The industry needs to remember that relationship coffee is a business

contract in a coffee warehouse
  • Relationship coffee has become almost synonymous with the specialty coffee segment, as an embodiment of the ethical and collaborative values it aspires to 
  • But with no formal definition, it can be romanticised and positions the partnership somewhere between friendship and business, and research shows that it requires more skills and effort for producers in return for little more than the promise of business 
  • A fine balance of drawing boundaries, acknowledging power structures at play, and investing a degree of flexibility in the partnership will be crucial to mutual growth

THE SPECIALTY coffee industry has always celebrated the virtues of collaboration and mutual respect – regardless of whether it has been practising what it preaches. Relationship coffee has become almost synonymous with the specialty coffee segment, as an embodiment of those values. 

However, as coffee producers and buyers seek meaningful connection with each other, they mustn’t lose sight of a fundamental truth: relationship coffee is still, at its core, a business transaction.

The term “relationship coffee” generally refers to long-term working relationships between roasters and producers that encourage long-term buying, commitment to a higher price for coffee, and the mitigation of risks associated with the volatility of the C market. 

“In my experience, relationship coffee just makes sense,” says Martin Mayorga, Founder and CEO of Mayorga Organics. “Any sound business should understand their suppliers’ needs and reality, and ideally form a collaborative relationship centred around equality and mutual success.”

Knowledge sharing is another bonus of relationship coffee. Producers rarely know where their coffee goes after the sale, with little to no knowledge on the FOB price, how it was received, and who ended up buying it. 

“These are questions that producers always ask us,” says Brendan Adams, Founder of Semilla Coffee. “I think that with relationship coffee, it’s the bare minimum that we can achieve, and it makes the whole process a lot more fulfilling for them.”

Anny Ruth, who runs the Loma La Gloria coffee farm and mill in El Salvador, reports that client reviews are never about the coffee beans. “They all talk about our relationship, the quality consistency, and that they look forward to continue working together in the long term.”

But similar to direct trade, there is no formal definition of “relationship coffee”, which leaves space for misunderstanding. The term “relationship” is also a double-edged sword that can be misleading, positioning the partnership in an uncertain realm, somewhere between friendship and business. 

This can also blur the line between business accountability and expectations of unconditional loyalty and flexibility.

Romanticising the relationship blurs the line between business and expectation   

Much like the office worker expected to go above and beyond with excessive working hours and personal sacrifices in return for basic pay – and perhaps a pizza party, coffee producers often find themselves labouring under the weight of unrealistic expectations. 

In return for experimenting with fancy processing methods and specialty coffees,they often receive very little beyond the basic reward of securing a buyer’s business. 

Research shows that relationship coffee models usually require more skills and effort in high-quality coffee production and coordination, and have created some dependencies. It underscores that farmers still rely on roasters for their benefits.

“It all comes down to how  much you have to lose,” says Anny Ruth. “And the problem is  that usually  producers just feel sort of desperate and bend over backwards to get the buyer’s business and keep it.”

“Early on, I had many buyers asking me why I wasn’t offering SL 28 or Geishas, or other varietals. But what if we experiment and fail – who is going to pay for that risk? Not the buyer, on top of which we risk losing business. Setting boundaries is really important for a sustainable relationship.”

At the heart of this imbalance lies the assumption that the buyer’s business is enough. Buyers, misled by the informal nature of relationship coffee, may unwittingly perpetuate a power dynamic that is exploitative and tilts heavily in their favour. 

This lopsided arrangement can have profound implications for both sides of the equation. For producers, the quest for perfection in pursuit of a buyer’s approval can lead to burnout, financial strain, and a sense of disillusionment. Without clear boundaries and safeguards in place, asserting their worth or demanding fair compensation for their labour is a challenge.

Conversely, buyers who fail to recognise the inherent value of their producer partners risk undermining the very foundation of the relationship coffee movement – trust, respect, and shared prosperity.

“I find most ‘direct trade’ relationships to be anything but direct (with a trader in the middle), or to be a tool for the tokenisation of coffee farmers while taking advantage of them,” says Martin.  “I feel a sense of obligation towards the producer communities I work with – to represent their voice in the market. There can be value in a ‘family-like’ dynamic that fosters loyalty and commitment.”

A business partnership requires balancing boundaries and give-and-take 

While fostering relationships is important, it’s important to remember that green coffee trade is a business, and that each party’s fiduciary responsibilities are first to their own communities. This requires both understanding and boundaries.

“The boundaries and expectations are clear via our contracts,” says Martin. “This is just necessary for us to each continue to grow and evolve in an incredibly crowded and competitive environment.”

While the expectation of unconditional loyalty is never good news for business, a give and take dynamic that benefits both business parties in the long run can be an investment in mutual, long-term growth.

For example, when the C price was low, producers wanted fixed pricing. When it went up, they were suddenly willing to take more risk and asked for differential pricing. However, with squeezed coffee margins, roasters’ ability to pay fair prices and farmer premiums has become less and less viable. 

“In this scenario, everybody sort of recedes into their own camps and says ‘this is what I need to do to protect myself,’ ” says Brendan. “When pricing dynamics affect a relationship in such a way that parties don’t feel satisfied, I think it’s the first sign that it’s not a truly authentic relationship – which would have the open communication to say ‘how do we solve this together?’ ”

Rather than passing on higher prices to customers, the solution for many has been to jump ship and go in search of cheaper alternatives – a response in direct contradiction with the very concept of relationship coffee.

“Roasters and retailers need to recognise that we (they) are in a position of privilege simply by being close to the market – we all need to give a little in order to make a change at the scale that is necessary,” says Martin.  

To work, relationship coffee has to be a model that extends beyond price and changing circumstances. It starts with acknowledging the relationship’s inherent power imbalance and working diligently to level the playing field, understanding that producers’ and buyers’ successes and failures become closely intertwined. 

Achieving the fine balance of drawing constructive boundaries and knowing when being flexible makes sense for the partnership could be the business relationship model that the specialty coffee sector needs to scale up sustainably, with mutual benefits.

Coffee Intelligence

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