Blog based on an article on Beyco and with input from Isabel van Bemmelen, published by the Perfect Daily Grind (in Spanish)
Without coffee growers there would be no product to dry, sell, roast and export. Nevertheless, the coffee industry is complicated. And considering it’s already complicated for large companies, imagine the smaller cooperatives, whose members might not be literate, and/or do not have access to communication, markets, or financing networks.
However, the digital market provides solutions: Beyco, our global coffee networking and trading platform allows presenting coffee grower organizations to other financial entities to help them grow. With our credit line, we focus on small coffee farmer organizations that are just starting.
Connecting the market with financing
Having a credit history and accessing financing is the first step to entering new markets. Therefore, Beyco does not limit itself to enabling direct trade but also provides support to enter the financial market, making it truly viable for cooperatives. “We have to do this in order to help organizations to really start their line of credit. That is where the idea of connecting the market with financing was generated,” says Isabel van Bemmelen, Managing Director or Progreso.
Beyco, in search of efficiency in transactions, has created a model that allows small or inexperienced cooperatives to access credit directly. “Now, with these market prices, the organizations need more liquidity and be able to store all the coffee they need to comply with the contracts they sign,” says Isabel. “There is a high demand to obtain financing because everyone needs liquidity.”
The flow of information
An additional advantage of the trade model promoted by Beyco is the flow of information between producers, buyers and financial agents, precisely because it is done quickly and transparently. The cooperatives that register on the platform, at no cost, can offer their coffee, request financial services from the Progreso Foundation, sign export contracts and even send samples to potential clients.
For their part, buyers can search for coffees by origin, price and other characteristics, review the profiles of the producers, make negotiations and even sign contracts online if the parties reach an agreement.
Access to information becomes then an added value of the platform for all registered users. In this way, it also contributes to creating greater traceability and offering security in operations through technologies such as blockchain.
Access to digital tools will lead the way to direct and fair markets
Although the professionalization of coffee producers is a necessity, their economic and social conditions are the main obstacle to achieving it. Creating conditions that are fair to coffee growers is the main challenge in transforming the model and is one of the main focuses of the Progreso Foundation.
It is sure that, with the strengthening of digital trading platforms, the coffee market will continue to transform. Likewise, it is possible that the new generations of producers, with more opportunities and access to digital tools, will take the industry to new levels of specialization and professionalization with direct and fair markets.