#021 - Why Direct Coffee Sourcing is Harder (and More Rewarding) Than It Looks

​“You have to suffer. Otherwise, you are not creating value.”

​We built Meiero based on several principles: providing transparency, solving relevant problems, and offering an open platform for producers, co-ops, roasters and agritechs to add value and scale their operations with lower risk. 

​Along this journey, there were great achievements and several problems that could have been avoided—or, at least, we could have been better prepared for them. 

​By speaking openly about challenges, we aim to build trust and demonstrate how we can add value to our partners. More importantly, we believe we can save our partners' time and build together.

Several steps were time-consuming but gratifying. Understanding the client's perspective, creating a legal structure, setting up infrastructure providers, aligning our partnerships​, buying the green coffee​, and even studying AI's applicability to agribusiness - each step presented ​its own challenges and rewards.​ We became much stronger after it.

While these were gratifying, one step was especially painful: cross-ocean logistics.

​By early February, we felt confident. We had the ideal sourcing, great partners and a lean logistics operation. We contracted Maersk for a direct 25-day voyage from Santos to Rotterdam, scheduled to arrive on March 14th. As of today, our coffee is expected to arrive on May 13th. 

That was a two-month delay!

​The impact was significant. Financially, it strained our estimates, tying up our working capital and delaying our revenues. Strategically, it hit our most valuable asset, our relationship with clients. Because our model relies on delivering spot coffee at the best price, we paused commercial conversations for several weeks until we gained more confidence in the timeline.

Ultimately, this experience highlighted why it is so difficult for co-ops and large farmers to sell directly to consumers. Every player in the supply chain adds specific value.

Indeed, every challenge improves our process. We are now officially resuming talks, and our coffee will be available throughout the European Union starting in the second half of May.

We are standing by our promise to offer the best value on the market: Brazil Naturals (84-85 SCA points, zero defects) for €9.60/kg.

Moving forward, we have adapted our operations to increase our microlot offerings. This brings new challenges at the origin, which I’ll dive into in our next newsletter.

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Weekly Highlights:

• Coffee Futures KC Price in NY: +0.16% weekly, closing at 288.45 cents/lb (Reflecting stability after mid-week highs near 306 cents).

• Coffee Price in Brazil's B3 in USD: +0.53% weekly, closing at 306.82 USD per 60kg bag (Converted from BRL using closing rates).

• BRL/USD fx rate: -0.85% weekly (The BRL weakened, moving from approximately 0.2018 to 0.1999 USD).

• Proxy of 20' container freight prices (Santos to Rotterdam): Down ~3% weekly (Following a broader softening trend in South American export routes).

• M&A Milestone: Keurig Dr Pepper (KDP) confirmed the successful integration of JDE Peet’s following their April 1 acquisition, reporting Q1 net sales growth of 9.4% as they aim for global coffee leadership.

• Corporate Earnings: Starbucks reported a recovery in its latest quarterly results, crediting operational efficiencies and a focus on premium, customizable cold brews for a rebound in North American store traffic.​

• Global Competition: The 20th World Latte Art Championship concluded in San Diego on April 22. Taiwan's representative, Bala, took the title, signaling the continued rise of specialty coffee culture in Asian markets.

• Market Pressure: StoneX reported heavy origin selling from Brazil during the week of April 24, as the strengthening USD against the BRL encouraged Brazilian producers to lock in export prices.

• Sustainability Rules: New EU reporting requirements for the Deforestation Regulation (EUDR) began impacting logistics chains this week, with shipping lines requiring enhanced origin certification for Rotterdam-bound Arabica.

• Strategic Shift: Nestlé announced an expansion of its "Nespresso Momento" line for offices, targeting the hybrid work market as corporate coffee consumption shifts back toward centralized hubs.

• Consumer Habits: A report released April 25 shows "RTD" (Ready-to-Drink) canned coffee has reached a record 22% share of the total US coffee market, driven by Gen Z's preference for convenience over traditional brewing.

• Governmental Action: The Brazilian government initiated a new infrastructure credit line specifically for coffee cooperatives in Minas Gerais to modernize warehouse cooling systems against rising harvest temperatures.

• Climate Resilience: Vietnam's Ministry of Agriculture issued a decree on April 26 promoting Robusta grafting techniques to combat severe drought in the Central Highlands, aiming to stabilize 2027 export forecasts.

• Promotional Strategy: Luckin Coffee launched its first "Global Master" series in Southeast Asia this week, a strategic move to challenge Western incumbents through aggressive localized pricing and high-volume store openings.