Coffee roasters get into the coffee business because they are passionate about flavourful, fresh coffee. Roasters are on the hunt for innovative blends and unique single origin coffees; visiting coffee growers in search of new flavours is an exciting process. The coffee supply chain is complex and operating a successful roaster requires careful inventory management. This necessary work can sometimes lack some of the excitement of the coffee business more generally. Let’s look at three key supply chain challenges for coffee roasters.
Supply Chain Risk
Coffee producers accept a high degree of risk and uncertainty in their supply chain, namely the threat of disease, significant rain or changing temperatures meaning coffee yields may vary substantially from year to year. Although coffee producers bear a large part of this risk, roasters are invariably affected when coffee producers are dealing with an unproductive season. If disease or weather impacts are widespread, the price of green coffee will usually rise even as availability and quality decrease. Poor growing conditions will likely impact on supplier performance. Although you may have placed advance orders with growers, growers and wholesalers are likely to need to balance multiple competing orders in the face of any inventory shortage.
Many businesses are responding to the risk posed by unstable growing conditions by building redundancy into their supply chains. Smaller roasters who might have favoured coffee from one particular region are increasingly distributing their orders across multiple regions to reduce the risk and severity of disease and weather impacts. Equally, many roasters are adopting a leaner model for both single origin and blend coffees; rather than pre-committing to a particular range of coffees, roasters are making quick procurement decisions and buying what’s well priced and available.
Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. When not writing about inventory management, you can find her eating her way through Auckland.
Understanding Production History
For a boutique roaster, it can sometimes be hard to link the green coffee used to the roasted coffee that has been produced. This is particularly the case where a roaster has been producing several different blends as well as some single origin coffees using a number of the same beans. Although some roasters run their business through Excel spreadsheets, a better way to keep track is to use online inventory management software. Most online inventory management software has custom recipe functionality, making it easy to see what green coffee has been roasted and blended.
Keeping detailed production and sales records also makes it much easier to forecast future demand. This means that your business can proactively respond to seasonality and events that prompt cafe orders.
Reducing Guesswork and Waste
Green coffee will hold its flavour for much longer than coffee that has been roasted, so it is essential that roasted coffee is sold and dispatched as quickly as possible. A speciality coffee producer simply cannot afford to sell stale coffee. Online inventory management software makes it clear how much roasted coffee you have in stock at all times. This makes it easy to know how many orders you can fulfil on existing stock. Because you know whether you have roasted enough, the risk of running out of stock is much lower. This justifies holding much smaller reserves of safety stock, sparing more coffee from going stale and being wasted.