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BRIDGING
THE
DIGITAL
DIVIDE
Introducing Modern Business
Systems at Origin in Latin America
By Jimmy Sherfey
SPECIALTY COFFEE PROFESSIONALS
of grounds. Real-time data reading
understand the importance of
and reporting is imperative. A former
precision. Roasters want uniform
competitive barista, Byron Holcomb
bean sizes and colors. Baristas want to
brings this desire for precise, accurate
know to the milliliter the amount of
and comprehensive data to the coffee
water coming into contact with a bed
farms he now manages.
continued on page 24
Photo: FAL Coffee’s Santa Izabel farm in Ouro Fino, Sul de Minas, Brazil. | photo by C.S. Sandoval
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Bridging the Digital Divide | Introducing Modern Business Systems at Origin in Latin America
(continued)
Standing in a densely planted lot on Santa Izabel—a
farm in Ouro Fino, in the Sul de Minas region of
southeastern Brazil—Holcomb is accompanied by his CEO,
John Moore, and director of sourcing, Matt Swenson. They
are discussing the direction in which they will take this
lot in the coming season, considering various pruning
practices and a change in planting density. Together they
make the decisions at FAL Coffee, a vertically integrated
company with two proprietary farms in Sul de Minas.
The farm managers seek to extract the best coffee the
soil has to offer, but they also want to know how much
each lot costs to produce—a calculation that can be elusive
for such a large operation, factoring in labor, inputs, yield
and other elements. As an example, Holcomb references a
farm employee currently scooting a tractor up a mountain
path. The worker must report what he is doing, where he
is doing it, and how long the task takes.
To get a handle on production costs, all of this
information goes into Gerente Agricola, a farm
management software tool designed in Brazil. Moore
compares the program to a point-of-sale (POS)/
inventory system at an espresso bar. He can be sitting
FAL Coffee CEO John Moore. The company uses Gerente Agricola, a farm management
software tool designed in Brazil. | photo by C.S. Sandoval
24
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in the Nobletree cafe—FAL’s retail shop set to open in
Manhattan’s World Trade Center complex this fall—and
see what projects are underway at both of
the company’s Sul de Minas farms. Used to
its fullest capacity, Gerente Agricola would
allow FAL staff at the company’s roastery in
Brooklyn to cup a microlot from one of its
farms, then look up the cost of production
for that particular coffee.
“For us, it all comes back to this idea of
sustainability and running a business,” says
Moore. “We end up managing everything
from agricultural practices, labor, sales,
prep. It’s a full-spectrum coffee agricultural
management system.”
To a coffee professional obsessed with
quality control, this level of traceability is
not only comforting, it’s like that buzz after
the morning’s first gulp.
Moving Mountains
While an integrated company such as
FAL Coffee appears to be on a fast track
continued on page 26
FAL Coffee is working with the makers of Gerente Agricola to allow users to enter cupping results directly
into the data management system. As shown in the photo, FAL staff still log this information on paper.
photo by C.S. Sandoval
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Bridging the Digital Divide
(continued)
Coffee from FAL Coffee’s Santa Izabel farm is sampled at the ICATU mill in
Ouro Fino, Sul de Minas, Brazil. | photo by C.S. Sandoval
to optimizing efficiency, there are countless producers and
cooperatives not yet privy to the protocols of global commerce.
Coffee, arguably one of the most global businesses, constantly
grapples with reconciling its agrarian roots with the most techsavvy branches of the industry.
An alarming number of co-op managers continue to deal
with massive amounts of paper, or simple Excel spreadsheets if
they have a little more technical know-how. In an increasingly
connected specialty coffee industry, one in which buyers
and roasters rely on exclusivity and the assurance that the
coffee they purchase will arrive on time and meet specific
quality criteria, the grey filing cabinets that many roasters
remember from the workspaces of their parents are not just an
anachronism, they are dead weight. To bring coffee origins up
to speed, numerous nonprofits, trade organizations and private
enterprises are looking for ways to increase connectivity across
the supply chain.
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information.
Tyler Clark is global director of advisory services at Root
Capital, a Massachusetts-based global lender for cooperatives
working toward economic and social advancement. Making
frequent trips to Latin America, he sees firsthand the gulf
between origin and technology. Co-op managers may have
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a working inventory system in place, but they often are
overmatched by volume, in which case sound bookkeeping takes
a back seat to getting coffee cupped, bagged and sold.
continued on page 28
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FAL Coffee farm manager Byron Holcomb operates a Penagos adjustable
system, a series of de-skinners used in the pulped-natural process at the
company’s Santa Izabel farm. | photo by C.S. Sandoval
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FAL Coffee’s Santa Izabel farm in Ouro Fino, Sul de Minas, Brazil.
photo by C.S. Sandoval
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Bridging the Digital Divide | Introducing Modern Business Systems at Origin in Latin America
COLOMBIA
A National Data Management System
W
HILE COOPERATIVES and
have, we show them this SICA system and
specialty coffee buyers strive
discuss how we can leverage it so it makes
to establish a dialogue, the Federación
sense from an agronomic and marketing
Nacional de Cafeteros de Colombia (FNC,
perspective,” Samper notes.
or Colombian Coffee Growers Federation)
the program collects region-specific
chain efficiency and data collection
information based on environmental
over the past 15 years. Among the FNC’s
variations across Colombia’s three
technological advances is the Smart Coffee
mountain ranges. The FNC then provides
ID card, an electronic financial services
advice to individual farmers, using data
program facilitated by the Bank of Bogotá
trends to recommend the best time to
allowing farmers to receive payments,
fertilize or when to protect against an
make deposits and purchases, and even
attack by a would-be pest.
Perhaps more transformative for the
the FNC would need explicit authorization
to do so, which can be complex. Through
keeps tabs on the farmland of more than
aerial photos and extension visits, the
500,000 producers in Colombia. SICA
FNC has an accurate picture of a given
houses information on tree variety, age,
farm’s proprietary information, but
planting density and more—all down to
in the same way a roasting company
the lot—and documents the turnover
might not want its production numbers
of farmers in the coffee trade as well as
available online, farmers aren’t likely to
changes to existing farms, such as when a
dive into transparency without looking.
new lot reaches maturity or a new variety
And because 95 percent of the producers
is planted. Data is gathered through
documented in the FNC network farm
regular farm visits by a network of more
less than 5 hectares, a farm is not just a
than 1,500 extension agents, with the help
workspace, it is home.
“Sometimes, they don’t want their
private information available, where their
or the farmer tells you is not as accurate
harvest is going to be, and things of that
as what the picture shows,” says Luis
nature,” Samper says. “Sometimes it’s just
Fernando Samper, chief communications
for their own personal security.”
and marketing officer for the FNC. “In
systems are extremely weak,” Clark says. “They
may be doing several million dollars in gross
revenue throughout the year while literally
managing their accounting or inventories in a
notebook.”
As for divulging a specific grower’s
(Sistema de Información Cafetera), which
“Sometimes whatever the grower
relationships, but their financial management
information to potential microlot buyers,
industry is the database known as SICA
of satellite imagery tools.
“In many cases, producer enterprises
have strong production capabilities and buyer
To better understand harvest patterns,
has made significant strides in supply
register to vote in FNC elections.
(continued)
This is a valid concern across Latin
Matt Swenson, director of sourcing at FAL Coffee, tests
the fragrance of coffees from the company’s Santa
Izabel farm in Brazil. | photo by C.S. Sandoval
Root Capital is collaborating with German
terms of area, sometimes farmers don’t
America, where in many countries hardly a
software company SAP to roll out an application
know what they actually have.”
generation separates the present political
that will aid producer organizations in
landscape from the civil wars of the past.
inventory management. The company also is
Colombia’s rust problem beginning in
Building infrastructure and opening a
partnering with the Washington, D.C.-based
2008, predating Central America’s ongoing
dialogue between trade partners involves
business solutions company TechnoServe to
rash by several years. With information
more than just building a robust software
introduce an SMS-based bookkeeping system in
pinpointing affected farms, the FNC was
tool. It requires a liaison who is willing
Rwanda. (SMS stands for short message service,
able to facilitate the seeding of rust-
to communicate with producers, is
commonly known as texting.)
resistant varieties and deliver instructions
sensitive to the needs of individuals and
on combatting rust when and where help
understands trends in the industry.
SICA was instrumental in reining in
was needed.
In terms of market access, the FNC’s
agile data tool plays an integral role.
“Every single client that wants to work
with the federation, the first meeting we
“We have to keep the trust of growers
“Free-flowing, timely information can level
the playing field when it comes time to sign
contracts. Co-op managers have access to real-
for gathering data and for analyzing
time data on inventory volume and valuation,
information,” Samper says. “We are very
which translates to better business decisions,”
careful not to lose that trust.”
Clark says, referring to the mobile technology
pilot. “Ultimately, higher-quality information
continued on page 30
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Bridging the Digital Divide | Introducing Modern Business Systems at Origin in Latin America
(continued)
at the negotiation table equates to transparency
and stability, and that’s positive for buyer and seller
alike.”
Martin Mayorga can attest to the importance
of real-time data. His roasting company, Mayorga
Organics, which supplies major retailers including
Costco, has established relationships with
cooperatives to help them expand quality and build
capacity. With a tight-knit managerial staff based
in Maryland and Central America, the company
receives accurate supply forecasts by working
closely with cooperatives and monitoring progress
throughout the year. In 2013, when coffee leaf rust
spread rapidly across Central America, Mayorga’s
personnel at origin realized the harvest would be
decreased by half, so they quickly helped the farmers
diversify their income sources by planting chia.
“I truly believe if we hadn’t done chia we
wouldn’t be in business right now,” Mayorga says.
Paul Newbold, head roaster at Ozone Coffee Roasters, says his company uses Cropster “on a
daily basis to manage stock, recording detailed origin, source, supplier and process data on
every coffee that enters the roastery.” | photo by C.S. Sandoval
continued on page 32
Managers of Nicaragua’s Cinco de Junio cooperative gained hands-on experience with Fair
Trade USA’s Acopio system at a training in April. | photo courtesy of Fair Trade USA
Writer Jimmy Sherfey interviews managers from the Cinco de Junio cooperative at the
training on Fair Trade USA’s Acopio system held in Seattle in April. | photo courtesy of Fair
Trade USA
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FAL Coffee’s Santa Izabel farm in Ouro Fino, Sul de Minas, Brazil.
photo by C.S. Sandoval
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Bridging the Digital Divide | Introducing Modern Business Systems at Origin in Latin America
(continued)
Even before 2013, Mayorga recognized the
similar technologies that are commonplace in more developed
they need to become better organized and report
industries.”
accurate information. He had hoped to finance
the cooperatives working with Fair Trade USA dictated the need
located in Las Sabanas in northern Nicaragua, to do
to develop credit management systems, as bookkeepers must
just that. The program was designed by an upstart
account for each member-producer and match the harvested
called Acopio (a Spanish word meaning gather or
coffee deposited with the micro-financing awarded pre-harvest.
stockpile) to modernize accounting and inventory
After a year of research and development, however, Wetch
management systems at cooperatives, but Mayorga
and crew discovered issues even more pressing than credit
lost contact with the upstart when the program
management—not the least of which being unreliable Internet
entered a reorganization phase after being acquired
connections.
It was during this period of reorganization in
2014 that Acopio’s coordinator at Fair Trade USA,
Bennett Wetch, gleaned research in the field to
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“Since they were losing a lot of data as they lost Internet
connection,” Wetch says, “it just became something in which
they weren’t confident.”
After a year of user-experience research, Fair Trade USA has
fine-tune the software’s user experience. Wetch
rolled out an updated platform featuring an Android application
interacts with cooperatives across Latin America,
that allows managers to capture data offline, ensuring the
and he reiterates the need to graduate from
information will make it into the system even if the connection
pen and paper when recording mission-critical
is dropped. Fair Trade USA reduced hardware costs substantially
information.
by choosing Android over Apple products, Wetch says. Going
“That would be unthinkable for a North
32
Initially, the prevailing feedback from producer liaisons at
a pilot program at Cinco de Junio, a cooperative
by Fair Trade USA.
FAL Coffee’s Santa Izabel farm in Ouro Fino, Sul de Minas, Brazil. | photo by C.S. Sandoval
he says, “so we are working to empower producers with access to
benefit of providing producers with the tools
American company with hundreds of employees,”
forward, the organization will consider subsidizing the cost
continued on page 34
FAL Coffee’s Monte Verde farm in Carmo de Minas, Sul de Minas, Brazil.
photo by C.S. Sandoval
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Bridging the Digital Divide
(continued)
of tablets for co-op managers, but the goal is for cooperatives to be able to cover the
hardware costs on their own.
“At the end of the day, we view it the same way as business in the United States
would function,” Wetch says. “You usually don’t have your clients or your supply
chain partners purchasing your equipment for you. It’s a cost of doing business. So as
connectivity continues to expand around the globe, it’s our goal to keep the cost of the
software low enough so that there is no barrier to entry for co-ops to use this as they
become more connected.”
Connecting Small Roasters
and Smallholders
In stark contrast to stutter steps at origin, roasting companies use reporting platforms
to achieve quality control over every aspect of production. Cropster, a widely used
information management system, allows buyers and roasters to share cupping
profiles, roast curves and pricing information on any given coffee. Ozone Coffee
Roasters, based in New Zealand with shops in London, relies heavily on the software,
particularly when head roaster Paul Newbold is on sourcing trips.
FAL Coffee’s Santa Izabel farm in Ouro Fino, Sul de Minas, Brazil. | photo by C.S. Sandoval
“We use the Cropster dashboard on a daily basis to manage stock, recording detailed
origin, source, supplier and process data on every coffee that enters the roastery,”
Newbold explains, “whether it is a lot for a blend, single-origin offering, or a cupping
sample of a new coffee.”
As a counterpart at origin, Cropster offers large estates and producer organizations
an internal control system designed to organize volume and value data, which the
producer can then convey to potential buyers. The technology gap, however, continues
to pose a problem.
Performing research in Colombia for several years beginning in 2007, Cropster
CEO Norbert Niederhauser worked with many producer organizations to streamline
Two screenshots of Fair Trade USA’s Acopio system, in English (top) and Spanish (bottom).
images courtesy of Fair Trade USA
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production. He, too, saw the disheveled side of coffee accounting in Colombia’s rural
continued on page 36
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Bridging the Digital Divide | Introducing Modern Business Systems at Origin in Latin America
(continued)
“There is confidence the information
take advantage of these solutions. However,
operations, where several weeks’ worth of
individual producers, but the computer work
receipts logged on dirty pieces of paper was
proved unwieldy for many farmers, thus
10 percent of Cropster’s clientele. The
I give is sufficient,” says José Rodriguez, a
should they want to conduct business
focusing on specialty coffee production and sustainable
not uncommon.
overextending promised tech support. The
large majority of its users are buyers
Cinco de Junio member farmer. “There is
in a fashion similar to their buyers, the
company quickly changed its pricing structure
and importers keeping information on
confidence with the buyer we will bring
infrastructure will be there.
agriculture. His blog, Abeja.coffee, studies the
and that farming is not a business,”
to sell the program to producer organizations
microlots and purchases within their own
traceability to the coffee and the buyers
Niederhauser says. “They’re like, ‘Why
for $199 per month.
companies. Niederhauser believes that
chain.”
“They think of themselves as farmers,
would I do that? I produce. I got my land.
That’s what I do.’”
Niederhauser says Cropster originally
wanted to charge $1 per month to
“The idea is to find one person in the co-
Currently, producers comprise about
if more producers adopted Cropster, the
op that has a little technical knowledge, can
reporting platform could play an integral
work with a computer, and help the co-op to
role in overcoming a big hurdle for coffee
get organized,” Niederhauser says.
producers—finding the right buyer.
“It’s not as easy as assumed, getting
Rodriguez believes the program opens a
previously closed line of communication.
“One way or the other, it’s a tool, an
instrument of traceability and transparency,
“In a manner of thinking, a program
JIMMY SHERFEY is a freelance journalist
provenance of good coffee, seeking out strong,
sustainable relationships between producer and roaster.
is a tool,” says Vasquez. “It’s not going to
While his production company organizes consumer-
resolve 100 percent of needs, but if we want
oriented specialty coffee events throughout the state of
[roasters and importers] to buy more, it’s
Florida, he resides in the Audubon Park Garden District
what we need.”
of Orlando, an eco-district teeming with craft beverages,
slow food and diverse plant life. giving feedback from the roasting side of
production organized in a way that
the chain to the producer,” he says. “Also, it
they know what quality they have,”
permits a stratification of quality. Quality,
Niederhauser says.
especially, differs widely in the market.”
This stratification of quality also exists
Leveling the
Playing Field
within producer organizations, and Fair
Trade USA contends that programs such
as Acopio can reflect the performance of
a given coffee back to a member producer
during the harvest, and can open the door
for more individual incentives.
Mayorga sees the collection process at co-
a better level of transparency than was
and, ultimately, to the financial viability
previously possible when it comes to pricing
of the group, which is one reason he was
structures within their own organization,”
so keen on financing the first version of
says Wetch.
Acopio.
“That’s very much a cash flow make-
who attended the Seattle training session,
and when they bring in the coffee, what
is hopeful the program will inject fairness
the payment and quality expectations are.
into the remuneration process. Considering
I think having a system around that is
the amounts deposited from more than
just a phenomenal asset, in that you take
200 producers harvesting simultaneously,
these cooperatives that tend to be pretty far
numbers easily can get lost in the fray.
“It’s going to give them equity,” he
handheld technology out in the field.”
says. “For example, in terms of volume, one
The Cinco de Junio pilot group
producer is not equal to the other, so equity
currently working with Fair Trade USA’s
means giving each producer what they
Acopio welcomes the changes this added
deserve.”
transparency and traceability will bring
Cinco de Junio manager Mary Caldera
to buyer relationships and inventory
recognizes that this level of organization is
management. At a training session in
crucial to a successful business.
Seattle in April, the co-op managers had
“It’s useful to assess the levels of each
their first hands-on experience with the
producer and the cooperative and to show
platform, and the general reaction was
the buyer the profitability of the business,”
positive.
she says. “So it’s better transparency, with
“[Buyers] want the data on the farm,
the weather at the farms,” says Fredman
Vasquez, one of Cinco de Junio’s managers.
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In terms of quantity, Hamilton
Rodriguez, another Cinco de Junio manager
or-break moment for them,” he says, “how
behind on tech and you leapfrog them into
36
“It can provide [cooperatives] with
ops as the key to organizing production
fairer prices, and also motivation for the
producers to continue being members.”
Many of these programs geared toward
“They want to know how the members
origin are in their nascence, but if nothing
are doing, how much they produce, what
else, they are signs that organizations
qualities the farms are producing, how
seeking to empower coffee farmers recognize
the quality will differ from another year.”
the need to engage producer groups with
Acopio, he says, can provide this type of
buyers in a clear, more precise manner. It
information.
is not certain that every cooperative will
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