Producer & Roaster Forum (PRF) is an annual event hosted in coffee producing countries bringing together professionals from a variety of backgrounds to taste coffee, attend panels and lectures held by industry leaders, and build connections with others from throughout the industry. This June, Ally Coffee COO Ricardo Pereira gave a panel presentation at PRF alongside Nick Castellano of Cropster titled Coffee Production and Technology: How data collection improves production outcome and business sustainability. We’re proud to share a recap of the panel here on our blog as we explore the panel’s central question: Why is data collection important for businesses at origin?
The first opportunity for data collection to make an impact for producers begins at the root of the industry: production planning and management. These impacts range from making fair projections about your upcoming yields to determining the strategy for planting or replanting on an existing plot on a farm. Data points concerning production planning in this way are numerous, including information regarding plant health, soil quality, historical yields, and more, providing opportunities for producers to engage with and understand their farm more comprehensively.
Data about coffee production can help guide both small and large decisions at the farm level, all the way up to determining the best varieties to plant for expansion or renovation. “Nowadays, producers everywhere are hearing about different cultivars, different varietals, and they are doing this almost like a gold rush to try to plant as many different ‘exotic’ varietals as possible on their property,” explained Ricardo. “You have the current state of things, the farm you’re running now, the state of production right now, and then you have this rush of ‘I need to add ten different varietals on my property.’ But, are these producers really doing their due diligence and having the information necessary to make those decisions that will impact their business and their farm?” While not every decision in production will prove as pivotal as selecting the variety that is likely to perform best on a particular plot, the value of collecting and interpreting data is clear.
Young coffee plants at Pablo Guerrero's Hacienda El Obraje in Nariño, Colombia
Post-harvest stages like fermentation and drying are steps which help define a producer’s final green coffee product more than almost any other factor, and the influence that proper data management can have on them is significant. Well-executed processing can elevate a coffee and highlight all of its best characteristics, while uncontrolled variables have the potential to create defects throughout a complete processing batch. “Collecting all of the different data points like pH, temperature, moisture levels… during the post-harvest process can help mitigate risk or maintain quality in what’s happening with your coffee,” said Nick during the panel.
Data collection isn’t simply tracking measurable variables in production and processing, it’s also critical in determining processing methods to adopt and use, and the scale at which these processes make sense for a producer’s business. “Producers are sometimes trying to rush to make decisions without the proper information and the data and the knowledge to really execute on that, and demand is one of them,” explained Ricardo. “When you’re producing coffee and you go to the processing side of it, there’s this [feeling] like ‘oh, I need to do the next innovative processing method that everybody’s doing because I think it’s the right thing to do,’ and the question is: is the supply and demand there?” While adopting innovative and sought-after processes can be a boon to the final sale price for a particular lot of coffee, there is a risk for producers who must ensure that they have an outlet for their efforts to avoid taking a partial or total loss on even a successful experimental lot.
WATCH: Rodrigo Sanchez—coffee producer and owner of Aromas del Sur in Huila, Colombia—discusses data collection in his work in this video shared in the panel presentation.
“Quality control is a tool, it’s a communication tool. All producers should be motivated to actually learn how to taste coffees and assess the quality so they can actually properly communicate that with their clients,” explained Ricardo during the panel. Quality assessment and the ability to share that information in an easy-to-understand way is one of the strongest tools that producers can leverage when it comes to building sustainable relationships and establishing fair prices for their work leading up to each year’s harvest. However, this value is derived as much from a producer’s ability to track and maintain data as it is from their ability to cup in a standardized way. “[Collect] that data in a way that's easy to digest, easy to visualize, easy to analyze, so that later on you can still talk about that coffee you harvested in the previous harvest and discuss it with a future buyer,” explained Nick. “There's a better understanding… of what the quality of that coffee is.”
This level of data-tracking supports improvements that are made in earlier production stages as well, especially as producers make changes to their processing methods or adopt a new process entirely. Historical quality data provides a baseline for improvement, and those records provide an easy comparison to use when determining whether a new process is a success or not; conveniently, with data tracking during processing, producers are able to then recreate or update their new process with educated decisions to continue seeking improvements year over year. “One thing that I like a lot about controlled fermentation is that you can almost predict the outcome of that coffee if I'm doing it properly,” said Ricardo. “If in coffee… we have enough data to back us up, we can repeat that. It's on the cupping table, during quality control, that I'm really going to see if that is working out or not and having the opportunity to make a better decision for my farm, for my business, based on that."
Q Grader Yeferson Olaya Prieto sample roasting coffee for quality control at his family's farm, Fina La Cinta, in Tolima, Colombia
Cost, Profitability, and Business Sustainability
Tracking data throughout production, processing, and quality control provides important insight to coffee producers, but perhaps the most important data for producers to maintain and understand is their cost of production and ultimately their profitability. “How can I know if I’m profitable if I don’t understand my cost of production?” asked Ricardo on the PRF stage. “Your livelihood, your business sustainability, depends on knowing your costs.” Ricardo pointed to one of our producer partner’s operations, Jorge Vasquéz and his Finca Cedral Alto farm and Roble Negro micromill in Costa Rica, as an example of this prinicple in action. Jorge and his team track all of their costs in a simple but effective spreadsheet, detailing expenses on agricultural inputs, labor, marketing, and more, allowing them to understand their cost of production for different lots of coffee produced there. This knowledge empowers them when determining the sale price of their coffees, ensuring sustainability for the operation for years to come.
While utilizing a system of cost tracking could benefit most any business in their day-to-day operations, this sort of capital management is far from standard practice for some coffee producers. In fact, during the panel, Ricardo shared a story of a successful and relatively large-scale coffee producer in Brazil who, when asked about their costs, had a difficult time determining concrete figures. Cost estimates like these are growing to be more and more precarious recently as global markets are experiencing high inflation numbers across essentially every industry, driving up the cost of production for coffee. In a coffee industry which has historically operated on very slim margins, this puts greater pressure on producers to track even small changes in their costs to ensure that they’re not selling their coffee for no profit or even for a loss. With market volatility and inflation both so high, the need to implement technological and data tracking changes at origin is perhaps more important now than ever before.
Jorge Vasquéz (right) pictured with Ally Coffee Specialty Sourcing Manager Bram de Hoog (left) at Jorge's Finca Cedral Alto in Tarrazú, Costa Rica
The challenges experienced by coffee producers when it comes to understanding their profitability are being highlighted by the volatility of global markets, but their cause and history run deeper in our industry, as Ricardo explained. "This is a systematic problem that we see in our industry - basic information is not readily available or easy to access on the producing side. And I think that as an industry we have a responsibility to really work closely with producers in the level of helping them to understand what their cost is so they can actually have a sustainable business moving forward. We're talking about people's livelihood, families that depend on this, so we need to join forces here and provide them tools and opportunities to really understand. Otherwise, we're going to be repeating this over and over and over again, and the producers literally, I feel like, are really feeling the pinch harder than anyone else in our industry, it is always the origin. So, it's about time for us to empower the producers to understand their real cost so they can actually make better decisions of selling or not selling, who they're selling to, for how much they're selling for, so that they can have actually a profitable business."
To address this problem, Ricardo points to coffee professionals in consuming countries as sharing in the responsibility of ensuring the sustainability of coffee. Many coffee businesses in consuming countries—including importers, green coffee traders, roasters, and others—frequently have easier access to business training and operational fundamentals, technology and more. “If I have that knowledge, why don’t I spend more time communicating or helping producers to really understand? As simple as providing a spreadsheet that they can plug in [their costs] and teaching them how to do it?” Ricardo said. “As an industry, there are creative ways of providing access to producers,” he continued, “…I’m just throwing out there, why don’t we come up with ideas where we can sponsor producers to have access to more technology that will help them to be more efficient as coffee producers?” While there’s no guaranteed solution and certainly no one-size-fits-all answer for a global industry filled with so much diversity, the sustainability of coffee at large depends on the success and profitability of coffee producers. Helping to create solutions that make sense for farmers and empower them to lead their businesses to success will be fundamental to ensuring a bright future for coffee professionals and consumers across the globe.
Coffee Production and Technology: Watch the Panel
You can watch the full panel featuring Ricardo and Nick, including the panel presentation and Q&A session held afterward, on the Producer & Roaster Forum YouTube page or in the embedded video below. Be sure to check it out to see all of the discussion, stories, and many insights shared by both presenters as they highlight this crucial topic in our coffee industry.