More opportunities and trust
Our impact really started to come together in 2023. We opened the marketplace in the United States, giving producers new business opportunities in the world’s biggest coffee market. We launched Grower Capital, a producer pre-financing program, and pre-paid US$800k that year alone, reducing payment waiting times. And we started sharing more sales data with producers with personalised reports.
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On the roaster side, we invested in forward-buying education, hosting in-person workshops in Zurich. As a result, green buyers felt more confident to contract coffee at origin—instead of only buying spot—and the volume sourced by new roasters grew threefold. We helped kickstart lots of new relationships, and roasters who didn’t think direct trade was for them dived right in, a sign of real trust in the model.
Building a sales powerhouse
This is just a glimpse of what happened on Algrano’s marketplace in 2023. There has also been a lot of work on the background to shift gears more towards producer services. This is in line with our promise to turn the platform into a sales powerhouse for the farmers, exporters and cooperatives we work with.
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We’re digging deeper into relationships too. In this update, we share the status of producers’ relationship retention and expansion, reflect on the role of one-off micro-lot buyers, and suggest what a sustainable customer portfolio could look like. We also talk about how different types of coffee drive different buying behaviour—and how producers’ online inventory has been changing in line with those findings.
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When producers sell locally, they take their coffee to a warehouse and boom—money in the bank. But they miss out on price premiums. Direct trade pays better but it takes months to see any money. Ouch.
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Interest rates at origin are also typically high—30% a year is not unusual—because farming is seen as a risky business. So, banks are not lining up to help. Not to mention the paperwork. It takes forever…
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To solve these problems, we launched Algrano Grower Capital. This is a prepayment program. When a producer signs a contract with a roaster, they can ask to be paid there and then, before the coffee ships.
With data from the marketplace, we can generate a credit score for producers in real-time. We assess risk more accurately, more quickly, and with less cost than banks.
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Even the best-performing producers have roasters who stop buying from them from one year to the next, or that buy less. That’s a normal part of doing business.
Following relationships as they mature helped us flesh out a view on what we consider a sustainable producer portfolio. A healthy and mature one has around 80%-20% split between ongoing and new relationships. We’re not there yet.
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While there’s room for improvement, the portfolio view is super actionable. We can see if a producer needs to switch things up with their strategy or inventory. The goal is to support a healthy sales volume and a diverse pool of buyers.
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You'll find all this and more in this impact progress update. Understand what Algrano is about: how our impact is baked into the services we provide and the tools we build, what's your Theory of Change and business model, and what coffee producers think about it all.
