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10 tips for doing business with European coffee buyers

Takes 15 minutes to read

Europe has the world’s largest and most competitive coffee market. If you want to do business in Europe successfully, you will need a clear picture of the international supply chain, specific European requirements and national market trends. Use the following tips as guidelines on how to do business with European buyers. If you are already doing business in Europe, these tips can help improve your relationship with buyers. If you are new to the market in Europe, these tips will prepare you for your first ventures.

Complying with legal requirements means meeting mandatory European legislation and food safety demands. If you are unable to comply with these requirements, you will not be allowed access to the European market.

Buyers normally expect you to have food quality and safety management systems implemented to demonstrate your ability to control food safety hazards and ensure that your coffee is safe for roasting and for human consumption. Having certifications which show the implementation of these processes will tell your buyers that you are a reliable supplier, concerned with quality control.

Tips:

  • Read our study on legal requirements in the European coffee market, which offers an overview of the requirements for coffee exports to Europe.
  • See also the EU Trade Helpdesk for more information about the requirements for exporting coffee to Europe.

2. Understand traceability and social responsibility aspects in your chain

Many buyers in Europe are looking for coffee with a socially and environmentally responsible production background. As such, buyers will commonly expect you to meet additional requirements, which involve around corporate social responsibility and traceability. A traceability system is a good way of providing information about the origins of your products to all the parties in the supply chain. It offers reassurance to buyers about what they are purchasing.

In addition, buyers in both mainstream and niche segments may expect you to have certifications that show your commitment to social and environmental responsibility. Certifications also help buyers control risks in their value chain. Be aware that different organisations offer different certificates and focus on different issues. They tend to follow different consumer trends and market segments in specific countries.

Smaller buyers focused on high quality, mostly specialty roasters, tend to be less interested in certification. They have stronger emphasis on direct contact with coffee farmers and want to know all details about coffee production and the value chain, often combined with information on the coffee-growing area.

Tips:

3. Have complete information on your product offer

Buyers in Europe will expect you to have complete product specification sheets available, with up-to-date and reliable information about your product, farms and/or the coffee farmers. You should have these data available for the previous 3-5 years and work out a prediction for the 2-3 years to come.

Your product specification sheet needs to include detailed information for each type of coffee you sell:

  • Coffee variety
  • Characteristics and figures of the producing region, including its agro-climatic context
  • The size of the farm or farms, in case of private estate
  • The number of farmers and their family members, in case of a cooperative
  • Amount of coffee you produce annually (availability)
  • Characteristics of the post-harvest protocols
  • Certification
  • Optional: spider diagram of cupping profile (for instance from Tastify)

Tip:

  • Always be transparent and honest. Be clear and open about your own track record, your supply capacities and the quality of your coffees.

4. Find the right moment to sell your product

The price paid for coffee depends on the futures markets, unless you have a highly exclusive specialty coffee. The prices for less exclusive specialty coffees are usually also linked to the prices paid on the futures markets, plus a premium. The two most relevant futures markets are New York (for Arabica) and London (Robusta). Export sales prices are always in US dollars.

Getting the right price for your coffee has much to do with timing, which means you need to closely follow these futures markets. Note that your buyers will do the same. They will try to agree on a price for a coffee contract when they see low prices. They might also want to try to agree on contracts for future deliveries. This means fixing a price and volumes with you when the price and timing are favourable for the buyer, but one or two years in advance of delivery. Agreeing on contracts for future deliveries is only recommended if you are a big exporter in a large producing country like Brazil. For smaller-scale exporters and exporters from less prominent producing countries, the risks of futures contracts might be very high.

In a reaction to low market prices for coffee, there is a growing trend where buyers and coffee farmers negotiate prices independently of the futures market. Have a look at the Specialty Coffee Transaction Guide, where you can see numerous anonymous contracts to get an idea on how much was paid for which type and quality of coffee. Remember that labour costs are different across countries, making direct comparisons tricky.

Tips:

  • Watch the New York futures markets closely at Nasdaq: Coffee, or check the daily market information of European coffee trader EFICO.
  • Check to see if your national coffee association publishes daily or weekly market updates. This can be helpful information to help you sell your coffee for the best price and at the right time. Examples of associations that do so include Anacafé (Guatemala), Uganda Coffee Board and the Colombian Coffee Growers Federation.
  • Learn about the futures markets from the International Trade Centre Coffee Guide or read this article from Perfect Daily Grind on how coffee is bought and sold. The Intercontinental Exchange website also offers information on futures and options for coffee.
  • Calculate your production costs, your additional costs and think about the margin you want to make. Knowing this gives you a better idea of the minimum price for which you want to sell your green coffee.
  • Try to find clients that do not pay according to the New York market price. For this you will have to present quality, traceability and excellent marketing skills.
  • Remember that exchange rates fluctuate, which may have an effect on the price you get. You can cover this risk by including a clause on currency risk in your contracts.

5. Send samples to interested buyers

Offer interested buyers a sample of your product. Samples give potential buyers the opportunity to approve the coffee beans and make sure they match their quality requirements before committing to a purchase. If a buyer is interested in a sample, make sure to agree on when to send what kind of samples, including quantities, packaging, labelling and accompanying documentation.

Accompanying documentation is also important. Samples are often sent together with a factsheet providing information such as variety, altitude, soils, rainfall, location, annual production by grade or type of coffee, harvest and marketing season, labour practices, processing system, anti-pollution measures, warehousing, dry processing, distance to port and shipping options.

When you send a sample, make sure it is a true representation of the coffee you will be selling the client. Buyers will assess both the physical and sensory quality. If you cannot match any particular aspect of the sample quality, tell your buyer as soon as possible. Always be honest and transparent about your samples and the quality of your coffee deliveries. If you are not, you risk losing the trust of your potential buyer.

Tips:

  • First verify whether a buyer is interested in receiving a sample. Do not send roasted coffee beans.
  • Samples usually consist of 300 grams of green coffee beans. Ideally these are vacuum-packed, but you can also pack them in zipped plastic bags. Use an attractive sticker with an accurate and adequate description of the coffee.
  • Make sure the pre-shipment sample is representative of the coffee shipped in the container. A lower quality of coffee on delivery compared to what was sent in the sample is one of the main complaints by buyers. In this respect, make sure your logistical partner knows how to handle your green coffee container and allows for quick delivery, as to mitigate risk of diminishing quality during transport.
  • Read the ITC coffee guide for more information about sampling and/or read Perfect Daily Grind’s coffee buyer’s glossary on the different type of samples that exist.
  • See the ISO Standards catalogue for information about standards for green coffee sampling.

6. Respect your contractual agreements

The coffee market is volatile, operating under market conditions and prices that may vary a lot over the year. If you want to establish long-standing and reliable relationships with your buyers, it is very important to respect your contractual obligations, regardless of the market changes.

Most European importers buy their coffee under the terms of a European Standard Contract for Coffee (ESCC). If you honour your agreements and deliver according to the terms of you contract, your buyers are more likely to turn into loyal customers.

Tips:

  • Before signing a contract, make sure to research your buyer’s reputation. A way to do so is by simply googling them to see if any negative news comes up. You could also ask them for bank references if you doubt their reputation.
  • Do not default on a contract to deliver the goods to a different buyer offering a better price. This can have a great impact on your reputation as an exporter and will jeopardise future business opportunities.
  • Refer to our tips on organising your export to read more about how to draft a contract.
  • If you export large quantities, consider hedging your coffee to protect yourself from risks due to market price fluctuations and avoid defaulting on contracts. Hedging is a trading operation that allows a trader to turn a less acceptable risk into a more acceptable one. Read more about what hedging is and how it may impact you as a coffee producer on this article from Perfect Daily Grind.
  • Refer to the ITC’s Coffee Guide; Hedging and other operations to learn more about risk management strategies.
  • If you do get a (legitimate) claim, honour the claim and give your client a credit note on his next purchase, so as to keep him in your portfolio of clients. 

7. Ensure proper packaging and transport

Green coffee is sensitive to moisture and can also absorb external flavour and aroma, causing it to lose its own. As such, proper packaging, storage and transportation is crucial. Always consult with your buyer about specific packaging and transport requirements.

Green coffee is traditionally shipped in woven bags made from natural fibres, such as jute or burlap. These bags typically hold 60 or 70 kilogrammes of green coffee. However, jute and burlap bags do not protect against moisture. As such, plastic big bags and plastic container liners are increasingly used, although they may still let some moisture in. These plastic bags range in size from 60 kilogrammes to full container-sized bags of 20 tonnes.

You also have high-barrier packaging (in all sizes, including container-size). This type of material keeps out both oxygen and moisture. Although there is no standard for ideal moisture content, the International Coffee Organisation recommends that coffee should not have a moisture content below 8% or in excess of 12.5%. Exceptions to this are specialty coffees with a high moisture content, such as Indian Monsooned coffees. Materials such as Grainpro or other innovative material like Videplast bags are often used to pack specialty coffees inside jute bags. The most exclusive specialty coffees are often vacuum-packed to preserve the green coffee quality.

Tips:

  • Choose the packaging in consultation with your buyers.
  • Be aware of the risks involved in storage and transportation, such as damage from condensation, taint and infestation. As such, pack and transport your coffee beans in ventilated containers at the correct temperature and humidity. Read this article on Perfect Daily Grind to learn more about how packaging material impacts green coffee quality over time.
  • Check the Transport Information Service of the German Insurance Association: they have useful tips about the packaging and transportation of coffee. Also check the Cargo Handbook to read more about proper packaging.
  • Check storage and transportation regulations for organic coffee beans. Organic coffee beans must be completely separated from conventional coffee beans to avoid cross-contamination. Read our study on buyer requirements for more information about organic certification.

8. Communicate honestly and openly and be aware of cultural differences

European buyers appreciate suppliers’ reliability, transparency and good communication. Good communication means involving your buyers in your considerations and providing them with clear and prompt information, especially regarding price, contract, quality and transportation. Poor communication can seriously jeopardise your business.

Transparency means developing an open relationship to jointly share, discuss and address risks appropriately. In all cases, keep your promises, be punctual and recognise the value of a contract. In your communication, also be aware of the differences in business cultures. Cultural awareness is key for success as an exporter.

Tips:

  • Be aware of the cultural differences in Europe and communicate with your buyer accordingly.
  • Answer emails within one or two days.
  • The international business language is English. However, coffee buyers commonly speak Spanish and French as well. Make sure to ask before you address them in your native language. In case you do not find a common language to communicate in, consider hiring an interpreter or translator. This will help you avoid miscommunications.
  • Make sure you contact your buyer periodically to discuss issues, and not only when problems arise. When a problem occurs, tell your buyer immediately. The buyer may be able to assist you in finding a solution.
  • Give your buyers regular information and forecasts about the coffee in your specific area, for example, by sending a newsletter four times a year.
  • Contact exporters from your own country and perhaps from other producing countries, and exchange experiences about doing business with European buyers. Learn from them and get some tips on DOs and DON’Ts when exporting to Europe.
  • Read more about the business cultures in Europe, and adopt a few of these tips when communicating with a (potential) buyer. Passport to Trade 2.0 also provides a good overview of differences in business culture in Europe. An example is that North European buyers are often straightforward and will tell you what they think, whereas Southern European buyers tend to be less direct.

9. Prepare well fo a farm visit from (potential) buyers

Buyers of specialty coffee increasingly prefer to visit farmer communities and coffee plantations they work with. They are usually eager to invest in social relationships with farmer communities, to discuss post-harvesting techniques, and/or to find new interesting sourcing destinations and unique coffees. These visits will eventually strengthen your relationship with them, which lowers the business risks for both you and the buyer.

Once you have an incoming buyer visiting your producing region, draw up a clear agenda and visit programme, containing specific locations and time blocks. Consult the buyer on what they would like to see and experience, and design the program accordingly. Include aspects such as nursery/seedlings, production, farming communities, cooperative staff, post-harvest and warehousing infrastructure, and other elements the buyer may be interested in, such as joint cupping sessions.

Tips:

  • Before allowing or inviting a buyer to visit, assess your production volumes and qualities, and see when the best time for a visit would be.
  • If you are part of a cooperative, designate buyers to their ‘own’ farmers. This will improve consistency in product quality and help nurture a positive business relationship between all parties.
  • Have the main figures and facts of your coffee production and practices at hand. Buyers will ask you questions about this. As traceability is increasingly important on the European market, demonstrate knowledge and control of your value chain to your potential buyer.
  • Offer buyers samples of micro lots they can test themselves. Offer each potential buyer a slightly different product, adapted to their requirements and particularities.
  • Be ready to negotiate pricing if the interest in a trade deal is mutual.
  • Communicate clearly, quickly, personally and regularly.
  • Be ambitious and show commitment by responding quickly to questions after the visit and by delivering on your promises.
  • Access our finding buyers study to read more on how and where you can find European buyers for your green coffee beans.

10. Follow-up, follow-up, follow-up

Following up is a crucial element for any business. It helps you strengthen your relationship with a (potential) buyer and may provide you with successful sales opportunities. Also, good communication and follow-up provides you with a competitive advantage, as it shows you are a professional and reliable client to work with.

Tips:

  • After a visit to a buyer’s office or a meeting at the trade fair, mail the (potential) client with a thank you for his or her time, adding some points of your conversation with the importer.
  • After a shipment has been received, provide after-sales service by asking if the product was received well and if there have been any responses from the importer’s clients regarding your product.
  • Inform your (potential) clients of any newsworthy fact regarding your operations, whether it is new machinery, new staff, a General Assembly, or certification changes. A periodic newsletter is a good idea. Even if they may not read it, they will see that you periodically update your clients, which is a testimony of a professional supplier.
  • Ask what the cupping results were of the sample you left at the fair. If you do not get an answer, continue to ask for it until the buyer cups it and gives you a response. It is okay to insist in a polite way on feedback about your coffee.

This study has been carried out on behalf of CBI by ProFound – Advisers In Development.

Please review our market information disclaimer.

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