As we gear up for our first Brazil shipments expected to arrive next month, we had a chat with Joanne Berry, Head of Procurement & Sourcing at Tropiq. Joanne has played a fundamental role in our sourcing strategy in Brazil, present since the very beginning. She has been travelling to origin consistently, and has a close relationship with the suppliers and producers we work with.
Dive into our in-depth conversation for some perspective on her buying process, relationship building, and overall approach.
How do you think the younger generation of coffee farmers in Brazil is responding to the evolution of Brazilian flavour profiles?
In Brazil, as in many countries, even though there are large producers who export directly, 80% of the crop is produced by smallholders all over the country. In many cases, they are in areas where they can travel to cities and share knowledge locally with other producers or buyers in the market. Often these coffees get snapped up by cooperatives or agents in the region and the producer will never know where they end up.
Good partners will feed the producers with knowledge and information about their coffees: cupping scores, flavour notes, what category of coffee their lot is falling into (blend or microlot), who is buying their coffee, etc.
A difference I see with younger producers is that they have much better access to the exporting market than previous generations. On a general level, they can see where their hard work goes. They are connected to how the product is presented, and social media plays a crucial role in this.
A simple thing like Instagram has really changed the game. You can follow all the different roasters and coffee shops and see exactly how they are showcasing your product. If you don’t have access to this, you have limited understanding of the end buyer.
When you have young producers who can see what’s happening at the very high end of the coffee market, they can get an understanding of what coffee can be. This doesn’t necessarily mean that they actually produce coffee at this level, but they are exposed to the potential and can then start to think about how they are operating. It gives them a passageway to engage more with a specific market. That lens is valuable.
Continuous feedback can help you improve, and introduce new aspects of the market to you. It makes the business more engaging for people, and prevents producers from operating in a ‘closed-off’ market. However, it doesn’t take away from the challenges – like production costs, or actually finding a market for your coffees.
When we work with producers, is sharing information something we integrate into our buying process?
Yes, of course. We have always done so in every country we work in, but what’s also been very important for us is to have roasters travel with us to origin and experience the buying process. They can see and meet the producers, understand the infrastructure of the country that they’re buying from, but also, it allows us to develop our relationships further.
I think of us as a facilitator in the supply chain with certain skills – like cupping and understanding quality in-depth. Bringing the clients along can connect them to suppliers, and visa versa. Suppliers and producers can understand firsthand that there’s a reason behind my suggestions, instructions, or requests.
They can actually meet the person who’s paying for and roasting their coffees, and understand exactly what it is they need. I think that’s very important and it adds value to both sides of our business.
Strangely enough, Brazil is one of the places we haven’t had a lot of clients travel to over the years, in contrast to Ethiopia for example.
One of the things I’ve also started doing is frequent presentations to our suppliers and producers. I share images and social media sites that showcase their product, so they can see how it is represented in the market. I also show them where we export their coffee geographically, as well as what proportion of the volume they’ve sold to us goes to different countries. This way, they can have some real data on their coffees and what’s happening with them.
One of our priorities is relationship building at origin, and I know that you place a lot of focus on this from season to season. What are your thoughts on this?
I think this is such an interesting topic from a broader perspective – not just in Brazil. Every business relationship is really important of course, but also relationships in business are not always equal. I think sometimes in the coffee industry, as buyers, we think that we have these beautiful relationships with producers, which we do, but we forget that we come as a buyer of their product. That’s something I think we have to be a little more realistic about. It’s not that the relationships are not real, relevant, and important. They add value to our jobs, but it’s necessary to note that they are also transactional.
One of the most important things for me in my relationships as a buyer is sharing information. Sharing information that is going to empower them and not just information that supports or suits my needs. Actual honest information about how we experience the market and what our clients are looking for.
There’s a difference between sharing my opinion versus the resources I have at hand. I am exposed to so much data daily that I think it’s crucial to distribute it.
Another thing I absorb from my relationships in the supply chain is learning. I’m learning things about processing, farming costs, fertiliser pricing, the internal market, and the reality of how small producers work.
An example: even when you pay a higher price for a coffee, all of a sudden, maybe a producer will start to bring you coffee from their neighbours because they’re motivated to take more. Those are just parts of the supply chain that you have to dig into when you want to do good things.
What is the impact of what you want to do, and how do you have to manage it to actually do a good thing for both your business and the producer you’re trying to work with?
Both sides of a relationship are business, but I think we need to be adding value to each other at every step. As buyers, we need to be aware of the transactional nature of a relationship and then also leave room for things like the personal side.
Joanne at the facilities of producer Rodrigo de Melo
Are you interested in getting to know a person outside of the business part of it? Do you spend the time doing that? Because one thing is to say, we have all these great relationships because we buy coffee from them, but it’s another thing to actually spend time with your partners in a personal context, outside of work.
How has our collaboration with producers evolved over the years? What are some key differences you have witnessed?
I really like people, so it’s very easy for me to work with different faces and to get to know them better.
Over time, the main thing that has really cemented my relationships in Brazil is the time that I’ve spent with individual producers over the years. Going there and buying coffee, sitting in people’s homes having conversations, sharing information about the industry, but then also about our lives. That time spent together is so important. You can’t always dedicate the same amount of time to every producer – and each relationship is different – but by sharing information, you build trust.
Recently, I’ve been allocating more time to video calls with producers on a regular basis. I’ve seen a dramatic difference on how we start to relate to each other. On a video call, it’s much easier to understand people and read them.
I also love it when producers or suppliers come to visit our offices in Oslo. I can take them to different roasteries and clients. They get to really experience what I’m trying to communicate to them the whole time and really see the value they have for us as producers. We don’t exist without the product that they create.
Another thing I’d like to note is the weight of having partners at origin with the same vision as us. One of the most important factors of how we relate to producers in Brazil is our partner Natalia Brito, from Jaguara Coffee. We are so aligned in what we are trying to achieve. She is really good at communicating my intentions, our company’s meaning, and the way that we work. This type of relationship is so valuable. She’s like an arm of us that does the action and doesn’t just speak the words. She makes things happen.
It’s taken a while for us to highlight that Brazil can be an origin of unexpected, funky, fruit driven, sweet profiles. How do you think our audience’s perception of this origin has progressed?
A lot of people are surprised. I think when people taste these coffees, they get an immediate understanding of what we’re trying to achieve. The biggest difference now from when we started sourcing coffee from Brazil was the price points on our offer list. In the beginning, people couldn’t quite grasp why Brazilian coffees would be at those prices. It was necessary though, because you can’t produce such coffees without dramatically increasing your production costs. So the main challenge was to convince people that they were worth their price. As soon as they cupped them though, people didn’t actually need that much convincing.
This is thanks to the producers and their consistency, as well as the clientele we have that value such products.
You were recently in Brazil (in August) visiting suppliers and making some selections for the season. Any highlights worth mentioning?
Sunny weather is a highlight! All jokes aside, it’s always so good to see our partners again.
I come from a culture where it’s okay to be direct. I am a straightforward person. If I am curious about something, or need to communicate a message, I will very happily do so. However, not all cultures are like that. In fact, I think it’s quite the opposite. In many cultures, you don’t communicate like that. People need space, and you need to transmit messages in soft and subtle ways.
It’s very easy to take this for granted in the buying world. We sometimes forget to create space to really hear people, and when you’re meeting someone face to face – it’s much easier to be reminded that you need to create this space. There are so many things you’re not going to hear if you don’t make the effort to do so.
So, I guess a highlight would be getting the chance to communicate with people in person.
Another highlight was visiting an organisation in Brazil that works with children. I went there with our partners, Jaguara Coffee, who donate a small portion of their sales to them. It’s called ‘Seeds of the Future’. They work with children who come from underprivileged communities, with a lack of guidance and limited access to education and certain resources.
The organisation focuses on providing activities for these children to do during the day, like arts and crafts or language courses. They also have health services integrated in the program. It’s a safe place for kids to be, so that they can create a better path for themselves. I really enjoyed and appreciated the chance to visit them.
What about pricing? Can you tell us a little bit about the situation in Brazil? Last month it was noted that there was higher availability of lower-priced coffees in the market – special preps always come at a higher price due to higher production costs. Is this still evident as the buying season progresses? What about the overall production cost vs. market price?
The New York Commodities Market is a little bit low at the moment and it is more sustained. Last year during the buying season, it was much higher. We don’t base our buying off of this. However, when we buy coffees at a high fixed price, the further away we are from the general market pricing. This increases our risk. Our coffees are always more expensive, as they are special preps, use selective picking, are fermentations – and therefore, have much higher production costs.
In other words, they are very distinctive. But, as a buyer, I always have to be aware of the level of risk when purchasing coffees above market value.
The higher the New York price is, the more beneficial it is for us. When the New York price is low, the commodity prices are usually much lower than specialty prices. This does indeed mean that there is an increase of cheaper coffee availability in the market.
Cost of production is a separate thing that can impact the price in the market. At the moment, it’s quite high in most countries, especially due to inflation. Even though production costs may be decreasing a little bit in certain origins, they are not doing so at the same pace as the general market. The price being paid for coffee in most markets has been reduced, while the cost of production hasn’t. This means that producers make smaller margins.
Tell us about our upcoming shipment. We’ve procured a variety of coffees from SMC, one of our partners in Sul de Minas – expected to arrive in around 1 month. This year, we’re working with a list of new suppliers. What inclined us to broaden our selection?
It’s important to us to maintain the price points we buy coffees at, as long as the quality of the coffee is preserved as well. We also want to differentiate the products we can offer at different price points.
Every year, we evaluate our buying versus the general market and what our clients need to determine the volume we will be buying. Unlike the commercial side of things, we don’t reduce the price to increase the volume. For us, it’s about stabilising the price. What we look at is how we can grow, or stabilise our volumes, after we have agreed on consistent pricing with our partners.
We’re always interested in finding new relationships in origins where our volumes have stabilised, or where there is potential for growth. Brazil is definitely one of those origins. We have grown over the last years, and I foresee potential for even more growth in the future.
It’s also important to note that in some cases, you might lose access to volumes or coffees from producers you normally buy from for a variety of reasons. That’s also why I’m constantly cupping new coffees, and seeing how other producers operate. Detecting potential for a unique collaboration is always important from that aspect.