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The principles behind Algrano's direct sourcing

To source directly means simply that it is the producers who make you offers when the coffees are still in their possession. The quality, price and samples you get come straight from them. This model has a lot of potential but it is only as ethical as the roaster who embraces it. Below are the principles we endorse to make direct sourcing a tool for positive change.

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Quality description & feedback are more important than cup scores

We believe quality goes beyond cupping scores. This is why we don’t set minimum scores for coffees to be offered on Algrano. The marketplace has seen 90+ Arabicas, coffees under 80 points and robustas, fine and commercial. However we do evaluate the quality of every single coffee uploaded to make sure they are clean, consistent and match the offer description. Producers also share their quality assessment with us so we can calibrate and with roasters. These are the discussions that create positive feedback loops and increase coffee quality in the long term. 

Our Quality Control

Long-term relationships are the means to an end: a sustainable supply chain

Our team is in contact with all 100+ verified sellers on the platform regularly and we know they share our vision for the supply chain. Even “old school” co-operatives in Peru bet on the future of the sourcing model we propose and want to be a part of it. We all believe that buyers and sellers need to be in direct contact and develop commercial relationships if the supply chain is to be sustainable. As Algrano doesn’t take positions on coffees, we don’t interfere in existing relationships. For us, the longer relationships are the better.

Relationship stories

Technology in coffee is not just about block chain. For us, market access comes first

We have an amazing team of developers working backstage so that sellers can offer with ease and roasters can buy with confidence. We believe digital solutions can bring the two ends of the supply chain closer and make it more democratic and efficient in ways that would not be possible otherwise. This is why we have been investing large sums in communication and feedback features, inventory management and sourcing planning. Full stock visibility online is commonplace in many industries. Now, coffee is not lagging behind. And do we invest in blockchain? Not yet. We believe granting producers access to new markets is the priority.

What our tech team has been working on

Price is important and so is timing. We support fixed pricing and pre-contracting

On Algrano, all coffees have fixed prices so sellers are not negatively affected by the market’s fluctuation and know what they will be paid in the end. High commercials are usually priced close to market rates because sellers know they are competing with large players, who often buy big volumes and hedge currency to be able to offer cheaply. Still, they are offered at fixed prices and roasters can add premiums or support social projects in producing countries when discussed with suppliers. The Upcoming Harvests allow roasters to pre-contract coffees before the harvest, giving producers more security. We love pre-contracts as they can be used by sellers to secure financing. 

What you can pre-contract

Transparency should go both ways

The FOB price is always public for all coffees. We also display our freight costs and service fee. We encourage sellers to provide the farmgate price when possible. They will only be able to confirm their exact exporting costs when the sales period for a given container is closed and they know precisely how many bags are being exported. All sellers on Algrano are very open about the theme and happy to guide you through their systems. However, transparency should be a two-way street. We encourage roasters to feedback on the quality and share information back to producers. In this spirit, Algrano released a market research for producers in 2021. We have also been data donors for the Specialty Coffee Transaction Guide since 2020.

More on communication

We share risks, reward professionalism and rebuke pity marketing

Algrano strives to minimize risks for both roasters and sellers. We intermediate quality claims and actively seek solutions for any issue that may arise. If the quality of a coffee is not the same on arrival as it was on offer, the roaster can make a quality claim. Looking back at all contracts since 2015, only 2% were not approved straight away. Whenever that happens, we help roasters negotiate a discount or cancel the contract and support the seller by finding a new buyer. 

Also, as coffee is a passion, people sometimes forget it is a business as well. That is not the case for us. We rebuke the narrative that producers need charity and showcase our partners as the professionals and entrepreneurs they are. The platform always shows how many sales a user has done through us and which roasters trust them. This is an indication of their performance and attracts new buyers. If a seller doesn’t comply with the agreed terms of the contract he/she can lose the verified seller status.

Read producer stories

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