Building resilience for the long term
Roughly a 1 minute read
The second of our Covid-19 supplier commitments is to honour every one of our long-term agreements and contracts already in place and look to grow volumes where practical.
Strong relationships and responsible trading practices, supported by long term contracts, are central to the way we work with our suppliers. They allow us and our suppliers to plan for the future.
Our use of long term contracts is very different to how many tea and coffee buyers operate. Tea and coffee are mainly used in blends, where small changes in ingredients at different times of year aren’t noticeable for us enjoying our brew at home. This means that buyers often focus their business on where they can get the best value at any given time, making it difficult for growers and producers to plan ahead and putting downward pressure on prices.
The security of a long term contract means that our suppliers are more likely to invest in their business – their farms or factories. We want our suppliers to know we remain committed to these agreements, both through the bad times and the good, and that we’ll buy more where we can. In turn our suppliers can confidently make the investments needed to employ and support their people through the pandemic.
It’s been great to see this commitment work in practice with a Rwandan cooperative who we work closely with and contract to buy a specific volume of coffee from each year.
We were glad to be able to support their farmers through our emergency relief fund. But from early conversations we realised that, of all our East African suppliers, this cooperative was perhaps most vulnerable to the negative impacts of Covid. With the closing of cafes and restaurants during lockdown, a huge portion of their sales had dried up and the cooperative were left potentially only being able to buy a small amount of their members’ cherry. The farmers would then have to sell the rest of their produce to middle men for a much lower price.
Due to our continuing good and growing demand, we’ve been able to buy 67% more coffee than originally planned. This means the cooperative can cover some of the volume lost from other sales and it’s helped them buy a lot more of their members’ cherries at a good price, providing much needed security for farmers.
Last updated 20th July 2020