After presenting the functioning of the international market and the macroeconomic reactions of supply and demand, it is necessary to define which products we are discussing.
The hierarchy of proportions in the international market between specialty coffee and standard coffee is not determined solely at the farm or producer level. It is largely controlled by numerous intermediaries and local buyers serving international clients. This strongly influences the economic context of coffee.
A significant portion of coffee commercialization passes through multiple intermediaries and multinational corporations that hold a large market share of coffee beans. By classifying coffee, these actors maintain low standards, prioritize quantity and profitability, and purchase at low prices without fairly compensating producers. These practices often conceal defects that only appear during roasting, resulting in lower-quality coffees with fewer health benefits. Producers are seeking solutions to break out of this cycle that does not reward them.
The objective is to provide producers with the tools and means to determine the price of their coffee, eliminate dependency on intermediaries, and establish direct links with buyers and consumers. By regaining control of their farms and producing higher-quality coffees through direct relationships, producers can stabilize their production and fully valorize their expertise.
The development of specialty coffee, which might seem like a solution, sometimes reproduces the same inequalities in favor of intermediaries.
It's what is called the "paradox of the coffee", which explains the paradoxical phenomenon of the more the coffee producers produce and sales, the poorest he gets.
According to the classic definition by the Specialty Coffee Association (SCA), specialty coffee is classified as “highest quality,” evaluated by cup cleanliness, bean size and uniformity, as well as sensory attributes. Conversely, commercial-grade coffee has uneven, malformed beans with significant variations in size and shape, representing a large portion of global production. To qualify as specialty coffee, it must score 80 points or higher and distinguish itself by a clean, rich, and harmonious cup.
In Colombia, as well as in Peru, Ecuador, Panama, Costa Rica, Guatemala, and Mexico, a variable share of production reaches this level and is marketed as Excelso, a refined coffee type. Thanks to favorable natural and topographic conditions, these countries produce high-quality coffees with distinct aromas and sensory profiles.
In recent years, a new segment of specialty coffee has emerged, driven by producers and roasters seeking to offer coffees whose quality exceeds that of standard coffee or even Excelso. These coffees reflect origin, terroir, variety, and the complexity of the production process. They go beyond classic standards, using exotic varieties and experimenting with innovative harvesting, fermentation, and drying processes that require more time and specific tools.
Their priority is quality over quantity, demanding more labor and particular production conditions. Their SCA scores often exceed 85 or 90 points, distinguishing them by aromatic richness, cup complexity, and health and environmental benefits.
These specialty coffees, with complex processes, are popular in a specific European segment, particularly among roasters and specialized coffee shops. They bring innovation and complexity but do not always guarantee full traceability or fair compensation for producers. Nevertheless, they offer consumers a unique sensory experience.
European Regulation and Sustainability
A clear example is the upcoming European regulation, which could jeopardize and exclude small producers seeking to produce less but better. The EU Anti-Deforestation Regulation, adopted in April 2023, represents a significant shift in the international trade of agricultural products. This legislation requires that products consumed in Europe—such as palm oil, soy, timber, cocoa, or coffee—be deforestation-free and compliant with local laws in the country of origin.
The aim is twofold: reduce global deforestation and encourage transparency and sustainability in agricultural supply chains. Exporters must demonstrate, using precise geolocation data, that their products have not contributed to deforestation after December 31, 2020. Each exported lot must include a due diligence declaration certifying compliance with environmental and legal criteria.
Initially, implementation was scheduled for December 30, 2024, for large companies and June 30, 2025, for micro, small, and medium enterprises. However, the European Parliament decided on November 14, 2024, to postpone implementation by one year to allow better preparation. The new deadlines are December 30, 2025, for large companies and June 30, 2026, for SMEs, pending ratification by the European Parliament, the Council, and the Commission, to be confirmed before December 20, 2024.
Coffee, representing approximately 7% of deforestation linked to European imports, is directly affected. Small producers, primarily in Latin America, Africa, and Asia, are on the front lines. They often operate under challenging conditions: limited access to digital tools, insufficient connectivity, incomplete knowledge of EU standards, low financial resources, and small, dispersed, and unregistered plots, complicating the required geolocation.
This regulation places significant responsibility on producers without providing sufficient support, leaving them vulnerable to complex information, data management, and compliance requirements. This increases production costs and makes maintaining sustainable business relationships difficult.
Many producers could be excluded from the European market, not due to unsustainable practices, but because of limited technical and administrative capacity to prove compliance.
In practice, these requirements demand identifying and georeferencing 100% of producer plots, ideally as polygons to demonstrate deforestation-free status to buyers. Organizations must collect accurate GPS coordinates, create polygon maps of plots, and share this information with European importers. For rural cooperatives, this represents a colossal effort requiring training, digital tools, and a clear understanding of legal obligations.
The Role of Finca and Producer Adaptation
Faced with these challenges, Finca’s mission is to bridge the gap between producers and European market requirements. Its approach includes technical and educational support, offering workshops on traceability and due diligence, helping cooperatives and small producers comply with new standards, and ensuring access to the European market.
Finca facilitates the process by advising producers on developing practices and management systems and has created an information management platform that simplifies validation and certification. In this framework, Verto collaborates by formalizing requests related to regulations, production methods, and information management. Thanks to this cooperation, all coffees represented by Finca benefit from clear and transparent traceability, increasing trust along the supply chain and ensuring compliance with European market requirements.
In the coffee supply chain, several factors have become major constraints for small Latin American producers and buyers. One key obstacle is misinformation and lack of knowledge regarding procedures, deadlines, and requirements to access international markets.
These skills, necessary to export and comply with local or European regulations, are often insufficient among many small producers. Requirements are often non-negotiable and not designed holistically, making administrative and financial burdens difficult to bear and unattractive.
Some criteria impose minimum volumes too high to reach for fragmented plots and micro-lots, while others set thresholds too low, making operations economically unviable.
Additionally, logistical, transport, and certification costs are dispersed and poorly coordinated. Each producer manages these processes individually, resulting in wasted time, resources, and complex commercial relationships with international buyers.
These restrictions create an imbalance: producers face pressure to meet complex requirements, while buyers struggle to secure compliant, traceable, and uniform lots. This limits small producers’ access to specialty coffee circuits, their ability to stabilize fair income, and reduces the overall competitiveness of the chain.