As we all know, Ethiopia's specialty coffee sector offers a mosaic of flavours, stemming from a rich Ethiopian coffee heritage and diverse growing regions. As coffee buyers vie for the prized beans, understanding the nuanced approach to coffee contracting—specifically early contracting—is paramount. Below, we discuss the benefits and importance of early contracting in Ethiopian coffee, which is especially crucial when dealing with fluctuations of political instability, climate concerns, and other economic factors that may affect the specialty coffee market.
Benefits of Early Contracting
Financial Leverage for Suppliers
Advanced contracts (not to be confused with futures contracts) are more than just an agreement; they're financial instruments for specialty coffee suppliers. They enable suppliers to secure favourable bank loans and, in turn, empower us to source premium Ethiopian coffee more efficiently. By showcasing commitment through early contracts, suppliers are granted better loan terms, making it feasible to procure and produce more coffee.
Guaranteeing Quality
Early contracts provide coffee buyers with a security blanket. We get to cherry-pick from the latest arrivals from our extensive network of producers, suppliers, and shippers. This ensures we're procuring the highest-quality Ethiopian coffee every time. Early contracts can also safeguard against potential moisture issues, which occasionally arise due to post-harvest weather patterns.
Priority Access and Streamlined Allocation
Early contracting is a declaration of trust in our specialty coffee suppliers. This established faith translates into benefits: from privileged access to premium coffee samples to a fast-tracked allocation process when the coffee reaches Addis Ababa warehouses.
Furthermore, with an early contract, we're often granted exclusive entry to suppliers' warehouses, enabling us to handpick the finest Ethiopian coffee lots upon arrival and promptly identify stock lot samples. This holistic approach provides insights into a washing station's quality and positions us to ship premium coffees efficiently. In essence, an early contract in the Ethiopian coffee industry is a VIP pass, ensuring preferential treatment and reflecting the trust in our business relationships.
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Essential for the Supply Chain
Early contracts aren't merely a purchase order; they're pivotal for the Ethiopian coffee supply chain. Both exporters and Ethiopian banks rely on these contracts as collateral for loans. This financial backing facilitates exporters to quickly secure the best red cherries at the onset of harvest.
Maximising Quality: The initial harvest period yields some of the best cherries. Securing them promptly ensures premium coffee.
Competitive Edge: Quick procurement ensures exporters are not left with leftover coffee of lower quality.
Consistency in Supply: By procuring quality cherries early, exporters can maintain a consistent supply of specialty Ethiopian coffee throughout the season.
Predictability & Planning: Early procurement allows exporters to better predict stock, plan logistics, processing, and coffee shipments efficient.
Ensuring Prompt Shipment: Washed coffees are processed first, and early contracts ensure buyers are at the forefront of the queue, saving weeks in shipping time and costs.
Because of this, it is often better to contract a mixed container with one type of process. For example, contract a full container of washed coffees (with different lots of your choosing) for shipment in February, and if a full container isn’t needed, additional bags of natural coffees can be consolidated with other roasters or shipped in a smaller container later.
Ensuring Prompt Shipment
Washed coffees are processed first (by regulation), leading them to be the initial ones shipped. An early contract ensures buyers are at the forefront of this queue, potentially saving weeks in shipping time and associated costs.
Because of this, it is much better to contract a mixed container with one type of process. For example, you can contract a full container of washed coffees (with the different lots of your choosing) for shipment in February and (if you don’t want a full container) additional bags of natural coffees to either be consolidated with other roasters in your area or to be sent in a short container later (at a slightly increased cost).
Demonstrating Commitment & Trust
Contracts aren't just about beans; they're about relationships with coffee suppliers. They signify commitment to what is often a complex process. When a buyer knows the exact profile, grade, quantity, and region they desire, allocation is streamlined. Buyers can approve pre-shipment samples quickly and receive their specialty Ethiopian coffee without delay.
Early contracting in Ethiopia's coffee industry is more than a strategic decision; it’s an investment in quality, trust, and mutual growth. By understanding the manifold benefits, coffee buyers can ensure a steady flow of premium Ethiopian coffee from the farms to the cups of specialty coffee consumers worldwide. Commit early, roast, and sip the best!
