How To Start Sourcing Direct Trade Green Coffee Beans
Many roasters today want to trade directly with coffee farmers. There's plenty of reasons why: economic equity and sustainability are more feasible when you're dealing directly with the people growing your green coffee.
But what does this trading model entail? Is it feasible for the average coffee roasting business?
Sourcing green coffee through a direct trade relationship provides plenty of advantages for both roasters and farmers—but it also requires a significant amount of planning, investment, and time to operate effectively and ethically.
In this guide, we’ll show you the ins and outs of direct trade, along with:
How to source green coffee from around the world using the direct trade model
The pros and cons of sourcing coffee directly from a farmer
Why direct trade isn’t the gold standard for green coffee sourcing
What Is Direct Trade?
Before we dive into the details, it’s important to note that there is no official industry definition for direct trade. For some roasters, the term refers to the transaction: a roaster buys coffee directly from a farmer. For others, the phrase "direct trade" refers to the mutually beneficial, long‑term sourcing relationship that farmers and roasters foster by working together to produce great‑tasting coffee at an agreed‑upon price (usually above market prices).
The term was popularized by the specialty coffee company, Intelligentsia, which initially coined the term more than 20 years ago. However, as noted in the book, God In a Cup by Michaele Weissman, Intelligentsia wasn’t the first to use this model—they were just the first to use the phrase “direct trade.” Massive coffee companies, such as Peet’s Coffee, Starbucks, and Green Mountain Coffee, have purchased green coffee directly from farms for decades.
The idea behind direct trade—no matter how you define it—is that by cutting out the middlemen, roasters can pay producers more.
But is this always true?
A Few Direct Trade Considerations
While direct trade sounds like the ideal way to source high‑quality green coffee, it’s not a perfect model. A variety of factors can cause challenges, impacting the farmers’ and roasters’ decisions to pursue direct trade.
Risk and Responsibility
Without middlemen, roasters are responsible for much of the trade and shipping process, including arranging the transportation of coffee from origin to destination.
However, navigating international trade and distribution isn’t easy. At some point, most roasters end up working with other parties to mitigate risk and ensure the safe, legal delivery of a crop to the final destination.
Country‑Specific Barriers
Different coffee‑producing countries have unique challenges that make direct trade difficult, from government regulations and farm locations to socioeconomic issues.
For example, almost all of the coffee in Ethiopia is traded through the Ethiopian Commodities Exchange (ECX). While it is possible to trade directly with a source in this country, doing so can be complicated if you are not familiar with the territory and regulations.
Importers Aren’t Evil
The concept of direct trade inadvertently implies that importers are bad actors in the supply chain. In reality, specialty coffee importers develop solid, trusting relationships with small‑ and large‑scale coffee farmers all over the world and work to connect their coffee with the right roasters. Their green coffee prices often reflect this commitment to ensuring farmers earn a sustainable livelihood.
Many roasters prefer to work with importers due to their expertise on the trading and importing process and connections to specific farmers. As a roaster, it is your responsibility to ask potential importing partners about their sourcing and transparency practices and ensure they align with your goals and mission.
How To Get Started With Direct Trade
Does direct trade sound like the right route for your coffee roasting company? While there’s no standard way to go about directly sourcing green coffee, these steps will help guide you through the process.
1. Research coffee farms.
Start by identifying the farms you’d like to work with. There are a few ways to do this:
Social Media
Farmers use platforms such as Instagram, TikTok, and Facebook to promote their farms and connect with roasters around the world. Scroll through these apps to find farms in the countries you’d like to establish a relationship with.
A simple Google search will yield a variety of results. Keep in mind that due to geographic and socioeconomic factors, some farmers may not have a website (or other marketing channels) for their business.
Professional Network
It never hurts to ask around! Talk to fellow coffeemakers in your network and see if they have farmers they recommend.
Keep in mind that roasters in your professional network may already have defined relationships and agreements with farmers. Be wise not to step on any toes or ask farmers to violate existing direct trade contracts.
2. Build relationships.
Arguably the most pivotal part of direct trade is cultivating a relationship with the farmer. Remember, just like any other personal and professional relationship, it will take time to build a mutually trusting connection with farmers.
If possible, visit the farm. This in‑person opportunity to communicate, see the farm, and experience the coffee will give you a better understanding of the farm’s capabilities and quality. If an in‑person experience is not possible, inquire about virtual tours through photos or a video call.
When visiting, be respectful of the farmer’s time, cultural norms, and expenses. Providing samples and hosting roasters can be a costly endeavor for small farms. But this face‑to‑face opportunity can be an invaluable part of the roaster‑farmer relationship.
3. Roast samples.
After you chat with farmers, they’ll send you samples of available green coffee lots. It is your responsibility to determine if these coffees meet your needs.
Be sure to discuss lot quantities and availability with your farming partners. For direct trade to be worthwhile and cost‑effective for all, you may need to commit to purchasing the entire lot rather than a few bags.
4. Finalize agreements.
If the sample roasts are up to par, you’ll need to discuss the terms of your direct trade agreement. Make sure any contracts or agreements include details about:
Coffee quantities
Coffee quality
Coffee pricing & additional fees
Coffee certifications, if applicable
Crop transportation & distribution
Roaster & farmer responsibilities
Transportation and delivery terms
Terms of payment
Arbitration terms, in case of errors/conflicts
Since there are no defined rules for direct trade relationships, you may want to have an unbiased third‑party review any contracts before signing.
5. Involve importers and other third parties, if necessary.
Unless you have experience dealing with international trade, you’ll likely need assistance from an importer on at least your first shipment. Importers understand the ins and outs of transporting coffee crops across borders—a valuable resource for your first direct trade agreement.
While using an importer may not fit some definitions of “direct trade,” this can be a valuable route for the first few agreements.
6. Roast and promote the coffee.
Once the green coffee has arrived, it’s time to roast it and get it into your customers’ hands.
Since telling a coffee’s story is a major part of marketing, talk with the farmer about how they want to communicate their story. Some farmers may want to leave out certain details or may not like having their face on marketing materials. Other farmers may want to collaborate on promotional opportunities.
Once you’re selling the coffee to consumers, remember to keep your farming partners updated with customer feedback and sales trends. The work doesn’t stop once the coffee’s roasted—it’s an ongoing, year‑after‑year process!
The Pros And Cons Of Direct Trade
As with any type of trade, the direct trade model has distinct advantages and disadvantages. Before engaging in any direct trade transaction or agreement, take the time to determine if the pros outweigh the cons for your business.
The Pros
Direct trade sourcing was created with the best of intentions: find the world’s best green coffee and pay farmers a fair price above the market average.
As a result, direct trade can have a widespread positive impact, including benefits such as:
Transparent Sourcing — Direct trade provides producers and roasters with an avenue for transparent processing, communication, and pricing. Roasters know exactly where a coffee is from, how it was grown, and what processing methods were used. This transparency, in turn, leads to a trusting relationship for both parties.
Sourcing Options — By pursuing a direct trade relationship, you open the door to unlimited sourcing opportunities. You aren’t beholden to only the lots available through an importer. You have the freedom to find specific coffees and work with trusted farming partners on collaborative farming projects such as specific varietals or processing methods.
Enhanced Coffee Quality — As a result of higher wages and long‑term relationships, direct trade models can lead to the production of higher‑quality coffee. When funds are reinvested directly back into the farm, and not into the pockets of middlemen, farmers can make significant improvements to equipment, soil quality, and farming processes—all of which benefit the coffee.
Long‑Term Relationships — Among the greatest benefits of direct trade are lasting relationships with coffee farmers all over the world. These relationships are built on mutual trust and a shared passion for coffee. As the years go on and new opportunities arise, while sales increase, these relationships strengthen and benefit both parties.
Direct trade can be a valuable avenue for both coffee roasters and farmers. When done well, the benefits far outweigh the challenges.
The Cons
Remember, direct trade is a form of international trade. Cross‑border transactions require several moving parts and don’t always run smoothly, especially when importers, exporters, and brokers are not involved. As a result, direct trade can have some serious downsides:
No Certification — Unlike programs such as Fair Trade, there is no certification or governing authority for direct trade relationships. As such, this leaves room for gray areas, unethical practices, and no safety net when trading plans go awry. If something goes wrong or a party fails to deliver on their promises, either the farmer or roaster is responsible for the cost incurred and the damages.
Language Barriers — While language barriers are easily remedied with a translator, they do pose an issue. Miscommunication due to language differences can cause numerous headaches, especially when dealing with overseas shipping, customs, and more.
More Responsibility — Without intermediaries to facilitate the transaction and transportation of a crop, it’s all up to you and your farming partners to complete the process. Although this means a more direct process, it requires roasters to become well‑versed in international trading logistics and shoulder the responsibility.
Increased Investment — Beyond paying farmers a higher price for green coffee, direct trade also requires roasters to take on additional costs in the form of shipping and logistics fees, as well as insurance payments. This increase in required funds tends to shut out smaller roasting operations with limited budgets.
Managing Mishaps — What happens when the coffee finally arrives and it’s not the same quality as the pre‑ship sample you received? This can happen due to processing issues at a washing station or mill or a mistake at the port. But who is responsible for these errors? Who foots the bill? Direct trade relationships must account for how mishaps are managed, especially when entire lots of coffee are on the line.
Direct Trade FAQs
Given that direct trade does not have an official certification or defined process, you probably have more questions about the model. Let’s check out a few of the most‑asked questions.
Is direct trade more sustainable or ethical than working with an importer?
There is no clear‑cut answer to this question. In an article for Imbibe Magazine, Tim Weldelboe, a roaster and businessman based in Oslo, Norway, explains:
“In some countries, the ‘middle men,’ who people think are all just greedy people who exploit coffee farmers, are doing a great job in terms of financing farm inputs, training farmers in good agricultural practices, and also finding customers for the farmers and connecting the farmers with the buyers. This is a service that is sometimes vital in order to get good‑quality coffee, and should not be looked down upon. It is also a service I am willing to pay for.”
Most specialty coffee importers have excellent relationships with their farmers and partner with roasters willing to pay a premium price for high‑quality coffee—leading to greater economic prosperity for all involved. Importers also bring a wealth of trading knowledge and experience to the table, which can be useful when discussing prices, quantities, and arrival times.
As a roaster, you must consider your priorities and look for the avenues that best suit them. For some, working with a reputable importer who provides transparency and honest communication is the best way to access great‑tasting coffees. For others, direct trade might be the best option. There’s no wrong answer.
What’s the difference between Fair Trade coffee and direct trade?
Fair Trade is a coffee‑sourcing certification program that aims to improve the lives of those producing the crop. This is accomplished by requiring roasters to pay a minimum price for coffee. This floor price covers the costs a farmer incurs for producing coffee and operating a farm.
It’s important to note that this price is the minimum amount certified brands are required to pay farmers. Many roasters and brands pay well above this floor price for Fair Trade‑certified coffee.
Additionally, for a coffee crop to be considered Fair Trade, every actor in the supply chain—including importers, exporters, and brokers—must be certified by the program.
Direct trade is not a certification program, but rather a model or ideology for sourcing green coffee. As we’ve outlined throughout this article, direct trade occurs when a roaster purchases green coffee directly from the farmer without the use of middlemen.
Is direct trade better for the environment?
Not necessarily. The term direct trade does not guarantee or govern a farm’s processes, only how the green coffee beans are purchased and distributed. This means the coffee can be produced using all types of farming practices, including techniques that may not be considered organic or environmentally friendly.
Start Buying Ethically Sourced Green Coffee Beans
For many roasters, jumping into the world of direct trade takes time. You won’t develop relationships with farmers and understand the ins and outs of international trade overnight.
However, that doesn’t mean you can’t access high‑quality, ethically sourced green coffee. The Bellwether Green Coffee Marketplace is home to a multitude of green coffees that have been carefully sourced from farmers around the globe by our expert coffee team.
We develop long‑lasting direct relationships with each of our farming partners and work to set year‑after‑year contracts to ensure longevity and prosperity for each farmer. As part of our responsible sourcing practices, Bellwether also provides financial resources for the local farming communities to help create a better tomorrow.
