We have been working in Northern Peru for several years, buying specialty coffee from cooperatives and associations with whom we have built lasting relationships. This is the conventional way of sourcing in Peru and gives farmers associated with these groups a market for their coffees, and some stability during times of local or C-Market fluctuation. Whilst a lot of the arrival quality we have seen in previous seasons has been good, we have struggled to impact upon that quality or make improvements in the supply chain as we would like. More importantly, the premiums we had been paying for quality rarely makes it directly back to producers, something we have had very little control over in previous years. In Peru, like some other origins, coffee farmers are sensitive to market changes and often lack basic training and the incentive to produce higher qualities of coffee, as premiums often don’t materialise. For these reasons we decided we needed to change the way we buy coffee in Peru and work directly with producers, allowing us to control and improve upon existing quality and have full financial traceability. Ensuring these two factors would help us to pay higher prices for the coffees and to make sure that producers received a fair price for the coffee they delivered us, above the market price. In order to do this, we set up a warehouse in Jaen and started to buy in parchment directly from producers.
The Cajamarca region holds a lot of potential for quality coffee, with ideal growing conditions and great varieties, but quality is often lost in picking, processing and drying, with producers lacking infrastructure and knowledge. The most vulnerable producers are those that are unassociated – those who aren’t members of a cooperative, association or organisation – and they represent 75% of producers in Northern Peru. These producers don’t have access to training sessions or premiums for quality or certifications, and their income is totally dependent on the market price. Often, local aggregators – a buyer who lives in the same area – will come to the farm or house of a producer and buy their coffee for cash before selling it on; in some cases directly to an exporter or more often to other traders and middlemen. This results in the producer being paid very little for their coffee and a lot of quality coffee is lost.
Our field team – led by our Head of Specialty Sourcing, Simon Brown – identified producers and producer groups across Jaen and San Ignacio, who brought their parchment to our warehouse in Jaen, where it was weighed and a sample taken from each bag. The green sample was then analysed and yield calculated, before it was sample roasted, cupped and graded. The price was determined by the cupping results and producers were paid in full on the same day, with premiums well above the market price – in most cases double.
This shift in approach to sourcing will allow us to forge long term relationships directly with farmers, improve the coffee quality we can offer from these areas and increase producer household income through access to quality premiums.We now have over 300 registered farmers, who will all be trained on farm management and picking, processing and drying by our agronomist, Auber Terrones Rojas.