The coffee you drink undergoes different channels and stages before it gets to the cup. When it comes to the coffee trade, coffee cooperatives are among the most influential parts of the global coffee trade.
Usually, the coffee beans are bought and sold as special products and commodities through either direct sales or layers of middlemen.
Coffee cooperatives provide a platform where coffee growers have their voices heard within the coffee trade process. This article will discuss everything you need to know about a coffee cooperative.
What is a Coffee Cooperative?
A coffee cooperative refers to a group of coffee producers cooperating to acquire better access to business opportunities, and resources, better marketing strategies, and training. Most coffee cooperatives have full-time staff that work in research, marketing, administration, and education.
Coffee cooperatives come in different structures as well as sizes. You’ll find that some cooperatives are massive while others are far smaller. These smaller cooperative versions are known as micro-cops with few members.
Usually, members of a coffee cooperative pay a membership fee that is reinvested by the cooperative into the coffee community. Coffee cooperatives work under the logic that combined funds from members can help them achieve more than they would if they chose to spend the funds individually. Apart from leveraging coffee farming resources, coffee cooperatives also offer things like credit services to the cooperative members at much better interest rates.
Generally, coffee cooperatives aim to put the products and services of the cooperative members on the market at more advantageous terms than they would achieve by themselves.
How Does a Coffee Cooperative Work?
A coffee cooperative works by cooperating as a group of coffee producers to gain better access to things like coffee farming resources, technology, good credit at good interest rates, better marketing strategies, and training on coffee farming and production. In addition, coffee cooperatives negotiate prices for smaller independent growers. Not to mention, they also offer coffee producers infrastructure such as bagging and milling equipment at a flat fee that they later deduct from the eventual sale cost.
Coffee cooperatives that are well-run will help coffee growers shine as well as improve their standards of living.
Smaller coffee farmers may find it hard and expensive to find international buyers, individually process the coffee, market, and export it. And that’s why they rely on coffee cooperatives that have more resources and who are in a better position to negotiate high prices for the beans.
What’s the Purpose of a Coffee Cooperative?
The purpose of a coffee cooperative is to provide and distribute benefits to the cooperative members based on their use. The benefits provided may include:
- Farming supplies such as pesticides and fertilizers
- Technical assistance
- Educational resources
- Facilitating certification
- Providing credit loans at low-interest rates compared to banks
- Buying the cooperative members coffee and selling it on their behalf
- Business advice and training
- Connecting members directly to buyers
Why Choose a Cooperative?
Coffee producers don’t have to work with cooperatives to sell their coffee. They can choose to work independently in terms of processing coffee, exporting it, getting certification programs, and more. However, why do coffee producers choose coffee cooperatives rather than working independently?
The first reason why some coffee producers choose cooperatives is that they lack enough resources to work independently. Secondly, some small farmers may fail to produce enough coffee that can attract roasters as well as exporters. This forces the farmers to sell their coffee to intermediaries at commodity prices.
Equally important, some coffee producers lack the resources to market their products to international buyers. Such resources include creating social media accounts where they can market themselves, attending worldwide coffee events, and devoting time to meeting with potential buyers. Therefore, these farmers choose cooperatives that can do all this on their behalf.
Coffee Cooperative Drawback
While coffee cooperatives work by helping coffee producers sell and process their coffee, they are not that good. One of the drawbacks of coffee cooperatives is that they don’t allow coffee consumers to experience the unique properties of coffee beans from different coffee producers.
This is especially common with large cooperatives. You’ll find that these coffee cooperatives create uniformity with the coffee beans as a result of the massive number of members. However, micro-cops focus on origin sourcing and flavor profile of different coffee beans since the members in the cooperative are few. Most micro-cops even have micro-lot programs that highlight the different coffee beans from different producers. This allows coffee consumers to have a distinct coffee-tasting experience.
Another drawback of coffee cooperatives is that it’s difficult to establish how much product price the original coffee producers get. This is because coffee cooperatives act as middlemen between coffee producers and buyers. Therefore, you’ll find that most coops are not completely transparent to the coffee producers on the profit they make leading to unequal profit sharing.
While coffee cooperatives have some drawbacks, they serve a vitally important function in connecting coffee producers to buyers. Not to mention, coffee farming is recently a challenging industry as a result of price fluctuations and global warming. Coffee cooperatives work with coffee producers to support them through such difficult times by providing credit, infrastructure, training, and access to coffee roasters or buyers.