I think 2025 exposed a lot of the venture capital, but also the dependence roasters have on the financing from importers, often from multinationals. I think we're facing a lot of the questions of roasters' struggle on payment terms, and cash flow is tough. I mean, we talk about cash flow super tough for producers. It's super tough for roasters.
And for the longest time, I think importers were shouldering that. I think it's become harder and harder with the highest price of coffee to actually shoulder that cost of financing. And so we're kind of exploring, we have roasters coming to us and saying, hey, can you give us longer payment terms? And we're doing some of that, but at the same time, I'm kind of like, I want to be able to use this to float it more towards what is needed at the producer side.
So we're behind between that same dance of roasters need financing, but I wish it was a different case in that there was, on the U.S. side, that's where mainly U.S. and Canada markets are, that roasters could build out their own line of credits and manage their cash flow more instead of depending on importers so that the financing that is here can be focused more on supporting the producer side. Sourcing green coffee doesn't have to mean sorting through endless options to find the one that works.
Arcadia Green Coffee focuses on identifying Colombian coffees that match what roasters are already seeking or preparing to release. They only move forward when pricing allows for both producer and roaster. They pay producers upfront and they provide a clear landed price, helping roasters make better sourcing decisions more efficiently. Find out more about Mapa Forward's podcast advertising partner, Arcadia Green Coffee, by visiting their Instagram at Arcadia Green Coffee and then contact Augusto Amaya on WhatsApp or email.
You'll find all the links and details in the show notes. Welcome to the Daily Coffee Pro by Mapa Forward, friends. I'm your host, Lee Safar, and this is Episode 3 of a really interesting five-part series with Sean Warner from the Honduran Coffee Alliance. We are talking about the way that coffee is priced, the way it's priced now and the way that we think that it may need to change in the way that it's priced in the future.
And in this episode, we're talking essentially about risk. And to be very specific about what we mean by risk, Sean, an important part of this element, the element of this conversation, is that the number that we assign to the price of coffee isn't the end of the conversation, is it? The timing of when the producer gets paid, whether they get paid upfront, whether they get paid, you know, after it's arrived in the other country, all of that plays a role. Am I understanding that correctly?
Yeah, absolutely. I think that's one of the biggest challenges to kind of break from the current system is those players are the ones that have the liquidity to pay producers often. So again, explain a little bit how it works for us and in Honduras in general. Typically, producers in the conventional system that's paid completely based on the C-price, they are getting paid cash on hand when the coffee is ready.
So they have their coffee ready and they're delivering. Sometimes it could be cherry, wet parchment, or dry parchment, different stages. But either way, they're typically paid cash on hand. Here's the price.
And it's done. So in a lot of ways, that's a positive thing for the producers. And I think they're so used to that. That is a very good thing.
But that requires a whole lot of liquidity to say, okay, we're going to pay you producers here and then wait essentially between until the roasters are paying on the other end months later, and then it's split between the exporter and the importer, but they're starting that burden of the financing that goes all the way from producer to roaster. So producers are used to that. And the strange reality is that we've come in and been able to work with producers. Still don't necessarily have the liquidity to do all that.
So what we've been able to have producers say, okay, we're gonna get you a lot better price. We're gonna pay you in advance at the time of delivery of the coffee and the rest of it as actually it gets exported, we're able to bridge some of that with partners between when it's exported to roasters. And so I think I've often kind of looked at that a little bit as a negative of that we're not able to pay in full. And I think sometimes it can be.
But surprisingly, others in Honduras, what I've learned, others in Honduras are trying to do similar things, more relationship coffee. The liquidity portion of it is the biggest challenge. And I hear so many stories about producers that work with others that have to wait. They deliver their coffee in March and have to wait till September, October to get paid in full.
And so more and more producers are saying, we love how you do it. You pay so much quicker. I'm like, I feel like I need to pay quicker still ourselves. I should do that.
But the stepping into relationship coffee and doing that, that is often one of the biggest challenges for producers and for roasters is how to bridge that when they're not just following the conventional system. And so that's become a big challenge. And communication to the producers that work. I guess communication from the producers to us is that, that is a big deal for us to say, when can you pay us?
One of the biggest motivators if they want to work with us is our timing, is that is a big portion of it, is when our timing of payment is. And that's something I think we're managing and trying to figure out how to get better at. And my partner Frederick works in fintech, financial technology, and knows some of these things better than I do, for example, to find better ways to finance some of this, because I do think the liquidity financing portion right now is a big challenge in the coffee industry. It's amazing how much of the financing that I see gets flowed through other companies ends up, in the end, it's actually coming from the huge multinationals that have the larger line of credit.
It's like there's this other companies operating in some semi-independent category, but then you find out kind of behind them, there's a multinational that is feeding from the line of credit that they need for that. And I will say at this time, that's also the same case with a lot of roasters. And you're gonna see more and more of that. Where I had a conversation with somebody yesterday and he was bragging that, you know, he's just waiting for, you know, he's going to be vacuuming up a whole bunch of roasters as they are just on the brink of going out of business.
And I'm like, okay. And he's like, well, that's what's going to happen. It's going to be, they're all going to go out of business. The ones that are going to stay in business are the ones that are backed by venture capital.
And, you know, we're not going to bother investing in people before they go out of business or we know they're going to go out of business. That's the cruel reality of 2026, in my opinion. Yeah. Yeah, I think 2025 exposed a lot of the venture capital, but also the dependence roasters have on the financing from importers, often multinational.
I think we're facing a lot of those questions of roasters' struggle and payment terms and cash flow is tough. I mean, they talk about cash flow super tough for producers. It's super tough for roasters. And for the longest time, I think importers were shouldering that.
I think it's become harder and harder with the high price of coffee to actually shoulder that kind of financing. And so we're kind of exploring, we have roasters coming to us and saying, hey, can you give us longer payment terms? And we're doing some of that, but at the same time, I kind of like, I want to be able to use this to float it more towards what is needed at the producer side. So we're behind between that same dance of roasters need financing.
But I wish it was a different case in that there was, on the U.S. side, that's where mainly U.S. and Canada's global markets are, that roasters could build out their own line of credits and manage their cash flow more instead of depending on importers so that the financing that is here can be focused more on supporting the producer side. Sourcing green coffee doesn't have to mean sorting through endless options to find the one that works.
Arcadia Green Coffee focuses on identifying Colombian coffees that match what roasters are already seeking or preparing to release. They only move forward when pricing aligns for both producer and roaster. They pay producers upfront and they provide a clear landed price, helping roasters make better sourcing decisions more efficiently. Find out more about Mapa Forward's podcast advertising partner, Arcadia Green Coffee, by visiting their Instagram at Arcadia Green Coffee and then contact Augusto Amaya on WhatsApp or email.
You'll find all the links and details in the show notes. Welcome to the Daily Coffee Pro by Mapa Forward, friends. I'm your host, Lee Safar, and this is Episode 3 of a really interesting five-part series with Sean Warner from the Honduran Coffee Alliance. We are talking about the way that coffee is priced, the way it's priced now, and the way that we think that it may need to change in the way that it's priced in the future.
And in this episode, we're talking essentially about risk. And to be very specific about what we mean by risk, Sean, an important part of the element of this conversation is that the number that we assign to the price of coffee isn't the end of the conversation, is it? The timing of when the producer gets paid, whether they get paid upfront, whether they get paid after it's arrived in the other country, And an important part of this is that when you look at some of those other categories that we have been talking about, you know, we've got the commercial grade, we've got like that middle part, you know, the 80s to 84s, 85s. And then you've got the 86s and above.
And it seems that the more expensive coffee is, the more strict the terms are around payment, right? Those expensive coffees, people are saying, you either have to pay upfront, especially for those very expensive coffees, you have to pay upfront, or you've got like maximum 30-day terms on those kinds of things. Why do you think that happens? I think what I guess I would see more in that category of the higher price ones is there's much more of a crazy range of what happens with the terms.
I've had plenty of story conversations with the producers I've worked in some of the higher price ones, and yet the payment to them flows crazy late that they've won competitions. And yet they deliver the coffee and don't get payment until four months later. Wow. And yeah, that happens all the time.
And yet there's also these other ones I think I see where, like you're saying, like, okay, well, the roaster has to pay upfront to cover the risk more. We've never really done any of that. I think we've had a question to escalate, do you need an upfront payment, but we've been able to say, like, we're going to... I don't know if trust is the right word, but we know we can cover the liquidity in between it, and we're just gonna set the price here and here and pay when it delivers.
But there is just, I think, in that category such a spread of how things operate, and it's all over the place. So, let's say you guys are looking to do business with a new roaster and a new producer. Tell me how that works. Because you guys are a values-driven business, right?
Like, you guys won't just do business with anybody. So how does it work if you've got a new roaster or you've got a new producer that wants to work with you? Yeah. So, typically what we're doing is we design our harvest cycle around three main rounds where we're cupping through all the coffees in our network.
Our mission is mainly based around three co-ops that we're saying, okay, how do we bring these groups of producers from large conventional to a huge chuck of specialty blenders and high-end micro-roasters? And so we're saying, okay, bring all these coffees together, plus other producers that we kind of have in our network that bring us their coffee that we cup through all of them. And then through that, have these three rounds that we get sampled in the hands of buyers. So the idea, though, is to turn those into long-term relationships.
So often a lot of those coffees are, I already know this coffee is going to this roaster, so I will sample to them beforehand because I know it's happening. I know this roaster is buying eight bags of a caffeinated co-op, and they also want 10 bags of a nicer micro-lot from Joserio. And so we're cupping it, but really just then passing the sample on because we know it's going to happen. It's just the confirmation of it.
New roasters, it's more of a, okay, what do you think might be a good way to start into this? And we more than send them quip fits on quality on what kind of coffee you like. Because all the different producers in our network are ones that we'd love to turn into long-term relationships. And so we kind of say, what's a good matchmaking process where we can fit coffee for you and then turn it into a long-term relationship?
I don't feel like we do a ton of, I don't know, vetting in the initial process, but I think it's more in the relationship transition. The first year is finding a good home for these coffees and getting into the roaster's hands. And then it's the next step of, okay, do you respond? Do you want to engage with producers and really try to turn this into a long-term relationship?
And that's where I think our biggest challenge and work is. And I think success is that we've been able to turn a lot of these into these long-term relationships. Yeah. And with regards to payment, let's say you've got a new customer, a new roaster.
How do you bring them into that ecosystem? Yeah, all we do is when we, so they identify what's options, what coffees they might like. And then we would give them samples. And so they say, okay, yeah, I want this 10 bags of coffee.
And at that point, we would just put it on a contract to say what you'll be paying, but they don't pay until we deliver the coffee to them. So you carry the risk initially. Yeah, so we carry all the risks between producer. We pay the producer at the time of advance.
We've worked through partners to put them export import. And then so we're able to pay in full to the producer at the time of export. And then they help us kind of bridge in that financing gap to roasters. And then roasters pay as it's delivered to them.
So they're able to operate more on kind of how it's typically done in the past, but that they're paying as coffee is shipped to them. But they contract commit to it before it ever leaves the hands of the producers. And so we're able to do that where they commit and say, I want 10 bags of this. And then we have to figure out the puzzle piece of this feeding containers together.
And then we bring the coffee back for them and ship it to them. But they don't pay for it until it's landed to them. And what about that chestnut? Sorry, go on.
Yeah, because we're much more experienced as U.S. and Canada, but very much open exploring, trying to expand into other markets and such as well. You heard it here first, folks. If you're looking for coffee from Honduras, get in contact with these guys.
But what about that chestnut of like people who buy a coffee off a sample and then when they get it, they say, I don't like it anymore? What happens in that situation? For the most part, generally, I don't have that happen too often, but that does happen. And so every once in a while, we've had the cases where we got a coffee that is shipped, but then it's not all my.
Right now, it's a small situation where it's like a couple of bags that someone said, no, it doesn't fit anymore. And so I'll go back to my network of roasters and say, OK, I got a coffee I need a home for. And so we'll find a different one. Exactly.
OK. Yeah. But I try to explain for the most part that the risk is on you. Like you are committing to this coffee and we don't want to be, OK, yeah, you can just reject this coffee later and we'll find a home for it.
And so as much as possible, like for the most part, what happens in those situations is I say, take the coffee. We'll give you a small discount or something if we agree that there really was an issue with the coffee. Right. Maybe something happened in transit or whatever.
Yeah, exactly. Because I don't really want to be in the place where we're also just back to doing spot coffee because there's all this coffee. No, no, I don't want that coffee more. But for the most part, I think roasters have been, I think, fairly positive in that sense where they say like, OK, yeah, we'll communicate if there is any issue where we feel like it dropped a point or dropped in that.
But we understand most of that. So I don't feel like we get rejections much at all. Yeah. And we have really good export import partners that help us move the coffee without too many issues.
So you're really focused on your ecosystem, right? Like you're picking your partners, whether they're your producing partners, your logistics partners, and your roasting partners. You're putting together a puzzle so that over time that puzzle fits more in harmony and it's not dependent on external forces to stabilize it. Am I understanding that correctly?
Yeah, definitely. Yeah. And the long term goal has always been that we just have these long lasting relationships, producers and roasters, that it's not too much work on it. Since we know that they're going to buy this coffee again and we can keep doing it and be a part of facilitating that.
But the goal is to have that ecosystem where we got this roaster could become like a partner for this co-op if you want to win and grow together. And I think the best relationships often with these roasters I have, like I have this really strong relationship with this producer for my 10 bag mic lot. And I also have a relationship with this co-op that we do more 84 point specialty blender with. Often as well, they'll say like, but I also want to try some other coffees this year and see if there's something fun we can get.
And so those relationships are fun and work well. Speaking of relationships, in the next episode, folks, we're going to be talking about direct trade and whether it's a viable option to stabilize coffee pricing. Direct trade and relationship buying is, you know, these are buzz terms that we use in the coffee industry, but they need a little more further explanation. So join us for the fourth episode of this series.
Peace, love and peanut butter. Have an amazing rest of your day. If you enjoyed this episode, consider supporting Mapper Forward, our guests and advertisers on social media. Subscribe, hit the like button, leave a comment and share this episode with a friend.
And if you'd like to support our work more directly, become a paid premium YouTube subscriber or Patreon backer to get early access to the show ad