Relationship Coffee

The University of Sydney in cooperation with the Indonesian Coffee and Cocoa Research Institute will conduct a three year Action Impact Study in Sumatra. This study focuses on the impact relationship coffee business models have on the farmers, their families and the villages or communities where they live.

Lisa & Leo’s Organic and the Tiga Raja Collective were selected to participate for North Sumatra. The study began in January 2016 and runs for a full three years. After creating a region and farmer specific survey with the project managers from ICCRI and Sydney Uni, a team of volunteer students were chosen and conducted the initial survey. The data is confidential until the end of the three year period, however there were 200 farmers selected for the survey; 100 that supply us and 100 that don’t. Organizing and recording this data is the easy part, collecting the data was a challenging and enlightening undertaking. p>

What is Relationship Coffee?

The business model L&L Organic chose to follow for our company was established by Sustainable Harvest in the U.S. They developed a model that is worthy of high praise. The principles are as follows per Sustainable Harvest:

Sustainable Harvest’s inclusive business model is called Relationship Coffee™.
While many companies today operate on a series of short-term, profit-driven decisions, Relationship Coffee transforms the way business is done by building long-term relationships based on transparency and trust. We create market access and traceable supply chains for smallholder farmers, and involve our suppliers in negotiations with the final buyer, helping the farmers become empowered, informed actors in the coffee supply chain. By shifting the paradigm from closed, one-off transactions to an open and collaborative supply chain, we have seen Relationship Coffee strengthen the specialty coffee industry and help all stakeholders thrive in their businesses.

Why L&L Organic Supports Relationship Coffee

In our small corner of the world, Simalungun, North Sumatra, we wanted to make a difference. We are passionate about our work here and knew we were in a unique position to establish the relationship coffee business model. After a couple of unsuccessful attempts with market access partners, we have had success. Starting in 2015, farmers received a profit share of the export contracts for the coffee they grew. It is a huge motivator for everyone in the region to know their extra efforts are compensated. We hope to see this business model duplicated by other small exporters like us.

Transparent = Sustainable

The only way this business model can survive and become sustainable is with real transparency. From the parchment or cherry prices to overheads and profit margins, fair for everyone in the supply chain means sustainable for everyone. Certainly, this has been a very difficult concept to put into practice. The Sydney University study will help us measure the real impact on the people we want to benefit from this business model and also help everyone involved realize the potential impact for the future of the Simalungun region.