Throughout the past few weeks, I have had the opportunity to explore the sourcing step of the supply chain as it relates to the operations of coffee plantations. The sourcing step of the supply chain concerns how an entity sources its raw materials, labor, contracted, services, and research, as well as how the entity is able to act as a source to other entities for the aforementioned topics. In this reflection, I will be exploring sourcing’s role in a coffee plantation’s supply chain from the farm, to the processing mills/exporters, to the coffee roasters and retail stores, and, finally, to the customer.
On our site visit to Doka, we learned all about the work that goes into sourcing the labor and resources on the farm. The coffee-picking process is physically straining, with low compensation for the work. Because of this, it is very rare for Ticos themselves to work on the coffee plantations. Instead, Doka–like most coffee plantations in Costa Rica–outsources its labor from Nicaragua, as the compensation that the workers receive in Costa Rica is still better than what they would have received in Nicaragua. In addition, we learned about the necessary growing conditions to source the raw materials. High altitude is needed to grow high quality coffee, however, with high altitude comes humidity, and thus higher susceptibility to diseases. Because of this, many plantations resort to pesticides as a method of preventing diseases. This then creates the problem for coffee plantations of figuring out how to ensure high quality coffee without increasing the risk of exposing consumers to the harmful toxins from the pesticides.
We learned a lot about sourcing in the next step of the supply chain: processing and exporting. In particular, we learned that the pandemic created many obstacles for companies during this step. Coffee plantations dealt with a shortage of shipping containers, causing them to have to wait longer before they could export their product to other countries–particularly the USA. This greatly affected Doka’s ability to act as a source to customers in the USA. In addition, Doka faced challenges regarding its ability to source its packaging. It originally sourced its packaging from Chile, however, the pandemic made it difficult to continue doing this, so they instead had to turn to local suppliers. We also learned about how Cafe Britt acts as a source to other entities. In particular, we learned that Cafe Britt acts as a source to Chile for products like coffee and chocolate, as coffee and chocolate of such a high quality are difficult to find in Chile. Finally, we learned a lot about the research aspect of sourcing during our visit to Cafe Britt. Cafe Britt’s planning and distribution center conducts research to determine what they should focus on selling for the next 6 months. The product is then packaged and shipped, and arrives at the distribution center in Miami, USA two months later.
Next, we learned about sourcing as it relates to coffee roasters and retail stores. We learned a lot about how Doka acts as a source for coffee beans to retail stores, with Starbucks being Doka’s number one customer. Similarly, Cafe Britt acts as a source to hotel chains such as Marriott and Hyatt; it was explained that this was seen as a great opportunity for growth, because, since these are chains, it makes it a more seamless process to get started with new businesses in new countries. Lastly, Cafe Britt discussed how research plays a role in their sourcing process. Cafe Britt conducts research on how to advertise their coffee to various target markets. For example, they found that younger generations would be interested in a new, unique way to drink coffee, which led them to put a lot of emphasis on their at-home espresso.
Ultimately, none of the other aspects of the supply chain would be possible without the final step: the customers. The customers, although at the bottom of the supply chain, are the ones who ultimately determine how all of the aforementioned decisions in the sourcing process are made. The treatment of the raw materials is based on what would taste best to customers, the decisions made in regards to export are based on customers’ demand, and the retail stores to which the coffee is sent would not be possible without customers.