates by expanding and upgrading its production and processing facilities.



Today, San Coffee represents twenty co-operative members who collectively produce more than 200,000 bags of coffee each year. Utilising these economies of scale, San Coffee now has a state-of-the-art milling and warehouse facility in the heart of the coffee producing region of Minas Gerais. Many of its members have earned a reputation for achieving national and international recognition in the Cup of Excellence competitions amongst other categories.

General Manager of San Coffee, Fabrício Andrade, says that as the global market reaches an inflection point where demand begins to outstrip supply, a focus on sustainability will help to drive future trends in the coffee industry: “Although knowledge is our biggest asset it is widely spread and easily accessible. Using advances in science and technology to become more sustainable will play the most important role in the shift from the third to a fourth wave movement in coffee”, he predicts.

In response to the challenges of a changing climate, tighter operating margins and rising expectations around quality each year, San Coffee have now shifted their strategic direction to working towards achieving greater sustainability in their business and production practices.



“Improved farming techniques, research into varietals, processing methods, logistics and more effective and efficient management systems; our principle is to keep ourselves in a state of progress so that we can continue to reduce costs and provide a great service,” he adds. “We believe that good business relies on sustainability and transparency. That’s why we need to look at how the value is distributed along the supply chain. If we are able to convince the consumer to purchase a coffee at a higher value, then we need to offer the consumer a coffee that is higher quality through good farming, harvest and post harvest techniques – while traceability individualizes the coffee lot that gives recognition to the producer”.

Fabrício goes on to highlight another challenge in specialty markets: “Certification is a good thing but consumers want to go beyond that. Even if you want to trade directly there is too much paperwork and many roasters don’t have the time to handle the logistics. That is why our partnership with algrano is a perfect fit as transparent trade will be the backbone of a sustainable value chain of the future”.

Although it may be uncomfortable for many intermediaries along the supply chain, Fabrício insists that opening this ‘black box’ on special interests in the coffee trade is necessary for this change to happen. “Everybody is talking about it,” he says, “we can’t escape the downward pressure that the big coffee companies are pushing on growers to improve yields, but we are reaching the biological and physical limits. Change is happening so fast, and we need to adapt if we are to continue to add value to our growers.”

One way that San Coffee is doing this is through their Beyond Borders project that aims to offer the same model it offers its members to other like-minded growers in neighbouring regions. The initiative provides training to help support producers with the practical knowledge to improve quality and productivity, while providing a service during and post-harvest. This can range from the milling, drying, and quality control, to other crucial aspects of the supply chain such as documentation, warehousing, container loading and providing finance to producers.



João Marcos, a producer from the Small Growers Association (AFASA) in Santo Antonio do Amparo, who participated in this project, says: “The new opportunities provided through this business platform allow for a direct transfer of added value to the producer. This has real impact on our capacity to reinvest in the farm and therefore stay in coffee growing for the long-term”.

Fabrício concludes by adding that algrano is the first service provider to open the ‘black box’ for buyers: “We approach, motivate and empower growers to produce quality consistently as a single origin, helping to tell their stories to specialty buyers through platforms like algrano. Through a mindful connection and different approach to business through transparent relationships, we can help to open the black box for them. That’s how we convince the consumer why transparent trade helps to distribute value more evenly throughout the supply chain – and ensure this extra value reaches the growers”.

This article was commissioned by algrano for the blog series Demystifying the Coffee Value Chain

A new dialogue in direct trade

A tech-based platform could be set to revolutionise how coffee roasters and growers interact and trade with each other. Algrano, a Swiss-based start up that officially launched earlier this year at Nordic World of Coffee in Gothenburg, Sweden, is shorthand for the Spanish phrase vamos directo al grano, or fittingly translated as – let’s get straight to the point. It’s a simple but effective concept that has already scooped a coveted SCAE award for tech innovation. The pioneers behind Algrano are also setting their sights on nurturing a global community of coffee professionals from opposite ends of the speciality coffee value chain by creating a space for dialogue and direct trade. The first shipping container of coffee grown by producers in Nicaragua – some of the them Cup of Excellence finalists – has already made its way across the Atlantic to the port of Bremen, Germany, and the team are now preparing their second container for growers in Brazil.

Visiting coffee producers in Brazil

As the trend in speciality coffee shops making the jump to roasting their own coffee gathers pace, there is greater interest in having more influence over the coffee’s journey from the crop to cup. Algrano is responding to this need by building the bridge between farmers and roasters  and overcoming the logistical challenges and risks of moving small quantities of green coffee from one continent to another. Price per kilo, export and delivery costs are presented clearly on the platform and roasters have the opportunity to pay a premium above the cost of production to support improvements in agronomic practices or social projects.

The platform also helps to improve transparency in the coffee value chain by enabling farmers to present their coffees to new speciality markets and customers that they would not otherwise have access to. More than just an online marketplace, the ability to strengthen the ethos of traceable ‘relationship coffee’ where buyers and sellers are able to directly engage and share information offers huge potential. This is particularly potent in an industry where established coffee merchants can still hold a disproportionate balance of power in the complex supply chain.

Algrano co-founder, Gilles Brunner, who has an academic background in international relations and development wanted to explore how the private sector can provide innovative sustainable solutions to global agricultural supply chains. It was after a year of working in the field to support Brazilian coffee farmers achieve certification such as Rainforest Alliance accreditation that the idea of help growers and roasters to interact online took root.

Algrano Co-founder, Gilles Brunner

Brunner developed the idea with co-founders Christian Burri and Raphael Studer. The team was selected by the Startup Chile programme in 2013, and later Startup Brazil in 2014 to work with Fair Trade co-operatives to test the platform. The initial response from growers was extremely positive but it was not until they took their concept to the Speciality Coffee Association of America (SCAA) to understand the needs of roasters that the platform shifted to a trade platform where coffee could be bought directly from origin.

In May this year, the team met with growers in Nicaragua to train them on how to set up their own profiles and post images or updates onto the platform’s dedicated newsfeed. Gilles feels strongly that content should be largely producer-generated so that an active community can be created from the grassroots up. “Our number one purpose is to connect growers with roasters. Since the launch we’re really happy that 140 roasters have now registered online and can request samples from growers up to two weeks before the container closes. The value that we bring is to consolidate all the demands of the roasters into the one container and ask the exporter to prepare and ship the container to its destination”, he says.

“We don’t import coffee and store it in a warehouse. We want the roaster to choose the coffee that crosses the ocean, and we think this has real value. Roasters tell us that it takes time and money to source really interesting micro lots and we want to make it easy for them and sustainable for producers to do just that.”

The Algrano team are now busy establishing links with coffee farmers in Brazil so that they can present a container with growers and exporters from the world’s largest coffee producer once the harvest of the 2015/16 crop gets underway later this year. Gilles adds, “coffee is a universal language and we’re here to help nurture those conversations between growers and roasters”. It’s the kind of language that coffee professionals and customers are keen to hear more of as the conversation increasingly becomes a chorus for transparent, sustainable models of direct trade.