What is Direct Trade?
Direct Trade is the purchase of raw materials directly from the source, so in the case of coffee, directly from the farmer. This is not the typical channel for coffee sourcing, as most coffee is traded through the commodity market.
But the commodity market doesn’t work for everybody, because it’s often unpredictable, and confusing. The advent of direct trade was the result of this overwhelming complexity, and the demand from consumers to be increasingly aware of the the farming conditions in the country of origin.
It’s also important to recognize that true direct trade only happens when the roaster or retailer is in direct communication with the farmer, and that once an intermediary is involved between those two ends of the supply chain, the coffee is no longer direct trade. It is still a traceable coffee, to be sure, because you can still determine where the coffee came from, but if it’s imported in bulk and then sold out of a warehouse, the direct connection has been broken.
How can ICM help?
Inspired Coffee Merchants boasts a global network of independent coffee farmers and cooperatives that are interested in establishing direct trade relationships with roasters and retailers in consuming countries. ICM can serve as the broker of these direct trade relationships, and is therefore not an intermediary. We are a third party orchestrater, and an enabler-of-sorts, to help both farmer and roaster achieve their sourcing objectives without having to compete in a market that is not designed in their best interests.
Why Direct Trade?
Direct Trade is designed to help smallholder farms access international markets more easily, where they can earn a better wage, and focus more on quality rather than salesmanship. For the roaster or retailer, the ease of sourcing through direct trade far exceeds the unpredictable nature of sourcing from the market at large. They are able to pay predictable prices, and ensure quality on a more direct basis.
Think of direct trade as fair trade, but aligned specifically between two known buyers and sellers. The farmer will always be guaranteed a fair, if not generous, price, and the roaster/retailer will be guaranteed certain levels of quality and production ethics.
For more details on the increased profitability of Direct Trade, feel free to consult the thesis written by Justin on the matter, here.
Who are these farmers?
The ICM farmer network is composed of small to medium-sized coffee farms around the world, all of whom we’ve had the privilege to get to know personally. They are predominantly family-farms that have been passed down through the ages — some have been operating in the family for well over 100 years!!