union direct trade
What do we mean by 'Union Direct Trade' ?
Union Direct Trade is our sourcing principle which creates high quality coffee for us, and sustainable livelihoods for small scale farmers.
We develop long-term, trusting commercial relationships with small-scale producers and their workers.
For the coffee farmer it provides aspiration to grow ever higher quality coffee, aided by regular practical support from us. For you, it produces a delicious cup with ethics.
See how we do it, and why...
There are three key quality characteristics of our Union Direct Trade. We believe our direct sourcing approach improves and impacts across all these elements:
Quality of coffee:
• -100% high quality, high altitude grown coffee
•-Quality Price Incentive: Selection of outstanding coffee, scoring SCAA 84+sensory scale
•-Exemplary Quality: Additional premium earned for cup score SCAA 88+ sensory scale
Quality of life:
•Producer Commitment to Union Code of Conduct for Ethical Sourcing
•Sustainable Baseline Premium: Farm-gate. Co-operative or Estate receives 25% above International Fairtrade minimum price, plus the equivalent Fairtrade social premium.
•Verified Price: Transparency throughout the supply chain Price confirmation received by small scale farmers and workers.
Quality of business:
• Transparency: Transparent financial transactions with all participants in the supply chain
•Buyer commitment: We demonstrate an intent to develop long-term relationships extending to multiyear purchases
• Pro-active involvement: We visit producers 'on the ground' within 12-24 month periods to monitor quality, provide feedback and discuss business goals
• A structural approach: sustainable prices allow producers to plan their future
Key to our sourcing ethos is direct interaction with producer groups enabling them to grow better quality coffee and providing a valuable route to market with trusted partners.
Here, Graciano Cruz, a producer we work with in Panama, explains how he benefits from Union Direct Trade.
Why are not all coffees born equal?
Because the majority of coffee produced in the world is commodity grade; high yield, low price quality irrelevant, for mass market consumption.
We are not interested in this.
We are excited by exceptional quality which is created at the farm. This demands collaboration between farmer and roaster to understand the specific demands of each producer.
Micro-climate, soil type, elevation, sunshine or shade, rainfall and tree varietal creates the "terroir" that produces coffees with distinctive flavours and aromas. Our coffees embody some of the highest qualities produced from each of the origins we source. Through our approach to quality we seek improve the livelihoods of small scale producers.
What is the role of the importer within Union Direct Trade?
In a Union Direct Trade relationship we may use the specialized skills of an importer, depending on the context because they have resource to manage shipping and logistics.
Importers may also provide finance facilities, important to ensure timely payment for producers.
Union Direct Trade price negotiations begin with the farmer or a representative of an organized famer group (cooperative and/or producers organization). Other costs such as the importing costs are negotiated separately. In Union Direct Trade there is complete transparency about every transaction in the value chain, which means that we selectively work with importers willing to provide this facility.
What is the role of the exporter in Union Direct Trade?
Often exporters have an important role in the value chain; they may add value by having regular contact with producers in addition to our own, and support our drive for greater consistency of high quality.
Where a farmer or organized farmers do not have an export license, we spend time with them to carefully select the exporter they wish to work with and the exporter that can offer complete price transparency. Exporters may be required to prepare coffee suitable for export grade quality providing dry mill (hulling) facilities.
This means Union Direct Trade price negotiations begin with the farmer or a representative of an organized famer group (cooperative and/or producers organization). Other costs involved in preparing the coffee for export are negotiated separately.
How do we verify Union Direct Trade?
Union Direct Trade does not involve third party accreditation systems.
An important element of Union Direct Trade is the relationships we obtain with our suppliers. Our people are trained (by external agents) to carry out social audits, which brings several advantages.
Many third party auditors do not have specific knowledge about coffee production and key elements of Union Direct Trade such as transparency and traceability are not included in traditional audits.
Auditors may vary from year to year complicating tracking progress.
Therefore we opt to do audits by our own trained employees.
In addition Union Direct Trade is associated with University of Wageningen, The Netherlands, to identify the impact of our approach to ethical trade on improving livelihoods of small scale farmers. A monitoring and evaluation system was devised to collect data over several years to assess the influence of long-term trading relations.
Who is responsible for Union Direct Trade?
Ultimately our coffee buying is the responsibility of Steven Macatonia PhD. Joint –owner of Union. Steven is a trained Social Auditor.
Union Direct Trade is managed by Pascale Schuit who has an MSc. International Development from Wageningen University, The Netherlands.
Pascale is located at CIAT, in Colombia and spends 70% of the year in Latin America and Africa working with farmers who grow our coffee. Oliver Brown is our Coffee Quality Evangelist and a critical member of the team. Oli visits producers frequently, drives quality improvements and provides feedback to producers throughout the year.
What is speciality coffee?
For the consumer specialty coffee means a delicious cup to enjoy. The coffee is exceptionally clean, sweet and expresses a range of pleasurable flavour attributes.
To craft roasters like us, specialty coffee represents carefully craft roasting each batch and creating the particular roasting profile for each of our coffees to be enjoyed by particular brewing method. We invest a lot of time and effort in sourcing and selecting exemplary coffees.
For other industry professionals (tasters, roasters, suppliers, baristas) specialty coffee is identified by sensory evaluation. Assessment is determined by grading the quality of the coffee by scoring particular physical characteristics and specific organoleptic qualities like nature of aroma, acidity, body, fragrance and aftertaste.
For the exporter it may mean, milling the coffee with specialized hulling equipment. Making sure that all defects are removed and coffee is transported in special packaging to ensure the coffee remains at its peak freshness. Exporters we work with will have regular contact with the farmers about the quality that we require.
For the farmer, they first need to be blessed with excellent soil and climate conditions: altitude should preferably be between 1400 and 1900 m.a.s.l or higher The farmers understand the importance of selecting excellent tasting varieties such as Bourbon, Tipica or Caturra. Unlike farmers that produce for the commodity market, specialty coffee producers have to carefully select the red ripe cherries by hand.
After a long day of picking, normally from 6 in the morning till 3 or 4 in the afternoon there is still more work to be done. . Fresh picked coffee needs to be processed immediately, even if this means working to one O’clock in the morning. Coffee is sorted by the farmer in many stages. After that, the coffee has to be carefully sundried which means turning the wet coffee over every 20 minutes or so to promote drying.
All this implies extra labour costs for the farmer. If the farmer sold their coffee to a commodity grade buyer there would be no need to carefully pick only the ripe cherries. This would mean workers could pick faster and greater volume. The coffee would not need to be separated into high quality , (so less labour and more coffee to sell).
Often the commodity market also accepts varieties that are less likely to give an exemplary cupping profile but are disease resistant. So, by cultivating specialty coffee varieties, the producers have a greater risk of crop loss and need to put more effort in pest and disease management. Therefore, the cultivation of specialty coffee deserves a sustainable price. Through Union Direct Trade we engage regularly with all contributors in the supply chain including farmers allowing us to jointly determine a price that is beneficial and sustainable for all participants in the chain.
What is the difference between Fairtrade and Union Direct Trade?
Fairtrade is a third party accreditation system. It includes important components of sustainable trade such as pre-finance and a guaranteed minimum price.
There is a lack of connection to quality in Fairtrade.
With Union Direct Trade we go beyond Fairtrade to provide, in our view premiums anchored around true coffee quality and pricing.
Sourcing only 100% Fairtrade coffee would pose constraints to our green coffee buying. We are always looking for extraordinary coffees, such as micro-lots and Cup of Excellence coffees and often these are not certified. In addition, Fairtrade is limited to organized producer co-operatives which would exclude our opportunity to buy exquisite estate coffees.
We increase the elements of a guaranteed minimum price and pre-finance but extend this by specifying with our suppliers contract terms.
F.O.B or F.O.T (shipping terms defining the nature of the purchase contract -“Free on Board” or “Free on Truck”) price provides a sustainable price (farmgate) to the farmer.
Union Direct Trade is based on transparency, traceability, mutual understanding and trust. We prefer collaborative problem solving instead of taking a certified non/certified approach.
Union Direct Trade is about introducing structural stability within farmer associations so they make their own decisions about their organization and where to spend their increased income. We do not impose social programmes or project-related activities.
Our approach is not to rely solely on certification, but to pay sustainable prices that meet the cost of production and allow investment. We establish a link with cup quality and coffee value through paying an additional incentive premium to motivate farmers towards greater achievements. We believe this is the most effective way to expand economic opportunity and for smallholders to escape the commodity market by producing coffee with intrinsic value.
We set up minimum purchasing commitments with farms so they can sustainably plan for their next harvest. We support forward financing, critical for small scale farmers,- either directly or through underwriting specialized per-finance agencies for those most in need. We developed Union Direct Trade because we wanted to extend beyond Fairtrade and clearly demonstrate our commitment to ethically traded high quality specialty coffee.
Are all our coffees Union Direct Trade?
introducing our Guest Coffees
Greater than 90% of our coffees are sourced through Union Direct Trade, but we’ve developed our sourcing outside these parameters to discover and enjoy outstanding new coffees.
These Guest Coffees are identified by working directly with industry bodies (e.g. Cup of Excellence) and other supply-chain participants (private farms, other co-operative or specialist exporter).
The provenance and traceability of these coffees is verified, as well as the price paid to producer but these may not be established long-term relationships or committed to our Union Code of Conduct. However, these guests allow us access exquisite, occasional lots and give the opportunity to get to know new coffees which may reveal their potential to become a Union Direct Trade coffee.
What does membership of the Ethical Trading Initiative imply?
The Ethical trading Initiative (ETI) stands for respect for workers worldwide. It is an alliance of companies, trade unions and voluntary organizations. Our membership implies that we are committed to improving the working conditions of the people who grow the coffee we buy. This includes co-operative members, individual small scale farmers and day labourers. Together with the ETI we define best practice and try to drive positive changes to workers' lives. We strongly believe that transparency, the relationship with our suppliers and fair prices enable farmers to invest in themselves and their workers. Within Union Direct Trade we monitor and evaluate the progress our suppliers make.
For more information please visit the ETI website. Union Code of Conduct can be found here.
What is Union Hand Roasted Coffee minimum guaranteed price?
Coffee is traded on the world market as a commodity. The world market price for coffee is very volatile, and has dropped as low as USD$ 0.50 cents per pound of green coffee in the past.
We buy specialty coffee, not commodity grade. Farmers take special care of the way they produce and process the coffee we buy.
Our minimum guaranteed floor price is based on the price defined by Fairtrade of $1.40/lb. However, we pay an additional +25% (USD$0.35/lb.) because we recognize the extra effort it takes to produce specialty coffee.
In “What is Specialty Coffee” you can read a little more on why specialty coffee implies extra costs for all participants in the chain. Therefore Union Sustainable minimum price is USD$1.75. In addition, farmers can receive further premiums for producing high quality or additional social or environmental premiums. Prices for micro lots or Cup of Excellence coffees can be as high as USD $20/lb.
What is a micro lot?
Every roaster has their own definition of a microlot,
For us, a micro lot is a very special coffee, cupping 88+ on the Specialty Coffees Association sensory evaluation assessment.
These are unique coffees because of the exceptional geographical and topographical conditions they were cultivated under. The farmer carefully selects particular varieties, grows these coffees under the best conditions possible and process them to create the wonderful flavours in the cup. Micro lots are exclusive and rare; which means they are considered as gems with particularly pleasurable cupping profiles.
Coffees from the Cup of Excellence are an example of micro lots. A micro lot can also be a small part of the harvest of a particular farmer. This coffee may be grown, on a particular slope or plot on the farm where soil conditions are perfect and the sun provides slow and perfect development of the bean.
What is Cup of Excellence (CoE)?
The Cup of Excellence is an annual competition held in several coffee producing countries to identify the best high quality coffees in that particular country.
It is organized by the Alliance for Coffee Excellence. The coffees are selected by extensive cupping by a panel of international judges. The finalist are awarded the Cup of Excellence status and sold via an internet auction to roasters offering the highest bids.
The award winning farmers, receives not only a price much higher than he would normally get but he also receives national and international recognition for his dedication and hard work to produce such a rare and exemplary coffee. As the names of these producers travel all over the world, the producer may increase his chances of finding a fixed buyer for his coffee leading to more financial stability.