Lot Traceability and Quality Differentiation

Presented by Carl CervoneTechnoServe EthiopiaEmail: ccervone@tns.org

IN ETHIOPIA, LOT TRACEABILITY BEGINS AT THE WET MILL (FOR WASHED COFFEE)

Exhibit A: No lot separation

-Parchment stored in piles / LIFO system

-Benefits: low cost / easy to manage

-Drawbacks: no quality differentiation, risk of theft, no tracking of ratios during the season

Exhibit B: Simple lot separation

-Parchment stored in labeled bags / FIFO system

-Benefits: quality can be differentiated, reduced risk of theft, ability to track ratios during the season

-Drawbacks: higher cost / more difficult to manage

“LOT SEPARATION” SHOULD BE PRACTICAL FOR THE PRODUCER

Metric Unit Small Med Large

Avg outputnumber of trucks (150 bags parchment) per coffee harvest

<3 3-10 10+

Avg outputnumber of bags parchment (60kg) per coffee harvest

<450450 to 1050

1050+

Standard lot size

bags parchment (60kg) 75 150 450

Standard lot size

minimum export bags green (60kg), milled to zero defects and screen size 15-18

50 100 300

Standard lot size

number of lots per shipping container (300 bags green)

6 3 1

Avg output number of lots per coffee harvest <6 3-10 3+

Should aim for at least 3 different lots and up to 10… of high grades only!

THIS “LOT SEPARATION” METHOD MEANS THAT SOME LOTS WILL BE FILLED VERY QUICKLY AND OTHERS WILL TAKE LONGER

Week of harvest

Lot 1

Lot 2

Lot 3

Lot 4

Lot 5

Lot 6

Lot 7Lot 8

Lot 9

Lot 10(Low Grades)

THEN COMES THE CUPPING / QUALITY EVALUATION OF EACH LOT

Week of harvest

Lot 1

Lot 2

Lot 3

Lot 4

Lot 5

Lot 6

Lot 7Lot 8

Lot 9

Lot 10(Low Grades)

82

Thin, insect-

damage86

Clean, bright

88

Clean, bright, floral

89

Clean, bright, floral 80

Sour, ferment, baggy

90

Wow!! Taste of Harvest

88

Clean, bright, fruity

87

Clean, good body

84

Fruity, some

over-ripe

n/a

Yuck!

FINALLY, YOU CAN MAKE MARKETING / BLENDING DECISIONS

Week of harvest

Lot 1

Lot 2

Lot 3

Lot 4

Lot 5

Lot 6

Lot 7Lot 8

Lot 9

Lot 10(Low Grades)

82

3rd Blend

86

2nd Blend

88

Top Blend

89

Top Blend

80

3rd Blend

90

DST or special buyer

88

Top Blend

87

2nd Blend

84

3rd Blend

n/a

Local Market

OFTEN TIMES, THE EXTRA EFFORT WILL RESULT IN ADDED VALUE

Base price(all coffee blended together)

Top lot (10%)

Top blend (30%)

2nd blend (20%)

3rd blend (30%)

New avg price

EVEN WITHOUT A HIGHER AVERAGE PRICE, THERE ARE OTHER BENEFITS OF LOT SEPARATION

Quality problems can be identified and hopefully rectified in the future, e.g., first pickings usually have a lower ratio and poor cup profile, so cherry price should be lower

You can prevent theft – ensures coffee is weighed / quantified in storage, and missing coffee can be spotted from open bags

Monitoring ratios and qualities during the season will give you a much better understanding of the interaction of natural and operational (man-made) variables, allowing you to better manage your business

FIFO (First In, First Out) system is generally a better warehouse management system (than Last In, First Out – LIFO), since it ensures more consistent freshness / moisture content / quality levels

IT IS IMPORTANT TO FIND AN ECONOMICAL BALANCE BETWEEN QUALITY DIFFERENTIATION AND COST-EFFICIENCY

Cost-efficiency

Quality differentiation

Coops in prime high

altitude growing

areas

Big traders of unwashed

Djimma 5 types

THANK YOU!