Coffee is one of the most important plantation commodities for many countries in the world. Coffee has become a fast-growing industry. The coffee industry covers the entire supply chain, from coffee farmers, collectors, collectors, processing, to marketing and sales.
Supply Chain itself is a series of business processes that connect several actors to increase the added value of raw materials/products and distribute them to consumers.
The supply chain basically consists of several elements, including:suppliers, manufacturing centers, warehouses, distribution centers, transportation systems, retail outlets, and consumers. An important aspect of the supply chain is the integration and coordination of all activities that occur in the chain(https://pustaka.ut.ac.id/lib/wp-content/uploads/pdfmk/EKMA437102-M1.pdf).
In short, after the coffee is harvested by farmers, they are packaged and shipped to large coffee traders, who will supply to various coffee retailers or roasters. Roasters buy raw coffee beans in bulk, roast them according to their preferences, and sell the finished product to consumers.
Coffee shops and retailers also play an important role in the coffee supply chain, as they purchase finished coffee from roasters and sell it to end consumers.
However, in this coffee supply chain, there are several business dynamics that must be faced by coffee suppliers or farmers to finished coffee marketers. Check out the explanation below.
Challenges in the Coffee Supply Chain
The coffee supply chain is a complex process and involves many stages that must be passed before the coffee can reach the end consumer. Hence, there are bound to be challenges that come for those who do business in the coffee world.
A major challenge in the coffee supply chain is the volatile price of coffee. Coffee prices can be affected by various factors, such as weather and climate changes, natural disasters, diseases, and global economic factors. This condition can put financial pressure on coffee suppliers or farmers, especially for those with limited capital and no adequate coffee insurance.
In addition to fluctuating prices, the coffee supply chain is also faced with access and distribution issues. Many coffee farmers still experience difficulties in marketing their plantation products to marketers due to inadequate road access and transportation facilities. For this reason, they are forced to sell to collectors.
After harvesting, coffee must also be processed before sale-drying, sorting and packaging. Thus, coffee farmers sometimes find it difficult to fulfill funding accommodations for tools and machinery.
Then, to meet quality and sustainability standards, coffee must also be certified. Challenges in certification include high certification costs, lack of information about the certification process, and requirements that are difficult for coffee farmers and marketers to fulfill. Especially for those who are still in the small-medium scale industry.
The final challenge in the coffee supply chain is the market. Increased global competition, competitors, and changing consumer preferences can make the market unpredictable and volatile. This can affect the ecosystem in the supply chain
Partnership Opportunities in the Coffee Supply Chain
Coffee farmer and marketer partnerships are a form of cooperation between coffee farmers and coffee marketers to increase coffee production and sales. These partnerships can involve several stages in the coffee supply chain, from production to marketing and distribution.
While there are challenges in the coffee supply chain, there are also opportunities for partnerships between coffee farmers and coffee marketers. One such opportunity is to improve market access and increase the added value of coffee.
This partnership can help coffee farmers access a wider market, so they can get a better price for their coffee. In addition, partnerships can assist in coffee brand development and branding, thereby increasing added value for coffee farmers.
At the production stage, for example, coffee marketers can provide technical support and training to coffee farmers in terms of crop management, fertilization, and pest and disease control. In addition, coffee marketers can provide access to high-quality coffee seeds and adequate coffee processing raw materials.
Then, coffee marketers can help coffee farmers with post-harvest processing and packaging. Coffee marketers can help improve coffee processing facilities and provide technical support on the process. Thus, the quality of coffee can be better guaranteed and its selling value can increase.
Coffee marketers can also help market coffee from coffee farmers directly to local and international markets. This is to reduce distribution costs that usually stop at collectors, and to improve the welfare of farmers.
In addition, coffee marketers can provide support in terms of certification to meet stricter market requirements. Coffee marketers take on the role of paying attention to social and environmental aspects in farmers’ coffee production.
Conclusion
With these partnerships, coffee farmers and marketers can streamline the coffee supply chain. Also, it can reduce production and distribution costs. Thus, the price of coffee in the market can be kept stable.
The coffee produced is also guaranteed in quality and quantity. Big coffee marketers no longer have to worry about the coffee produced by the farmers they nurture.
Socially, the welfare of farmers and marketers is more assured. Because of the partnership system and technical support provided by coffee marketers to farmers, it can be a sustainable business certainty.
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