The concept of “direct trade” has become synonymous with specialty coffee. Often used in marketing to show that brands care about sustainability, many roasters and coffee companies claim they “know their farmers” or “buy ethical coffee”. But without real action behind these statements, the impact can be superficial.
At its core, direct trade is about more than just branding: it’s ensuring that more value (or the sales price) stays with coffee producers at origin.
Historically, buying directly from farmers has been nearly impossible for most roasters, especially smaller-sized enterprises. Coffee trade has been expensive, complex, and often not feasible due to a number of trade barriers.
In today’s market, however, there are more opportunities than ever before that simplify international trade, thus making it more affordable. By working with companies at origin, roasters can buy directly from producers, bypassing intermediaries who no longer add direct value to the supply chain.
By doing so, smallholders can improve their economic sustainability, building a more resilient coffee supply chain for the future.
To learn more, I spoke to Andres Diez, Chief Operating Officer, and Jennifer Poole, Director of Global Business Development, at Those Coffee People, as well as three of the company’s partner producers.
You may also likeour article on what direct trade really means.
Addressing key issues in coffee production
Retaining more value at origin has never been so important. Even with the C price recently hitting a 13-year high, many producers aren’t reaping the benefits and receiving more money for their coffee.
This is particularly true for smallholder farmers, who produce up to 80% of the world’s coffee supply. Despite this, 44% of them are estimated to live below the poverty line of US $3.20 per day. Resultantly, investing back into their farms to grow higher-quality coffee can be impossible, which puts them at a clear disadvantage and keeps them stuck in a cycle of poverty.
A number of issues are exacerbating producers’ economic instability, too. One of the most recent studies published in the journal PLOS Climate found that rising temperatures caused by global warming are likely to lead to “ongoing systemic shocks” to coffee production. This can lead to lower yields, making smallholders more vulnerable to market fluctuations.
Moreover, the European Union’s Deforestation Regulation is set to have significant ramifications for the production and trade of coffee around the world when it eventually comes into effect. Smallholder farmers need support in proving their due diligence – or risk losing access to a market that consumes a third of the world’s coffee supply.
Juan David Builes is a producer at Café Los Cedros in Ebejico, Antioquia in Colombia, who works with Those Coffee People, a company that facilitates partnerships between producers and international businesses that roast or serve specialty coffee in over 20 markets worldwide. He explains some of the challenges that his local community has been facing.
“Younger people are quickly abandoning coffee production and moving to cities for better opportunities,” he says. This can cause a number of problems in the industry, including an ageing producer population and growing disinterest in coffee production.
“Through direct trade, roasters help us preserve not just our farms but our cultural heritage,” he says. “Direct trade can ensure that our traditions and unique coffee profiles continue to be passed down to younger generations who may find opportunities to continue working in the coffee industry.”
Why fewer intermediaries mean more value at origin
The direct trade model was born from the belief that unnecessary links exist in the coffee value chain, leaving less of the final price in the hands of the producers who grow it. That’s not to say, however, that some intermediaries don’t play an essential role in the industry.
Historically, the global trade of coffee relied on large intermediary parties and huge logistics and warehousing systems established from colonial trade models. Producers would often receive low prices, while large trading companies sold the coffee at a higher price, claimed the markup, and kept profits for themselves.
Shipping coffee around the world was complicated and expensive during this time, so traditional trade models had to rely on intermediaries to move shipments. However, the days when only larger roasters and more established traders could navigate the market are long gone, thanks primarily to direct trade and technological advancements in green coffee trading.
Andres Diez is the Chief Operating Officer at Those Coffee People. He explains how green coffee trade has become more streamlined and accessible.
“Intermediaries played a crucial historical role in the coffee trade, but in today’s globalised economy, technology and direct communication make it possible to forge real, transparent, and direct partnerships,” Andres says. “Now, even smaller roasters can buy directly from origin, bypassing the traditional trade intermediaries that require higher profits to operate in more costly destination countries.”
To adhere to a true direct trade – or “direct from origin” – concept, all actors in a supply chain must add value and serve an important purpose. Simply put, a leaner operation with fewer intermediaries means all actors, especially producers, can retain more of the final sales price for themselves.
Jennifer Poole is the Director of Global Business Development at Those Coffee People.
“True direct trade helps retain more value at origin by cutting out unnecessary intermediaries, ensuring that more of the final sale price reaches the producers,” she says. “This, in turn, supports the overall sustainability of the coffee industry, helping to preserve its diversity and cultural richness. By keeping more money in the producing country, direct trade empowers these farmers to invest in their businesses, improve their quality, and maintain their livelihoods.”
Building trust
Access to services such as WhatsApp, international wire transfers, exporting and importing licences, and looser trading legislation can help smaller-sized roasters and producers connect and work more closely together.
While producers and roasters can easily connect through online platforms, these interactions alone don’t constitute true direct trade. To achieve this, both parties need to establish a deeper working relationship that fosters trust and connection.
Elkin Diosa is a producer at Aprokafes in Caicedo, Antioquia in Colombia, who works with Those Coffee People. “When roasters choose to work directly with us, they’re not just buying coffee; they’re investing in our families, land, and future. It’s a partnership that goes beyond profit, creating a legacy that benefits everyone involved.
“Transparency is the foundation of direct trade,” he adds. “When roasters see the real impact of their purchases, they understand that they’re not just buying a product, but they’re supporting a way of life that deserves to be preserved.”
Navigating challenges
But even with access to technology, producers and roasters can still face logistical hurdles when implementing direct trade models.
“When roasters or coffee brands establish direct trade relationships with producers on their own, they may become overwhelmed with barriers to entry,” Andres says. “Language barriers, bureaucracy, convoluted trade policies, legal requirements, complex logistic procedures, and lack of access to financing generally make trade between small and medium roasters and producers difficult.”
He explains how exporters like Those Coffee People, which are based in producing countries, help to overcome these challenges.
“We act as a facilitator, ensuring that producers and roasters can collaborate effectively,” he says. “We serve as the sales and logistics team for producing partners, providing marketing content, pricing strategies, and quality control so farmers can focus on growing excellent coffee.”
Not only does this help streamline operations, but it also helps exporters forge closer relationships with producers – ensuring all intermediaries serve a valuable role in the supply chain.
“At the same time, we are the sourcing and procurement team for partners in export markets. We negotiate based on volumes or futures contracts, guaranteeing quality standards are met and timelines are adhered to,” he adds. “Roasters can then focus on selling a high-quality product to end consumers.”
This also allows roasters to retain more value as they can spend less time managing the logistics of coffee trade and reducing costs, and instead can focus on other areas of their business.
Why collaboration is key to sustainable direct trade
Smallholder farmers often struggle to participate in direct trade due to limited market access, infrastructure challenges, smaller production volumes, and the high cost of certifications. Financial barriers, lack of knowledge, and uncertainty about forming close relationships with roasters also prevent them from benefiting from the potentially higher returns that direct trade can offer.
Similarly, smaller-sized roasters and importers can face a number of challenges when sourcing from different origins, especially if they buy lower volumes. Exporting partners like Those Coffee People can serve as a bridge between these producers and roasters, offering logistical support and a platform to foster long-term partnerships rooted in transparency and sustainability.
Key supply chain actors, producers, exporters, and roasters all have a responsibility to fulfill their obligations when buying coffee through direct trade.
“For producers, this means maintaining high standards and delivering on promises, having a firm grasp of their numbers, providing accurate quotes promptly, and, where necessary, shouldering basic financing responsibilities to maintain smooth transactions,” Andres says. “For roasters, it means understanding the realities of direct trade, such as higher shipping costs and potential variations in product quality. Roasters need to acknowledge that exceptional, non-washed coffees will never be entirely defect-free and perfectly consistent from one harvest to the next.”
Many external factors influence coffee quality and flavour profile, ranging from rainfall to temperature. Producers have little to no control over these variables, which means roasters have to anticipate that no two coffees will taste exactly the same.
“Climate change presents significant challenges, and those who value sustainability and long-term partnerships must be prepared to embrace these natural variations, trusting that the quality and character of the coffee remain unmatched,” he adds.
Maintaining diversity
Specialty coffee thrives on its diversity of origins, processing methods, and flavour profiles. But this is at risk without opportunities to buy directly from origin, especially as consolidation continues in the green coffee trading sector.
“Without direct trade relationships, the industry risks becoming homogenised, with offerings limited to coffees that are convenient and profitable for large-scale farms to produce,” Andres says. “Roasters who engage in direct trade stand to gain a number of benefits that extend beyond just sourcing high-quality coffee. Many small specialty farms are innovating to differentiate themselves, which means roasters have a wide range of coffees to choose from.”
Planting a range of different varieties and developing advanced processing methods to create specific flavour profiles can help producers stand out in the market, offering roasters a more diverse array of coffees.
“This accessibility is crucial for maintaining a diverse and competitive coffee market, where small farms can thrive alongside larger operations,” Andres adds.
Paula Concha is a producer at Finca Santa Elena in Ciudad Bolivar, Colombia, who works with Those Coffee People. “Long-term relationships with roasters who care about direct trade have allowed us to plan for the future with confidence,” she says. “Without this commitment, we’d be at the mercy of market fluctuations, unable to invest in our business.”
Avoiding the dilution of direct trade in marketing
Since the industry’s inception, direct trade has shaped roasters’ sourcing practices and helped bridge the gap between producers and consumers. For these reasons, many celebrate the use of the term, emphasising how it promotes the positive aspects of specialty coffee.
It would be reductive, however, to claim that the direct trade model has no issues. The term has no formal definition or certification, meaning it can be challenging for consumers and roasters to understand what it truly entails. This can quickly escalate into a number of problems, namely that traders and roasters don’t necessarily have to substantiate claims of buying coffee directly from farmers and retaining more value at origin.
Without showcasing a valid and genuine commitment to fair and mutually beneficial buying practices, using the term “direct trade” in marketing can become hollow. Not only does this damage consumer trust and loyalty, but it also harms relationships with producers and coffee-growing communities.
Andres says like many other terms in the coffee industry, direct trade is at risk of being greenwashed and misused in marketing and branding.
“Direct trade is often used superficially in marketing, masking its true significance,” he tells me. “The term should represent not just a relationship between roasters and producers but a commitment to sustainability.
“When direct trade is used merely as a buzzword, it undermines genuine efforts made in the supply chain, leading to missed opportunities for true impact,” he adds. “Economic sustainability is critical for producers, especially for small farms that face increasing pressures from larger, industrial-scale operations.”
True direct trade has the potential to reshape the global coffee supply chain into one that is not only more sustainable but also more equitable.
To tap into this potential, direct trade needs to be more than a marketing buzzword. Roasters seeking to preserve coffee diversity and promote prosperity at origin must align with exporting partners who share a commitment to sustainability and transparency. Through these partnerships, roasters can build long-term relationships with producers that improve their economic stability.
Enjoyed this? Then readour article on why it’s easier for wealthier producers to grow specialty coffee.
Photo credits: Those Coffee People
Perfect Daily Grind
Please note:Those Coffee People is a sponsor of Perfect Daily Grind.
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