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  • 6.2.1-E-COMMERCE AND SUPPLY CHAIN MANAGEMENT-TRADITIONAL AUCTIONS

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  • Traditional auctions

     
     
    There is growing interest in Internet auctions for selling specialty coffee. The concept and many of the legal, technical and practical aspects were developed under the auspices of the ICO/ITC/CFC Gourmet Coffee Project and involved the Brazilian Specialty Coffee Association (BSCA) working in association with the Specialty Coffee Association of America (SCAA). The first auction was held in Brazil in 1999 – the idea has subsequently been developed into the Cup of Excellence programme, owned by the non-profit Alliance for Coffee Excellence. Since 1999, a total of 60 COE auctions have taken place in Bolivia, Brazil, Colombia, Costa Rica, El Salvador, Guatemala, Honduras,Nicaragua and Rwanda. Similar Internet auctions have also been held in other countries, outside the COE programme. Under the COE programme top quality, locally selected coffee lots are submitted to a tasting panel of respected international judges and the top ten or so are auctioned via the Internet. As a result of this process the winning lots have achieved much higher prices than they otherwise would have, and indeed some have commanded premiums, which before were the exclusive preserve of coffees such as Jamaican Blue Mountain or Hawaiian Kona. However, the total quantity sold through Internet auctions remains small and although extremely high prices have been paid for the top lots, the number of bags in each lot has been very limited (averaging between 20 and 100 bags only, often shared between small groups of roasters who make joint bids). The small size of these lots creates certain shipping problems as no one lot is sufficient to fill a container on its own. (See 05.01.10 -Small Lot Logistics for more on this).

    Although the individual lots sold may mostly be very small these coffees do put a country and an area ‘on the quality map’ and, there is an increasing number of success stories where individual coffee growers have subsequently been able to create sustained follow-up business, at very good prices, with some of the auction buyers.

    The logistics of hosting an Internet auction are complex and involve developing a suitable portal, which can handle real time defined bids from different sources. The process of signing up international buyers and importers is also a difficult and time-consuming task, as is establishing a tasting panel of well-known cuppers. Origins interested in hosting a Cup of Excellence Internet Auction should contact the organizers at www.cupofexcellence.org. Note though that such auctions focus on the small exemplary segment of the specialty market and do not lend themselves to broader based selling of coffee.