Brewing Success: The Role of Logistics in the Global Coffee Supply Chain

Many people worldwide start their daily routine with a cold brew or cappuccino. The National Coffee Association estimates that over 150 million Americans consume coffee daily.  It is estimated that approximately 2.25 billion cups are consumed daily worldwide. 

The coffee industry is projected to generate around $200 billion annually. These numbers highlight the coffee industry’s enormous scope and significance to the global economy. That’s why coffee is one of the most traded commodities and drinks consumed worldwide.

The foundation of the coffee market is the coffee supply chain. The structure of each distinct coffee chain significantly impacts the cost and quality of coffee. Consumers and business owners often ask these questions when buying coffee: who grew it, what variety is it, and when was it harvested? These are all important factors determining how much coffee beans cost to transport and purchase.

Your coffee’s journey starts with the supply chain. Coffee beans must be effectively delivered to roasters from various parts of the world. After roasting, they are packaged with care and sent to coffee shops. A well-run supply chain guarantees a constant supply of premium beans, ensuring that the flavor of your favorite latte stays the same.

A small farm’s typical coffee supply chain entails the beans going from the field to a processing facility and then to a nearby export business. After that, the local export business will ship the coffee beans overseas to an importer or trading firm. Coffee roasters will then process the beans into products you can buy online or in stores.

Coffee cooperatives are becoming more popular as they promote sustainable initiatives and are better for coffee farmers. Small farms can pool resources and ensure a fair product price by joining cooperatives. Offering these services inside the cooperative lowers the cost of outside providers like processors and exporters.

For a small farm, sending their produce to a cooperative before exporting it directly to a coffee roaster in another country is seen as a better way of supplying coffee.

For a bigger coffee producer, growing, processing, and exporting the beans directly to a coffee roaster is possible due to the scale of the operations and access to more complex distribution lines.

Seven Key Links of the Coffee Supply Chain

The coffee supply chain has an intricate web of processes and stakeholders involved in producing, processing, distributing, and transporting coffee from the farm to the customer.

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Many competitors of different sizes are engaged in brand, pricing, and market segmentation competition. Weather, insect damage, politics, and the regional economies producing coffee affect coffee’s quality and cost.

Growers, processors, intermediaries, exporters, suppliers, roasters, retailers, and consumers are involved in the supply chain. Not every one of these stakeholders is involved in every process. For example, farmers and roasters have more direct interactions with coffee production, whereas farmers hardly interact with coffee shops or retailers.

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1. Coffee Growers 

Coffee growers, producers, or farmers are the first link in the supply chain for coffee.

Some producers manage sizable plantations and make extensive use of mechanized harvesting methods. Others will operate on a farm that is only one or two acres in size.

Growers will employ various harvesting techniques based on the resources at their disposal. The farm’s characteristics (such as soil and inclination), the grade of coffee they hope to achieve, and other environmental aspects also factor in the production.

For instance, in Colombia, many farms are family-owned and located in frequently remote and hard-to-reach places. This particular socio-economic attribute makes harvesting machines impractical, so coffee beans are grown and harvested manually.

2. Processors

Growers can process their coffee or work with a processing company. Some farms will use another farmer’s services if they lack the necessary space or facilities.

Some locations are used only to process coffee from surrounding plantations. Additionally, as discussed above, a cooperative of farmers will frequently manage these processing units.

It is possible for a processing station and its employees to serve as the center of activity for a whole town. They facilitate the testing, storage, and access to goods in export markets. Farmers will often perform quality control checks at these locations as well. 

3. Exporters

Typically, exporters purchase coffee from many plantations and sell it to customers abroad.

They source premium beans using their industry experience before marketing and selling them to foreign markets. It can be done through collaborations with current coffee buyers or through auctions.

Exporters are constantly changing due to specialty coffee customers’ growing desire for comprehensive details of where the beans are obtained.  Additionally, there is a growing need for origin trips so suppliers or roasters can observe firsthand the circumstances on the ground. 

4. Middlemen/Intermediaries

There will also be people and entities to facilitate communication and assist with logistics within the supply chain. For example, they can arrange transportation between fields and holding stations. Some pack coffee and link producers with exporters and purchasers. The rest prepare goods for shipment abroad.

5. Suppliers

Coffee suppliers purchase their beans from exporters in their country of origin, such as Brazil, Ethiopia, or Colombia. They will then sell them to roasters in markets like the United Kingdom or the United States. They can have many long-term partnerships with an existing client base of roasters and will usually trade in significant amounts. 

6. Roasters

 Green coffee beans are turned into beans that roasters can use to create coffee. Roasting requires high skill, and many roasteries have proprietary methods or styles.

Certain roasters specialize in selling just single-origin coffees from a specific region. Some people will combine and roast a variety of beans from various areas.

Every business and roastery will have different values and methods for roasting and sourcing. Depending on where roasters source their beans and their relationships with others in the coffee supply chain, prices can vary greatly. 

Relationships between specific roasters and growers play a significant role in developing the specialty coffee market. Roasters communicate market demands to farmers, enabling them to modify their approaches and plant new varieties of coffee. It expands the market and elevates the appeal of particular coffees.

Larger roasters can distribute the finished product to grocery stores, cafes, hotels, restaurants, and other wholesale coffee establishments.

7. Retailers and Cafes

The final link in the supply chain is where coffee is sold. A specialty coffee shop or café that follows “third-wave coffee” ideals will place a high value on the details of the coffee beans’ journey through the supply chain. Others could be more concerned with buying in bulk for a discounted price.

Logistics Trends in the Coffee Supply Chain

All stakeholders engaged in the coffee supply chain must thoroughly understand it to make better decisions and implement sustainable practices and quality control. 

Understanding the intricacies and challenges helps coffee companies build stronger partnerships and maintain transparency.  Heeding these things will eventually provide customers worldwide with a remarkable coffee experience.

Packaging and Storing Coffee

Throughout the supply chain, storage and packaging are essential to preserving the freshness and quality of coffee beans. In addition to shielding the beans from the elements, proper packaging maintains the beans’ taste, fragrance, and general quality. 

Proper storage conditions are necessary to stop deterioration and guarantee that the coffee reaches customers in the best condition.

There are a few things to take into account when packing coffee. First and foremost, the material used for packing must act as a barrier against air, moisture, light, and smells since these things can destroy the flavor and fragrance of coffee. Airtight-sealed cans, foil-lined bags, and vacuum-sealed pouches are common packaging materials.

When it comes to storage, coffee beans have to be kept in a dark, cool place. Beans can degrade rapidly, losing flavor and quality due to heat, humidity, and sunlight. 

Since coffee beans are highly absorbent, they can readily pick up unwanted flavors and scents. Iit is best to keep them in sealed containers away from heat sources, direct sunlight, and strong odors.

Furthermore, avoiding extreme temperature swings is essential since they may result in condensation within the container and affect freshness. Store the coffee beans in smaller, sealed containers to keep them fresh and reduce air exposure.

Track and Trace with Blockchain

Interestingly, technology can help as well. Blockchain technology can aid the coffee industry in overcoming its lack of traceability, which hurts sustainability and quality. It offers a solution to the imbalance in the coffee supply chain and helps build a more sustainable and balanced sector.

Monitoring and tracing the origin of the materials utilized in the supply chain and production processes can help determine the coffee’s location, method, and source. Every stakeholder in the supply chain can identify the batch into which it was included, and, finally, the lot number of the final product.

You can find out if your coffee exporter complied with all legal requirements set forth by local governments to stop labor exploitation and guarantee humane working conditions. You can also check if the coffee farm follows ethical and sustainable business practices.

Transporting Coffee Around the World

There are many challenges involved when moving coffee beans from fields to roasters and, finally, the customers. For coffee to get where it’s going fast without going bad, fast and efficient transportation is needed. Supply chain disruptions can result from various problems, such as inadequate infrastructure, delays in customs clearance, and unforeseen accidents. 

To overcome these obstacles, businesses need to invest in effective transportation networks, backup plans, and real-time tracking technologies.

Coffee shipping internationally requires careful consideration, including cost, volume, destination, and delivery needs. Working with seasoned freight forwarders or shipping brokers who specialize in coffee logistics is also essential. 

These experts can manage paperwork, handle customs, recommend the best shipping option, and ensure adherence to all international rules.

Coffee companies can efficiently move their goods globally, preserving the beans’ integrity, quality, and freshness by carefully weighing their alternatives and working with the best logistics specialists.

From the field to your cup, the coffee supply chain is complex and full of challenges. There’s a lot to think about when you want customers to enjoy the perfect cup of coffee. Meticulous sorting, close quality control, and efficient shipping are the backbone of a strong logistics strategy for the coffee industry.

ZhenHub helps you bridge the gap between all the main players of a coffee supply chain. Make international shipping easier with connected logistics software. Have real-time tracking over each shipment and get access to a global network of fulfillment centers. Sign up at our website for free. Contact our fulfillment experts to get started with our digital logistics solutions.