On our imaginary sourcing spectrum, direct sourcing and direct trade are kind of blurred together. We like to think about direct sourcing as a necessary development of the direct trade movement, pioneered around 20 years ago by roasters such as Intelligentsia, Stumptown and Counter Culture in the US. Such roasters could purchase directly because they had the capacity to either contract full containers and finance them (though traders were still involved many times). Ironically, these roasters were promoting better practices at a time when the number of independent micro-roasters soared. Every new roaster wanted to do direct trade but few had the means.

The movement soon spread to the UK, where roasters like Hasbean, Square Mile and James Gourmet started developing their own transport solutions. By the 2000s, direct trade was widely used and, unfortunately, misused too. Like with Fair Trade, it was such a powerful marketing strategy to boast about a company’s values to consumers that it was largely embraced only in name without the practices to back it up. In 2017, Daily Coffee News pronounced the term dead. Today, the definition is so foggy that even traders will say their coffee is direct trade. Why did it go so wrong? The answer is simple: the necessary logistics and financing were not available at scale. 

The fourth edition of The Coffee Guide explains that direct trade “has been far less successful in implementation at scale than initially predicted. The direct trade model has developed slowly because, to work smoothly, it requires a great deal of input, a solid infrastructure and a high level of know-how and business skills – all of which are often lacking, as farmers and roasters are typically unfamiliar with the requirements and realities of international trading and logistics. Direct trade is often unnecessarily expensive and inefficient because many small producers and roasters do not have the resources or knowledge to manage international requirements.” 

Though great on paper, direct trade presented too many barriers to become a viable sourcing solution. On the other side, the movement was the fertile soil from which Algrano sprung. For us, direct sourcing is an upgrade. Yes, there are some producers and exporters who are bringing coffee to Europe and selling it from SPOT positions. But most don't have the capital for it. Direct sourcing requires less upfront investment from producers, is scalable and democratic. It's not without its challenges but for us, it is simply better. 

Sellers offer the coffees they choose at the prices they believe to be fair and roasters decide what to buy. The “Coffees” page is the equivalent of producers online shops which they manage themselves. Everything is transparent, including our service fee, and the communication between seller and buyer can start even before a sample is ordered. As we don’t dictate the offer, roasters can comfortably say coffee has been sourced directly when they buy through Algrano. Our marketplace is merely an interface.  

Our logistics work consists of coordinating multiple shared shipments with partners in producing countries. We consolidate orders from multiple producers bought by multiple roasters in the same container and ship them together. It is a job no one wants to do because each 5-bag order demands as much work as a full container. However, direct sourcing would never become mainstream if no one was willing to do it.