Transparency in the Coffee supply chains

– PROTECT THE ORIGIN –

In today’s culture of ethically conscious consumption, supply chain transparency is quickly becoming the norm. So how can businesses reap the benefits of supply chain transparency? Especially for the coffee industry.

Transparency is quickly becoming the norm in today’s culture of ethically conscious consumption. Whereas ten years ago, companies that understood the benefits of supply chain transparency could have had a competitive advantage.

“Consumer concerns about ethics and transparency are indisputable: provenance is already a big issue – and growing.” – Harvard Business Review (2010). The above quote from more than a decade ago shows that supply chain transparency is neither trendy nor a new phenomenon.

So how can businesses reap the benefits of supply chain transparency? Especially for the coffee industry

Before answering that question, let us see what transparency in the coffee supply chains is and how it differs from supply chain visibility. Then, we will explore four critical benefits of supply chain transparency and how we can achieve it.

What is supply chain transparency?

In essence, a business knows and understands what happens at every stage of the supply chain and communicates factually and objectively about its supply operations internally and to the public copper. That shows the transparency of the enterprise’s supply chain.

During a period of historic low coffee price volatility, many industry leaders have become more aware of the importance of transparency in the coffee supply chains, the ultimate goal of which is to ensure sustainable prices are spent pay for coffee production and supply activities.

Supply chain transparency benchmarks

Coffee prices are maintained at a much lower level than production costs in many countries. It places excellent financial strain on coffee growers and their families. At this price point, along with factors such as climate change, reduced productivity and increased production costs, a lack of education and resources seriously affects the specialty coffee industry.

With the active development of the specialty coffee industry, new economic opportunities have been created for some producers as more and more consumers begin to desire traceability and quality assessment more thoroughly. Areas of interest covered in the reports include:

– Product quality and safety standards

– Sourcing of raw coffee materials

– Labor resources (picking, preliminary processing, drying, roasting, mixing, …)

– Responsibility for environmental protection and sustainability

Transparency in the coffee supply chains is the best and most enduring way to build trust between suppliers, companies and customers because a transparent supply chain represents an honest business and is upfront about how it operates.

Solution for supply chain transparency: Direct Trade 

It is buying and selling goods and services without intermediaries or factors. Direct commerce represents more than just the dictionary definition of the term. It is used to pursue quality, sustainability and fairer prices for manufacturers.

Direct trade creates stronger ties with the industry community. Buyers will have the opportunity to work directly with the producer, purchase their favorite coffee lines, and ultimately create a personal relationship over the years. Promote more new experiments (on preliminary processing and development of varieties), and improve the quality of coffee beans. Trust that there will be coffee buyers and give producers the security to invest in improved infrastructure and processes. It is a deeper look at current market trends, pointing out the most lucrative areas to focus on.

From the producer’s point of view, specific benefits for both sides will include transparency, value sharing and traceability. A stronger relationship helps buyers and manufacturers communicate better, solve problems, propose quality improvements, and better understand production and export costs. Since then, the price of coffee has increased; the value of labor and the quality of life for people living in the production area has improved.

With both parties able to mentally invest in the product, they are more inclined to invest their time, effort and expertise to produce better coffee and create favorable economic conditions and better socioeconomic.

The benefits of transparency in the supply chain

Getting public information about supply chain operations can seem daunting. Because most businesses have traditionally been wary of disclosing too much about their sourcing, worrying that it will raise the risk of business competition. They will also spend more time and resources on gathering relevant data and ensuring it is accurate and consolidated into a shareable format.

However, everything that will offset their concerns and make their efforts worthwhile will be detailed below.

Securing a source of customers

Today’s consumers firmly believe they deserve to know exactly where the coffee they use daily comes from and how to produce it. Before a product is ready to spend money on a drink, they want to ensure that it is a safe and quality product that matches their value.

Disclose information about manufacturing practices, safety standards, and supply chain ethics. The business will allow consumers to choose to use the coffee product instead of a place that does not provide specific country of origin information.

Brand loyalty

Customer retention is considered the gold standard for profitability in business. We foster consumer trust when we share transparent information about the supply chain. Thereby it was bringing consumer loyalty to our brand. It is also an active way of word-of-mouth promotion.

Stronger Partnership

An environment of trust and transparency will help us communicate openly with our suppliers, build long-term partnerships, and drive continuous improvement. When producers feel recognized for their honesty and transparency, they are more willing to solve problems and improve coffee quality. Instead, they will try to reduce production costs by substandard work, even unethical behavior in supply.

Competitive advantage and industry-wide innovation

The benefits of supply chain transparency can be far-reaching and are not limited to small businesses and the coffee industry. With evidence of quality and integrity in action, businesses gain a practical competitive advantage.

Although the movement is nascent, transparency in coffee purchases has become deeply tied to marketing, where one-way actual price data can be used to create symbolic value or make it invisible to sure buyers.

Suppose the acquisition of this value through symbolic means – in other words, marketing – is passed back to the producer in a truly equal way. In that case, the producer’s income will increase with the value of roasted coffee.

What is the future of coffee production? 43 Factory Coffee Roaster believes that by educating people about coffee production problems and possible solutions, we can inspire our guests towards the correct values. It will be a long cognitive process, but we believe that by taking small steps, we can pave the way for a more sustainable future for coffee.