I want to explain a process that you all have questions about and is super important to your offerings: the timeline of getting Ethiopian coffee from the tree to your roastery.
The prevailing expectation is that since harvest begins in October and ends from December-January, cupping/selections happen in February and March is shipment month. This schedule is based on buyers' experience of the former auction system. It does not reflect the way the current auction system works for mixed containers.
In the old system, coffee was sent to a centralized warehouse and then purchased in Addis. This meant that a coffee purchased in the morning was delivered to the buyer's facility the same day.
When the new ECX system was implemented, the decision was made to place warehouses in 7 locations across the country that make up the geographic regions that coffees are now sold as (e.g. Yirgacheffe, Sidama, Limmu, etc.). So now, when a lot is purchased, it has to travel from the countryside to Addis after the regulated inspections are made and paperwork is in order. This process takes, on average, 10 days.
By the time the coffee arrives in Addis, it has not yet been evaluated by the buyer. In fact, one can only make a quality claim while the coffee is still at its original warehouse. Basically the process makes it impossible to make quality claims because: 1. you have to pay a non-refundable fee of $150 to have your coffee inspected, 2. you have to have a staff member be there to do the inspection, 3. you have to pay your driver's expenses while any claim is made and the resulting appeal is followed up. And of course, the coffee isn't going anywhere and can't be offered to any customers while this process is unfolding.
Let's assume a lot has been purchased on February 1 (e.g. Kochere gr. 1) and it proceeds to Addis without incident:
February 1: Kochere gr. 1 is purchased (it's a full container lot, so 300 bags) February 8: Inspections and paperwork are completed February 10: Kochere arrives at warehouse in Addis February 11: Kochere is first cupped and evaluated by the buyer February 12: sample is sent out to a potential client (e.g. CCS) February 17: sample arrives at CCS' lab for evaluation February 18: sample is roasted February 20: sample is cupped and let's assume, approved February 21: lot goes into the queue for mechanical and hand sorting at the exporter's facility February 28: it's ready for export March 1: earliest possible departure date from exporter to CLU for final inspection before export March 4: container is approved for export by CLU March 5: departure from Addis to Djibouti March 10: container arrives to Djibouti port March 15: container departs from port April 15: container arrives at Antwerp/New Jersey port April 22: container is stripped at Pacorini/Continental warehouse April 24: earliest possible loading to you the roaster
The above timeline is based on the following assumptions: 1. absolutely every step occurs without incident 2. only one lot is within the container
In reality, we purchase containers that are made up of at least 2 different lots (usually it's more like ±5) so that we're able to offer a good variety to our roasters. So each of these lots have to go through the above process and then approved by us for purchase. Getting 5 lots coming from different warehouses with the exact cup characteristics that we like and then getting them machine and hand sorted for export makes March export, well, pretty challenging, to put things lightly. And all the above also assumes that the export facility is functioning at top efficiency and capacity.
Last week the electricity went out on Wednesday at Moplaco and wasn't functioning again until Friday afternoon. Not only was production halted, but a staff member had to take the time to follow up vigilantly with the utilities company to ensure that someone was actually addressing this situation. Heleanna estimates that an entire container's production was halted due to these three days of the electricity cut.
Over the weekend, I had the pleasure of celebrating Ethiopian Easter with Heleanna, her friends and family. One of the people I met on Sunday works for an Italian development agency and another works as an IT consultant for the World Bank. Both of them work with a variety of commodities and have years of experience working not only in Ethiopia but around the world on development projects.
I explained some of the challenges that I've noticed about the export process for coffee and asked for their perspective as to why it's so labyrinthine and challenging. They had some common answers: - small business doesn't matter to policymakers, so there is very little will to make the export process more efficient and transparent, even while government officials totally acknowledge the challenges that exporters face. This is also taking into account that coffee export makes up 31% of export revenues for the country - the current auction system is a mess and failure but there are so many parties with vested interests and so many people employed by the current system that a dissembling of the structure is simply not going to happen. The question now is how and whether the structure will be improved - there's no cultural value for transparency and accountability in bureaucratic processes
It's not all dismal. The Ethiopia of today is completely different from the Ethiopia of five years ago. Addis is a vibrant and developing city with a metro line, a fantastic food scene, commercial centres and hotels cropping up everywhere, and a thriving arts and music scene. As the World Bank consultant put it: Ethiopia is where Central America was 10 years ago. As I mentioned in an earlier newsletter, receiving coffee from our Central American partners is much more smooth and efficient than it is getting coffee from East Africa. This consultant believes that Ethiopian policies and business culture are heading in a similar positive direction.