Potential benefits for the producer, the agreements are usually long term and as such can help create price stability. This expectation of premiums allows producers to focus on the coffee instead of the marketplace, and to be able to pay for the extra effort it takes to maintain the quality.

Exclusivity creates a certain sense of loyalty and communication between the producer and the importer/ roaster that may otherwise not be possible. It is also in the best interest of the receiving company that the quality is optimal – as such it may provide technical help and other assistance that would otherwise not have been available to the producer.

Potential disadvantages for the producer, an exclusive arrangement may limit the coffee’s exposure. If it is with a smaller company or companies with limited market share, then the chance to create a broader consumer base is lost. This could imply that when the agreement comes to an end the producer is left with a coffee that enjoys only limited awareness and requires further effort to build market share.

The producer is relying on one or a few companies to promote his coffee, but generally has no guarantee this will in fact happen, or that it will be enough to be effective. Even though it is also in the buyer’s best interest to ensure this, he or she may in fact not do so.

Leave a Comment

Your email address will not be published. Required fields are marked *