It’s time to wrap up 2010 and say hello to 2011. As we do this, we’ll take a moment to reflect on 2010… and to look forward to 2011.
Our first year has fortunately been a success. From our launch at Tertulia 2010 at SCAA in Anaheim through the end of December, we’ve been able to accomplish what we set out to do: find efficiencies in the export/import process while establishing a transparent connection between growers and roasters, creating value for all those involved.
However, we faced a number of challenges in 2010:
- Lower than expected coffee volume in the first and second semester harvests, due to a wild climate and to roya and broca infestations
- A rising and volatile C market
- The challenges of buying quality coffee in a rising market
- Increased value of the Colombian Peso to the US Dollar.
Despite these challenges, we’ve been able to establish new partnerships between North American buyers and Colombian and Ecuadorean growers. A number of customers traveled with us during the year, visiting established relationships, or starting to develop new ones. And learning about the intricate process and commitment to quality of the Virmax buying model. We encourage all of you who couldn’t make it down to Colombia last year to travel down this year. Don’t forget that the WBC this year will be held in Bogota from June 2-5!
View from the top of Finca Cerro Azul (Trujillo, Valle del Cauca), at 1950 m.a.s.l.
Looking Forward…
We start 2011 with a bang! Our Finca San Luis Organic this past weekend was selected as one of the Good Food Awards Coffee Finalists!
I’m back in Colombia visiting some of our producers to see how the upcoming 1st Semester harvest is looking. From what I’ve seen already in central Cauca, some growers will not be producing any coffee as they preferred to plant new trees or prune their existing ones to avoid having to deal with coffee leaf rust. Others will be having a harvest, but they won’t have the usual volume as the flowering was not optimal due to heavy rains during the 2nd half of 2010. In east Cauca, Huila and Tolima the weather leading to the 1st semester harvest has been more favorable and therefore growers are expecting good volumes and an earlier start of the crop.
It’s too early to say how the 2nd semester harvest will be. As I write these lines, growers in several regions are telling us that coffee trees have been flowering these days. So if weather permits it, the 2nd semester harvest will start earlier than usual. But we’ll have to wait until May/June to see how volumes will look like then.
Most analysts predict prices to remain at current levels or above due to fundamental issues such as the predicted deficit in world coffee production vs demand and the increased influence of funds and other financial players in the market. This environment will pose great challenges both on the producer and the roaster sides. For us the challenge will lie mainly in the following three situations:
- In order to entice growers to deliver their coffee to us and subject their lot to our rigorous quality control process, we must offer a quality bonus versus the market price sufficient for them to decide that it is worth their extra time and effort.
- Growers’ loyalty to the Relationship model and their long time customers will be tested as the temptation to sell to less demanding buyers at a better price than they achieved last year for their best product, sets in. Mediocrity could have its way in these conditions.
- The rising market and increased volatility is creating a difficult and risky environment for us to write forward contracts well ahead of time. These contracts after all allow us to work with our grower partners to commit the necessary volumes and qualities.
Throughout the year we will work with our grower partners and with you in order to proactively find solutions that are beneficial to the whole chain. We will continue to monitor the market, growing conditions, harvest forecasts, etc… and keep you informed of how this situation is evolving.
We’re looking forward to be able to catch up with all of you at:
- Coffee Fest in Chicago in February;
- The SCAA in Houston in April, and seeing as many of our customers as we can fit in the waking day
- The World Barista Championship in Bogota in June, where we will be hosting our Tertulia 2011. We are planning a few origin excursions as well as plenty of cuppings and maybe a party or two.
In 2011 we are also studying the expansion of our coffee sourcing into other regions in Colombia, as well as other producing countries, with potential leads in Guatemala, Bolivia and Peru. If this is something you are interested in or have an opinion about, please let us know.
Geisha flowers at Finca Cerro Azul
And, of course, we are looking forward to a full year of importing and distribution with increased volumes but with the same attention to detail and dedicated customer service.
We aim to become your import / origin partner by working with you to help you reach your goals. We would love to hear from you: Where can we improve in 2011? How can we expand our partnership with you? What would you like to see us do in 2011?
As always, we welcome your comments and suggestions and wish you a prosperous and healthy 2011.
