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Forward Contracting - how it works?
December 9, 2024
News

Change of tone’s  approach to sourcing coffee focuses on creating lasting, mutually beneficial relationships between coffee producers and roasters. The essence of such collaborations lies in reciprocal commitments: producers agree to deliver coffee of a particular quality within a specified time-frame, and roasters commit to purchase specific quantity at mutually agreed prices-upon quality levels and prices. But what does this practically entail, and how does it benefit all parties?

For coffee producers, establishing forward-contract agreements offer stability and solid foundation for future planning. Knowing their buyers and prices ahead of time, enables producers to concentrate on refining cultivation and harvest practices, free of the uncertainties of fluctuating demand, quality or pricing.

Forward contracting is more than financial security, it shows profound level of trust and commitment to the producers' work. This level of trust makes the producers go an extra mile in preparing and exporting what they fondly refer to as "their roaster's coffee".

This personal connection turns sourcing into an interactive, cooperative journey, fostering a sense of pride as producers understand their coffee is destined for someone who values their work.

The Process: How It Works?

Our forward contracting process is grounded in planning and open communication, initiated through a collaborative session, whether in person or virtually. Ideally, this meeting occurs early in the year to align with origin visits. Here’s a step-by-step breakdown:

  1. Initial Planning Session:
    Together, we establish your annual needs by origin, honing in on preferences for cup profiles, volumes, and timelines. For example, the projection may include “14 bags of Honduran washed pacas with blackberry, grape, scored 86-88 points, with a target delivery month of May.” Samples will be provided before as offer sample (1), after milling, just before the export (2) and after arrival in the destination port (3) close to your home. At this point, we will also talk about any other initiatives you would like to participate in.
  2. Offer Samples:
    We often select few options for you, delivering 50g of green coffee sample. We either cup together or leave you to find best suit for your green coffee offering. We also offer sample roasting with SCA specification, having in mind local water quality. All roasted samples should be evaluated within 24-36 hours after delivery.
  3. Contract Finalization:
    Flexible terms allow for sample approvals and potential adjustments as needed but preferably your commitment should be based on PSS (Pre-Shipment Samples) samples. Understanding that all parties (producer, exporter/importer, roaster) are trying to complete the relationship method coffee will split the risk of unexpected turn outs in shipping, which often happen. We will recommend "SAS Replace" terms regardless, which ensure that if the initial sample doesn’t meet approval, you receive another sample at a comparable quality and pricing level.
  4. Export PSS Samples:
    Right after coffee is prepared for shipping, post milling, we are issuing the final version of your sample. Representation of this sample should pretty much reflect how your final product will land in port of destination close to your Roastery.
  5. Import Arrival Samples:
    At this point, change of tone again controls quality and verifies the purchase, pending your approval. After this is done, the coffee can be released to you. We offer 15/30 days term for all invoices after successful and no late payment run of 3 first invoices ever issued to you.
  6. Quality Control:
    Moisture content, density and water activity. We cup and verifying all the coffees landing for the change of tone.
  7. Delivery of your Coffee:
    Once approved, the coffee is transported to your designated warehouse, ready for pickup or delivery according to your specifications.

For roasters, forward contracting ensures consistency in inventory and facilitates planning for menus and marketing strategies. This preemptive approach often secures access to rare or high-quality lots, as dedicated and fast decision making buyers are frequently first in line for the top selections of each harvest. Additionally, committing to volume ahead of time allows for advantageous pricing.

While forward planning does imply a slight reduction in selection flexibility, the exclusivity gained—coupled with a personalized, tailored purchasing experience — often outweighs these limitations. For example, roasters who source from a particular producer year after year can cultivate anticipation among customers for the “new crop” from that origin or have access to new processing methods or varieties grown at that farm.

This continuity not only introduces unique coffee offerings to the market but also educates consumers about the intricacies of coffee sourcing and the annual coffee cycle. At the end we all are working with agricultural product.

change the tone. is here to discuss your needs and tailor the approach to suit your unique requirements.

Let’s change the tone. together.

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