case study: coffee
Coffee stored in warehouse
FNC purchases the coffee from the cooperative and is then responsible for exporting the beans. The coffee moves by truck from the cooperative to a warehouse close to port and owned by FNC. When it is ready to be exported, FNC moves the coffee from its warehouse to port.
Whereas other origins may load coffee into containers at their warehouse then move it to port, all coffee exported from Colombia must be loaded into shipping containers at port due to the narcotics trade. Once in the container, the coffee is loaded onto a ship and the ship leaves for its destination port. It takes approximately 20 days for the ship to get from Colombia to Montreal. Once the ship arrives, the containers are offloaded and the coffee is moved into one of RGC’ s warehouses. In most cases, the coffee will be stored until it is tendered to one of RGC’ s clients. In some cases, the coffee may go directly from port to a roasting facility, bypassing RGC’ s warehouse because it has been previously tendered to that client.
In total, the supply chain of Colombian coffee, from farmer to RGC warehouse, is between 2.5 to three month’ s time.
THE ISSUE OF INCLEMENT WEATHER
Coffee production is heavily dependent on ideal weather and growing conditions. But given that Colombia is located within a region of the world that is prone to bad weather, it is understandable that the supply chain may encounter issues due to weather-damaged coffee crops. The weather phenomena of El Niño( dry conditions with no rain and lots of sun) and El Niña( wet conditions with too much rain and not enough sun) are common challenges for Colombian coffee growers at the farm level. At the time this article was being written, Hurricane Matthew was becoming a huge issue for the rest of the coffee supply chain, as it was carving a path directly in line with the export shipments coming from Colombia. Hurricane Matthew’ s
Café Granja La Esperanza, Caicedonia Farm, Caicedonia, Valle de Cauca, Colombia
THE QUESTION OF ETHICAL COFFEE
Ethically sourced coffee is a buzz-worthy term. But what does it actually mean?
According to Jeff Bernstein, it’ s very subjective.
“ That term is defined different ways for different people. At RGC, we deal with reputable exporters in our origin countries and we’ re not supporting or engaging in practices that we believe are unethical, such as forced labour or child labour.”
While it’ s impossible to verify every single farmer, origins do their part for the fight against unethical coffee sourcing by creating lists of farmers or exporters who are known to engage in unethical practices. As well, RGC regularly visits their origin countries.
“ We do a lot of social work and projects with the people and families there,” said Bernstein.“ We contribute added premiums to the coffee to help the local communities.”
Each individual section of the supply chain must do their part to make sure what they’ re sourcing is ethical, as it is a team effort.
“ We rely on each other to uphold our own standards but also each other’ s standard of ethics,” said Bernstein.“ It is in all of our best interests to source coffee that is ethically produced.”
Bernstein says that finding a new supplier isn’ t as quick and easy as one might think. Relationships play a huge part in the business of coffee.
“ Coffee is an old value, old family system. It’ s not like you just run and find a new supplier and replace your old one. You’ ve built a long-standing relationship with your grower that you hope will last many, many years. So it’ s about that relationship, and about trust.”
SUPPLY CHAIN CANADA • QUARTER 4 2016 • 17