The truth behind the Direct Trade marketing

Date Posted:9 April 2016 

We take an in-depth look at Direct Trade coffee sourcing -
reality is that such a small portion of raw coffees in Australia are actually Direct Trade sourced, yet marketing from many coffee companies would have you think otherwise.


Roasters Rant

My wife thinks I have Irish blood in me, but I keep playing the line that I'm 100% Scottish as that's what I was bought up to believe.
She thinks it's my extreme passion and fiery temper when something is wrong that proves without doubt that I'm more Irish than Scottish.
I confess to enjoying a rant when I smell a rat and I've tried to bite my tongue for a long time when I see our industry peers bang on and on about their ultra-exclusive and oh-so special Direct Trade coffees.
There are many coffee companies today using Direct Trade as a key marketing exercise to help them differentiate in what has become the overcrowded coffee market. We ourselves have a Direct trade product and it was one of those essential business experiments you just have to undertake to see if there really is a beneficial outcome for everyone concerned because you really don't know until you live it. Well, I can tell you from first hand experience - it's nothing special and the perceived rewards or differences are just that........a perception.
Companies that promote Direct Trade are projecting the illusion of the roaster traveling to origin, sampling lots on farms and then purchasing special coffee, or that through special negotiating powers they have secured something the rest of us can't get. It's the secret handshake apparently that makes all the difference.
Read between these lines and you soon realize this is precisely what has been occurring for the last 150 years in sourcing of raw coffees that are used around the world - nothing new or exclusive here folks.....except of course the lush pictures and the slick marketing campaign.
It is a wonderful story and it looks so easy.
Selling an emotional journey with food/drink products has been the key element of marketing wizardry in the last few years - especially in the premium quality segments as it helps justify the excessive margins many retailers slug those naive consumers.
The Direct Trade coffee systems are precisely designed to tick many of boxes in our ethical and moral subconscious, drawing you emotionally into the story and entrenching your loyalty and support - the war cry or plea to join them on this journey and help out poor, struggling farmers.
The reality of Direct Trade coffee is a stark contrast to the marketing hype as such a small percentage of coffee is actually Direct Trade in Australia. Unfortunately, there is a lot of mis-representation that continues to occur in our industry because it's not regulated - you can get away with basically saying anything and nobody can challenge, inspect or expose the truths or lies.
So lets take a look at the practicalities of Direct Trade coffees.
Travel to many of the world's coffee origins is considered extremely dangerous without the appropriate levels of care and the assistance of local people to navigate from airports, local transport and accommodation. Coffee farms are in remote areas of the country, high in the mountains - not your typical tourist routes and in many cases require literally a day of travel through pothole ridden back roads - certainly not a pleasant taxi ride from the airport.
Many of the farms and plantations have existing, long standing agreements with local exporters and agents and it's naive to believe these can be gazumped by an outsider rocking up at their doorstep. Some countries also have regulations by way of national systems such as coffee boards and federations run by government or industry agencies. Please don't get me wrong........I know that many coffee farmers exist in a state of poverty or borderline oppression, so my point here is not to shame the farmers, just the marketing profiteers on the retail side.
Testing and timing - how does someone adequately test the coffee at the farm when there are no roasters, barely any running water, limited electricity and basic levels of infrastructure. How can this intrepid traveler also be at the farm at the precise moment the coffee has been harvested and about to be processed - before the farmer, who in most cases has run out of money by this stage and eagerly seeks to sell his crop as a matter or urgency, offers it up to local interests.
Many farmers also do not have the proper processing facilities which is why they sell the cherries into Co-Ops or to local agents. The grading, pulping, drying and packing of the coffee is normally performed by another party, so it's likely already been sold by that stage or at least some form of deal exists. Our Australian traveler may then have to negotiate with the local agents which in effect is the exact same process that Australian brokers already perform - so is this really Direct Trade ?.
Of course, then you must consider the logistics - getting tons and tons of coffee from one country to another safely through the myriad of export and import quarantine requirements. Remember that many of these farms are in remote regions with 3rd world challenges of limited transportation. Once it's landed and cleared customs in Australia what happens if the manifest does not match the pre-shipment samples that were used as the basis for purchase quality - a huge risk that occurs more often than most people realize. Just last week we rejected new arrivals from Guatemala on the basis of the quality not matching our standards.
You see, Direct Trade is not the romantic notion that is often portrayed in the marketing hype. The pictures of the coffee company directors or roasters at plantations are sometimes just nothing more than a plain and simple selfie opportunity. Coffee companies are already struggling to compete against each other in Australia without dealing with the costs and headaches of sourcing from overseas.
When you blow away the smoke and mirrors of Direct Trade you realize the coffee is not unique or exclusive, it's unlikely to have involved higher payments to farmers because these things are never, ever transparently disclosed and ultimately it's not disrupting the industry like a Uber, AirBnB, Netflix or Google - it's just trading exactly the same way it has for more than a century already and it's a good story intended to capture our imagination.