Demystifying the value chain

Tim Tim makes a direct comeback

When Dutch traders introduced the Typica cultivar to Indonesia in the 17th century, coffee production underwent a rapid expansion. This was aided by a particularly favourable microclimate near the equator and mountainous regions across its many islands. But in the late 1880s, disaster struck when coffee leaf rust swept through large swathes of the country; virtually wiping out the varietal with the exception of the higher slopes of Sumatra. In response, the hardier Robusta coffee plant species was cultivated in much of the low-lying regions and the species flourished to account for nearly three-quarters of the Indonesia’s total coffee total coffee production today.

image

However, standing tall amongst the twenty or so varieties that have been introduced over the centuries and are still grown commercially in the country, there is one varietal that can be described as uniquely tied to Indonesia’s rich coffee heritage. Discovered on the island of Timor in the 1940s, Hibrido de Timor – or more affectionately known as TimTim – is a natural interspecies cross between c.arabica and c.canephora (Robusta).

image

Known for its resilience to coffee leaf rust and characteristic bold cup profile that makes an excellent complement to high acidity coffees, TimTim has become a preferred ‘parent’ plant for many other hybrids. It’s genetic resistance to disease is widely acclaimed by scientists, botanists and producers who regard it as a hardy and a high yielding crop.

Geologist and Founder of Pinesia coffee estate, Gary Sjafwan, began cultivating Hibrido de Timor himself when he was researching the geological features of Java nine-years ago: “I love nature”, he says. “I like to experience the forest, go hiking, and see how growing coffee is also making a better life for the earth. I started planting coffee in Java and Sumatra and was interested in not just the coffee itself; but how the culture in every region is different, just as the character of the people and the way farmers grow it is also different”.

image

The estate now comprises of more that 800 smallholder farmers across Sumatra, Aceh and West Java who have joined forces to achieve greater economies of scale as they seek to access specialty coffee markets worldwide under the umbrella of Pinesia Family Estates.

As demand for Hybrido de Timor outside Indonesia increases, their production of 700 tons in Sumatra is now dedicated to the sole cultivation of TimTim for both commercial and specialty customers. Although the bulk of their shade grown coffee is washed, fermented for ten hours and double soaked, they also have the facility to offer natural process sun-dried coffee in small quantities.

This stable supply of coffee cherry has provided a bedrock for the estate to branch out into further research and development into other varietals such as the Dutch-introduced ancestral Typica, Maragogype, including the addition of a nursery dedicated to the production of Geisha. Gary says that their research facility on the 100-hectare farm in Flores is a planned effort to meet demand in the specialty coffee segment across Indonesia and further afield.

“The specialty market in Indonesia is increasing but our main target is to sell coffee outside of the country. For commercial markets, we want to keep our our quality stable as we expand the farm into specialty areas,” Gary adds.

A chance meeting with algrano at World of Coffee in Budapest earlier this year has already born fruit and a promising partnership now means that the Estate’s Typica and TimTim, amongst other varietals, is now directly available to specialty coffee roasters in Europe. It is also the first offering of coffee from Indonesia on the transparent trade platform.

image

This new offering – a quality product of hundreds of smallholder growers represented by Pinesia Family Estate – is yet another opportunity for producers to command a fair price for their coffee that is helping to support their families and communities: “We are not just growing the coffee itself, we are growing the community in the coffee farms – it is the farmer and his family that is our biggest asset”, insists Gary before confidently adding: “Indonesia is a big country and we have a lot of different flavours depending on the character of each region. There is no good or bad coffee, mistakes only happen in the process after harvest. That is why we are taking steps to be consistent in our processing to bring out the unique character of our coffee in every cup”.

This article was commissioned by algrano for the blog series Demystifying the Coffee Value Chain

Standard
Demystifying the value chain

Digital dialogue in transparent trade gathers steam

To catch a glimpse into the coffee value chain of the future, let’s take a quick look at some of the pioneering developments that are dramatically reshaping the landscape today. In a digital age of big data, powerful algorithms, just-in-time logistics and more interconnected communities globally than ever before, a revolution in coffee is taking place – and it is gathering a powerful head of steam.

image

In a climate of consolidation where eight major trading houses now control more than half (60%) of the world’s coffee bought and sold on the global market, there has been a tectonic shift in the supply chain that now seems unstoppable. Driven by the power of digital technologies fuelled by increased consumer demand, a new era of transparency and traceability is changing the conversation about coffee.

In the eighties, there were lots of agencies in the supply chain so roasters had very little idea of coffee production at origin. The traders offered coffee on a delivery basis to the factories from the warehouse, not necessarily from the farm gate. The internet changed all that and opened the door to establish direct contacts at origin built on trust; and above all, coffee is about trust.

Behind the macro-trend of consolidation in bulk markets, specialty coffee has been confidently moving in the direction of craft beer. A new generation of customers want to know the story behind the single origins and they demand greater sustainability which means fair prices at the farmer level. They want to participate at a deeper level and have confidence that their coffee is traceable and traded transparently.

image

No one can dispute that digitization is laying new tracks in the way physical coffee is being traded; particularly in specialty markets where price is largely disconnected from the world market and provenance is highly prized.

This shift that we are seeing in the supply chain will change the role of traders. As growing transparency in price and pressure on margins increases, traders will become more like data analysts as roaster’s search for the most cost efficient and transparent system to buy and market their product. Service providers such as algrano with digital platforms that connect the buyer and seller directly are challenging the way coffee has been traditionally traded.

And as the third wave in speciality coffee roasteries and independent coffee shops continues to gather pace, the mainstream market is now paying more attention to the journey from the crop to cup. Through its award-winning platform, algrano is responding to this need by helping to bridge the gap between growers and roasters. The platform also helps to overcome the enormous logistical challenges and risks of moving large volumes from one continent to another.

Whether it is a micro-lot or a full container’s worth of green coffee, growers want access to an open digital market space where they can sell their coffee online to the world. They want to tell their story and show their varieties or processing methods to potential buyers. This awareness is empowering greater knowledge sharing as producers can now compare directly with their neighbours – or even other countries. Technology is underpinning these new capabilities as people at both ends of the value chain have the tools to access more information and become more informed.

The head of steam in the engine room of the coffee trade is building, and story is moving. It’s about access to quality, transparency and traceability for roasters and new markets for producers. For a fairer and more sustainable value chain, this is definitely the direction that coffee needs to go. Since algrano was launched at World of Coffee in Gothenburg in 2015 – when we scooped an award for tech innovation – the online community has now grown to represent more than 400 growers and cooperatives from across ten coffee producing countries in central, south America. Over 500 roasters have joined to source coffee that is directly delivered to their door.

Next stop is East Africa and Asia as producers from Ethiopia and Indonesia plan to get on board later this year.

This article was commissioned by algrano for the blog series Demystifying the Coffee Value Chain

Standard