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From Farm to Cup: Unraveling the Coffee Supply Chain for the Perfect Brew
Global supply chain blogs
About the Author
Jayasankar KJ :holds a Bachelor’s degree in Business Administration and currently works as a Supply Chain Management Consultant at Global Supply Chain group, working under the guidance of Vivek Sood. With a strong background in operations management, Jayasankar brings analytical expertise to optimize supply chain processes. As a dedicated professional, Jayasankar is committed to driving innovation and excellence in the field of supply chain management.
More information on Jayasankar is available on https://www.linkedin.com/in/jayasankar-k-j-7476b9189
Global Supply Chain Group is available on www.globalscgroup.com
Introduction
Coffee, a beloved elixir that kickstarts our mornings and accompanies our conversations, has a fascinating journey that spans continents and encompasses numerous intricate processes. From the moment we savour that first sip to the aromatic sensation that lingers, there lies an extensive and dynamic supply chain that brings this cherished beverage to our cups. Join us as we trace the path of coffee beans from their humble origins on remote plantations to the bustling world of coffee shops and retail outlets. Throughout this series, we’ll dive into the multifaceted aspects that contribute to the excellence of your daily brew.
At its core, coffee is more than just a drink; it is a social and cultural phenomenon that brings people together. Whether it’s catching up with friends at a local café, engaging in stimulating discussions during business meetings, or sharing stories over a cup at family gatherings, coffee acts as a common thread that strengthens interpersonal connections. It serves as a catalyst for social interactions, fostering a sense of community and camaraderie.
Beyond its social significance, coffee has become an essential part of daily routines for millions around the world. The comforting ritual of preparing and savouring a cup of coffee is a cherished morning habit for many, providing a moment of tranquillity and preparation for the day ahead. The aroma and taste of coffee often evoke feelings of comfort and familiarity, making it an integral part of people’s lives. Its stimulating properties, primarily attributed to its caffeine content, have made it a go-to beverage for enhancing mental alertness and combating fatigue. From students cramming for exams to professionals needing an energy boost at work, coffee has become synonymous with productivity and increased focus.
The historical and societal impact of coffee cannot be underestimated. In the past, coffeehouses served as centers of intellectual discourse and political discussions. They played a crucial role in shaping the Enlightenment era, where ideas were exchanged and challenged freely. Today, the coffee industry has a vast economic impact on producing countries, providing a significant source of income and livelihood for millions of farmers and workers. Coffee is one of the most traded commodities globally, with its production and export contributing to the economies of various countries in Latin America, Africa, and Asia
In the upcoming blog series, we’ll delve into each leg of the Coffee supply chain. For now, enjoy a general overview of this intricate process.
Supply chain overview of Coffee beans
The Bean’s Voyage:
The journey of a coffee bean is an odyssey that begins in the lush, verdant coffee-growing regions of the world. From Latin America’s rolling hills to Africa’s sun-kissed plains, we’ll delve into the diverse coffee-growing landscapes and learn about the significance of coffee’s origins in shaping its distinctive Flavours.
From Harvest to Roast:
Witnessing the meticulous harvesting, processing, and roasting of coffee beans, we’ll explore the art and science that transform green beans into the aromatic gems we grind and brew. Discover how the methods employed at each stage impact the final Flavour profile that tantalizes our taste buds.
Sourcing and Sustainability:
In our pursuit of an exceptional cup, we’ll uncover the significance of responsible sourcing and ethical practices in the coffee supply chain. Learn about the initiatives that empower coffee farmers and ensure the sustainability of the entire ecosystem.
Transportation and Trade:
Tracing the trail of coffee from remote plantations to bustling trading centers, we’ll explore the complexities of transporting this precious commodity across oceans and continents. Understand the role of logistics and how seamless coordination ensures the timely delivery of beans to roasters worldwide.
The Local Brew:
With a cup of coffee in hand, we’ll venture into the vibrant world of coffee shops and retail outlets. Discover how the coffee supply chain plays a pivotal role in shaping your local cafe experience and the factors that influence consumer choices.
Coffee Market Landscape
The notable companies in the coffee market are (they are listed in no particular order):
- Nestle SA (Switzerland)
- The Coca-Cola Company (US)
- Jacobs Douwe Egberts (Netherlands)
- Strauss Group Ltd (Israel)
- The Kraft Heinz Company (US)
- The J.M. Smucker Company (US)
- Tata Global Beverages Limited (India)
- Illycaffè S.p.A. (Italy)
- Keurig Dr. Pepper, Inc. (US)
- Starbucks Corporation (US)
Exploring Coffee Supply Chain: Unique Characteristics of Growing Regions
Coffee, a tropical plant that thrives in specific environmental conditions, is primarily cultivated in regions near the equator known as the “Coffee Belt.” The coffee-growing regions encompass diverse landscapes, altitudes, and climates, each contributing to the unique characteristics of the coffee beans they produce.
Latin America
Countries: Brazil, Colombia, Costa Rica, Guatemala, and others.
Characteristics: Known for producing a significant portion of the world’s coffee, Latin American countries offer a wide range of Flavour profiles.
Brazilian coffee, for example, is often characterized by its mild, nutty, and chocolatey notes. Colombian coffee is renowned for its medium body, bright acidity, and floral aromas.
Africa
Countries: Ethiopia, Kenya, Tanzania, Rwanda, and more.
Characteristics: Africa is considered the birthplace of coffee, and Ethiopian coffee is renowned for its diversity of heirloom coffee varieties and distinctive fruity and floral Flavours.
Kenyan coffee is prized for its wine-like acidity and complex taste, while coffees from Rwanda and Tanzania often exhibit bright acidity and fruit-forward profiles.
Asia-Pacific
Countries: Indonesia, Vietnam, India, and more.
Characteristics: The Asia-Pacific region is home to a diverse array of coffee types. Indonesian coffees, such as Sumatra and Java, are known for their earthy, spicy, and sometimes fruity flavours.
Vietnam is a major producer of Robusta coffee, offering a distinct bold and bitter taste.
Central America
Countries: Honduras, Nicaragua, El Salvador, and others.
Characteristics: Central American coffees often display a balanced profile with mild acidity and a medium body.
Honduras and Nicaragua are emerging as prominent coffee producers, contributing to the region’s reputation for producing high-quality beans.
Types of Coffee beans
Arabica (Coffea arabica) and Robusta (Coffea canephora) are the two main species of coffee plants cultivated worldwide. They have distinct characteristics that influence the taste, growth requirements, and market value of the coffee they produce
Arabica
Flavour Profile: Arabica beans are celebrated for their nuanced and complex Flavours, often exhibiting fruity, floral, and acidic notes. The taste profile varies depending on the coffee-growing region and environmental factors.
Caffeine Content: Arabica beans typically contain lower caffeine content compared to Robusta, making it a preferred choice for those seeking a milder coffee experience.
Growing Conditions: Arabica plants thrive at higher altitudes with cooler temperatures, requiring specific care and attention. They are susceptible to diseases and pests, necessitating careful farming practices.
Market Share: Arabica coffee accounts for around 60-70% of the world’s coffee production and is considered the premium variety.
Robusta
Flavour Profile: Robusta beans have a stronger, more bitter taste with less acidity compared to Arabica. They often have a full-bodied and earthy profile, sometimes described as nutty or woody.
Caffeine Content: Robusta beans contain almost twice the caffeine content of Arabica beans, making them more potent in terms of energy boost.
Growing Conditions: Robusta plants are hardy and can withstand a wider range of temperatures and altitudes. They are more resistant to diseases and pests, making them easier to cultivate.
Market Share: Robusta coffee accounts for around 30-40% of the world’s coffee production and is often used in blends, instant coffee, and espresso for its crema-enhancing properties.
Harvesting and Processing Coffee Beans
Coffee harvesting is a delicate and time-sensitive process that directly impacts the quality and flavour of the final coffee beans. There are primarily two methods of coffee bean harvesting: selective picking and strip picking, each with its distinct advantages and considerations.
Selective Picking
Selective picking, also known as hand-picking or cherry-picking, is the most labor-intensive but highest quality method of coffee harvesting. Skilled coffee pickers carefully select only the ripest coffee cherries from the coffee plants, leaving behind unripe and overripe cherries. This method ensures that only the best-quality beans are harvested, resulting in a superior cup of coffee with complex and well-developed Flavours.
The process of selective picking involves a meticulous inspection of each coffee plant, where experienced pickers visually assess the ripeness of the cherries and pluck them from the branches one by one. This hand-selection allows for multiple passes through the coffee plantation, ensuring that only fully ripe cherries are harvested at their peak sweetness.
Selective picking is commonly used for the cultivation of Arabica coffee, as Arabica plants produce fewer cherries and require more care and attention. While it is a time-consuming and labor-intensive process, selective picking leads to the production of specialty coffees highly prized in the coffee industry.
Strip Picking
Strip picking, also known as mechanical harvesting, is a more efficient but less selective method of coffee harvesting. This technique involves the use of mechanical harvesters that strip all the cherries from the coffee plants simultaneously, regardless of their ripeness. The machines vibrate the coffee plants, causing the cherries to fall onto a conveyor belt for collection.
Strip picking is most commonly used for harvesting Robusta coffee, as Robusta plants produce a higher yield of cherries and are more robust, making mechanical harvesting more feasible. However, because all cherries, regardless of ripeness, are collected at once, the resulting coffee tends to have a wider range of quality and Flavour. Strip-picked coffee is often used for commercial-grade or instant coffee production.
Steps in Extracting the Beans from Coffee Cherries
Once the coffee cherries are harvested, the process of extracting the coffee beans begins. This involves several crucial steps to remove the outer layers of the cherry and prepare the beans for drying and further processing.
Depulping: The first step is to remove the outer skin, known as the pulp, from the coffee cherries. This can be achieved using various methods, such as pulping machines or traditional fermentation. During pulping, the cherries are fed into a machine that removes the pulp, leaving behind the coffee beans surrounded by a sticky mucilage layer.
Fermentation: After depulping, some coffee processing methods involve fermentation. The coffee beans, still covered in mucilage, are placed in water tanks or fermentation tanks for a specific period. Fermentation helps to break down the remaining fruit pulp and mucilage, allowing the coffee beans to develop their distinct Flavours.
Washing: Following fermentation, the coffee beans are thoroughly washed to remove any remaining pulp and mucilage. This process helps ensure the cleanliness of the beans and prevents any undesirable fermentation Flavours from developing.
Drying: Once the coffee beans are washed, they need to be dried to reduce their moisture content. Traditional drying methods involve spreading the beans on large patios or raised beds under the sun. Modern coffee processing facilities may use mechanical dryers for more controlled and efficient drying. Proper drying is crucial to prevent mold growth and ensure the longevity of the beans.
Hulling: After the coffee beans are dried, the parchment skin, which covers the beans, needs to be removed. This process is called hulling and is typically achieved using machines that strip off the parchment layer, revealing the green coffee beans.
Grading and Sorting: Once hulled, the coffee beans are sorted and graded based on size, shape, and quality. This step is essential to separate the highest-quality beans from lower-grade ones. Specialty coffees, in particular, undergo rigorous grading and sorting to ensure only the best beans are selected.
Final Drying: The graded and sorted coffee beans undergo a final drying phase to achieve the desired moisture content suitable for storage and transportation. Properly dried beans are less susceptible to spoilage and maintain their quality during storage.
Coffee supply chain : the Coffee Auction
Coffee auctions play a significant role in the global coffee trade, facilitating the buying and selling of coffee beans between producers and buyers. These auctions serve as essential marketplaces where coffee producers showcase their harvest, and coffee buyers, including exporters, roasters, and traders, compete to secure the finest lots of coffee. In the complex coffee supply chain, intermediaries also play a crucial role in connecting producers with buyers and ensuring the smooth flow of coffee from farm to cup. Let’s explore both aspects in depth.
The Auction Process
- Coffee producers submit their coffee lots for auction, which are usually grouped based on origin, variety, and quality.
- Qualified cuppers or tasters evaluate each lot, scoring them based on various attributes like Flavour, aroma, acidity, and body.
- The auction takes place either in-person or online, where buyers bid on the lots they are interested in.
- The highest bidder secures the lot, and the coffee is then prepared for export or further processing.
Determining coffee prices
- Coffee auctions help in discovering fair market prices for different coffee varieties and qualities.
- Transparent auction processes ensure that producers receive a fair value for their coffee based on its quality, demand, and current market conditions.
- Auctions promote fair trade practices and better income opportunities for coffee farmers.
Coffee Supply chain: the Intermediaries
In the coffee supply chain, intermediaries serve as essential links that connect coffee producers with buyers and consumers. These intermediaries facilitate the movement of coffee from the farm to processing facilities, export points, and ultimately to roasters and consumers.
Coffee Exporters
- Coffee exporters are intermediaries who purchase coffee from farmers or cooperatives and handle the logistics of exporting the coffee to international markets.
- They play a vital role in ensuring that coffee meets the quality and regulatory standards of destination countries.
- Exporters may also offer financial and technical support to coffee producers, helping them improve the quality of their beans.
Coffee Importers
- Importers are intermediaries in coffee-importing countries who purchase coffee from exporting countries and supply it to domestic roasters and coffee companies.
- They handle customs clearance, logistics, and quality control to ensure the timely and efficient movement of coffee from origin to destination.
Coffee Cooperatives
- Coffee cooperatives are organizations formed by coffee farmers to collectively sell and market their coffee.
- Cooperatives provide farmers with access to resources, knowledge sharing, and improved bargaining power in the market.
Efficient Logistics in Preserving Coffee Quality
Efficient logistics play a paramount role in preserving the quality and freshness of coffee throughout its journey from coffee plantations in distant regions to the cups of consumers worldwide. The coffee supply chain is complex and involves multiple stages, each of which requires careful coordination and timely execution to ensure that the coffee beans retain their unique Flavours and aromas. Efficient logistics not only impact the final cup of coffee but also influence the livelihoods of coffee farmers and the economic viability of the entire coffee industry.
Logistics for Harvest
Efficient logistics begin at the coffee plantations during the harvest season. The harvested coffee cherries must be quickly transported to processing facilities to prevent deterioration and maintain their freshness. Any delay in transportation can lead to premature fermentation, mold growth, or other quality issues, negatively impacting the beans’ taste and market value. By ensuring timely transportation, coffee producers can safeguard the quality of their harvest and deliver the best possible beans to the market.
Effective Processing and Storage
Once the coffee beans are processed and dried, they require proper storage to maintain their freshness. Coffee processing facilities and warehouses must be equipped with appropriate climate control systems to regulate temperature and humidity levels. Excess moisture or exposure to extreme temperatures can cause the beans to deteriorate, resulting in Flavour degradation and the loss of essential aromatic compounds. Efficient logistics ensure that coffee beans are stored in optimal conditions, preserving their quality until they are ready for export.
Customized Packaging and Preservation
Efficient logistics involve employing appropriate packaging and preservation techniques to ensure coffee freshness during transportation. Vacuum-sealed bags, moisture barriers, and specialized containers help protect the beans from exposure to air, light, and moisture, which can lead to Flavour degradation and staleness. Customized packaging solutions help preserve the coffee’s unique characteristics and ensure that consumers experience the full range of Flavours and aromas.
Climate-Controlled Shipping and Storage
Efficient logistics include the use of climate-controlled shipping containers and storage facilities. These specialized environments maintain a consistent temperature and humidity level, reducing the risk of mold growth and other quality issues. Climate-controlled conditions are particularly crucial when shipping coffee to different climates and regions, where varying environmental conditions can impact the beans’ integrity.
Starbucks
Starbucks, founded in 1971 in Seattle, Washington, initially operated as a single coffee shop, but it rapidly expanded its presence and transformed into a global coffee powerhouse. One of the key factors contributing to Starbucks’ success and revolutionizing the coffee market was its efficient and innovative distribution and transportation strategies.
Vertical Integration:
Starbucks took a unique approach by vertically integrating its supply chain. Instead of relying solely on external suppliers, the company acquired and operated its coffee roasting facilities and distribution centers. This vertical integration allowed Starbucks to have more control over the coffee bean sourcing, roasting, and distribution processes, ensuring a consistent and high-quality supply of coffee beans to its stores worldwide.
Streamlined Logistics:
Starbucks invested in advanced logistics and distribution technologies, enabling the smooth flow of coffee beans from coffee-growing regions to its roasting facilities and ultimately to its thousands of stores. The company established strategic partnerships with shipping and logistics companies to optimize transportation routes and reduce transit times, ensuring that freshly roasted coffee beans reached its stores promptly.
Ethical Sourcing and Direct Trade:
Starbucks emphasized ethical sourcing and direct trade practices, building strong relationships with coffee farmers and cooperatives around the world. The company introduced its “C.A.F.E. Practices” (Coffee and Farmer Equity) program, which set rigorous standards for environmental, social, and economic sustainability in coffee production. By engaging in direct trade, Starbucks established long-term partnerships with coffee farmers, paying premium prices for high-quality beans, and supporting sustainable farming practices.
Roastery Concept and Reserve Stores:
Starbucks introduced the “Starbucks Reserve Roastery” concept, which revolutionized the coffee experience by showcasing the art of coffee roasting and brewing. These roasteries became immersive coffee destinations, featuring on-site roasting, unique brewing methods, and exclusive coffee offerings. The beans roasted in these flagship locations were distributed to other Starbucks stores, maintaining a connection between the coffee origin and the customer experience.
Mobile Ordering and Delivery:
In recent years, Starbucks further revolutionized its distribution by embracing technology. The company introduced mobile ordering and payment options, enabling customers to order and pay for their drinks through the Starbucks mobile app. Additionally, Starbucks launched delivery services, partnering with third-party delivery companies, allowing customers to enjoy their favorite coffee beverages without leaving their homes or offices
Introducing.....
The global supply chain of products is an immense and complex system. It involves the movement of goods from the point of origin to the point of consumption, with intermediate steps that involve resources, materials and services to transport them. A supply chain encompasses activities such as purchasing, production, distribution and marketing in order to satisfy customer demands. Companies rely on a well-managed supply chain to meet their business goals by providing quality products and services at competitive prices.
Efficiently managing a global supply chain requires considerable effort, particularly when dealing with multiple suppliers located around the world. Complex logistics tracking systems are needed to monitor product movements from one place to another. Technologies such as artificial intelligence (AI) can help companies keep track of shipments across different locations for greater visibility into their processes.
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