Colombian Coffee: Challenges and Opportunities Ahead for the Colombian Coffee Growers' Federation

Article excerpt

For many years Colombian Coffee has being recognized as one of the most important coffee producers in the world. In response to changes in the global coffee market, the Colombian Coffee Growers' Federation has successfully adapted its supply chain models to meet the challenges of new market conditions.

Today, the global coffee market is more convenient, dynamic and flexible than ever before. In the wake of the global economic crisis, consumers are spending less on coffee by drinking at home and masters are responding by launching convenient, easy-to-use premium products. New players and distribution channels are emerging, traditional brands are competing with cheaper products and major companies are taking tactical measures to increase their market share, creating a need for supply chain changes to adapt to market conditions.

The Colombian Coffee Growers' Federation shifted to a new supply chain model in order to respond to customer needs. In helping more than 500,000 coffee producers, of which 91% are small farmers, go global, our first response was to engage the coffee growers in the supply chain concept. This included the main elements of a pull system model with the aim of protecting our core value proposition: freshness.

In adapting our supply chain models to changing market conditions we were able to do so without affecting the value proposition of our product. Through the following examples the federation has demonstrated how flexible supply chain models can succeed in evolving market conditions.

In Japan, the federation has supplied high-quality green coffee beans to one of the major soft drink companies for more than 15 years, demonstrating how innovative ideas have longevity in the complex world of commodities. The model is simple. The federation sells the company high-quality, branded green coffee beans to supply the most successful canned coffee in the Japanese market. The final product bears the brand of the beans, which is owned by the federation but licensed to the soft drink company. The success of this business has seen premium prices delivered to growers with social benefits to the coffee-producing regions where these coffee beans are grown.

In one of the federation's most challenging models, it has the responsibility of delivering green beans from the farm directly to the European factories of one of the world's largest food companies. …