Inside the Cup: Crisis, Sustainability, and Philippine Coffee
There seems to be no clear end in sight yet to the coronavirus pandemic. The government has put a name on the “new normal”— the general community quarantine (GCQ) involves more relaxed measures compared to the enhanced community quarantine (ECQ) that is still in place in Metro Manila and other high-risk areas. Businesses now have to adapt to the long-haul reality that COVID-19 brought upon us.
Fortunately for the local coffee industry, a social enterprise (SE) invested in changing the mindset and empowering coffee farmers to process and roast their own coffee. Now their investment is paying off, as some farmer cooperatives and groups continue to operate and sell their products in their own localities, keeping their livelihood despite the disruption in the supply chain caused by the lockdowns.
Empowering local coffee farmers as agro-entrepreneurs
According to Vie Reyes, co-founder of Bote Central Inc., the lockdown has affected the supply of raw coffee beans from Mindanao, Visayas, and Cordillera to processors in Manila, illustrating the plight of many farmers who are unable to sell their produce to the market. Now, more than ever, farmers are realizing how important it is to have their own coffee processing. “Swerte ‘yung mga magkakape na may mga sariling processing, na may roasting machines, kasi nabubuhay sila. In fact, nakakapagnegosyo pa rin sila ng kape dun sa communities nila, sa areas nila,” Reyes shares.
Bote Central Inc., a partner of the Foundation for a Sustainable Society, Inc. (FSSI), is a social enterprise that promotes the sustainability of the Philippine coffee industry through rationalizing the supply chain and embedding Fair Trade principles in their business. Bote Central empowers farmers to be more than suppliers, and enables them to move up the value chain as small-scale processors.
The enterprise was able to drive local economic development through technology. Bote Central designs and builds their own coffee roasting machines, which they share with their partner coffee farming communities across the country. Their roasting machines, suitable for smallholder farmers, made it possible for these farmers to economically process and sell their own coffee, paving the way for community-based coffee roasting business facilities. In that way, farming communities can add value to their raw coffee beans and create sources of income for their families.
In the end, Bote Central’s intervention is not only in providing these machines at a reasonable price to local small farmers, but in opening up opportunities, ones that used to belong only to bigger players in the industry.
Grounded in market reality over promise of false hopes
Besides taking ownership of their role in the coffee value chain, Bote Central also imparts to farmers the value of speaking their minds. “‘Yun ang ginawa namin na change as an SE, na baguhin ‘yung values or ‘yung confidence, ‘yung mentalidad ng farmers,” Reyes shares. Bote Central, however, understands that this is only one side of the equation.
“If you talk to the farmers, balewala na sabihin mo sa kanila na magtanim kasi maganda ang presyo…
Ang dami-dami mong pwedeng sabihin sa farmers, pero we call them the false promises. Kasi you’re just giving them false hopes.
Dapat konektado ang lahat ng binibigay mong promise or hope sa market.”
When Bote Central entered the world of coffee, it was not only the farmers that they saw needed to be changed, but the market itself. “Both the farmers and the market concerns in-address namin. Kasi ‘di pwedeng production lang. Kailangan may kasabay siya na consumption. ‘Yung promises dapat may kabangga on the other end of the value chain. You cannot just promise the farmers na they will have gold at the end of their rainbow.”
Bote Central imparts that the farmer himself and the communities where the farmers reside are part of the market. Reyes emphasized that, in fact, that is the primary market that the farmers should focus on. “Mismong sa bahay nila umiinom sila ng kape. ‘Yung kapitbahay ni farmer, umiinom ng kape, ‘yung barangay, umiinom ng kape,” she explains. This is the very same market which currently operating businesses take advantage during this lockdown, given limitations on travel and mobility.
Besides the sale of roasting machines which unfortunately has temporarily stopped, Bote Central is also engaged in the sale of coffee sourced directly from their partner farming communities. They have developed brands to cater to different market segments, but they still only move within 10 to 15 percent of the market, which they try to expand. “Consumption of coffee in the Philippines is 85 to 90 percent commodity coffee. As an SE, if you want to really make an impact sa economy natin, sa market natin, sa farmers natin, dun ka gagalaw,” Reyes shares.
Their business philosophy
Reyes is thankful that although it is not a basic necessity like rice or meat or vegetables, coffee is part of the food mentality of Filipinos. They were also lucky to stock up on a full inventory of coffee beans before COVID-19 hit. Their Basilio brand is still available in supermarkets, and they are also pleasantly surprised with the number of online orders they receive during the ECQ. It helped that they have set up online ordering prior to COVID-19 and are ramping up online sales. However, she admits that it is nothing compared to corporate accounts, institutional accounts, and monthly orders which make up most of their revenue and are currently suspended due to the ECQ.
Raw coffee beans are also waiting to be transported from their source communities. “Ang essence talaga ng survival ngayon is move the beans. When we say “move the beans,” it’s literally moving and selling,” she says.
Under ECQ, Bote Central is operating at 20% production. Only select employees are also qualified to move around, following government policies. As with other businesses, their plans this year were also pushed back. However, in the midst of these concerns, Bote Central sees several windows of opportunities. For now, that opportunity is working with the Office of Vice President Leni Robredo and other volunteers in providing free coffee for front liners. “We made it into an opportunity kasi lahat naman ng business opportunities come from a problem. Ganun kami mag-isip. Ganun rin yung binibigay namin na value sa mga farmer. Kung may problema, pag-usapan natin, at tingnan natin kung merong solusyon.”
Besides the significant decrease in production and income, they also experience a higher cost of moving their products around. In terms of needed support from the government and other organizations, the enterprise considers loans and grant facilities important to help them weather this crisis; relaxed loan settlements and tax relief will also be of great help.
FSSI has provided its partners a 60-day extension on due dates of their loan amortization and is discussing additional flexibility terms as needed to help partners cope with the effects of COVID-19 on their operations.
Bote Central’s “after-COVID” plan is already in the pipeline. They will be putting up more coffee roasting facilities in partnership or joint venture with other SEs, businesses, or individuals who share the same business endeavor.
In the meantime, Bote Central is shipping its coffee products nationwide in a limited capacity. In these extraordinary and trying times, let a good ol’ cup of a hundred percent locally made, sustainably sourced coffee brighten your day.
Their Basilio and Alamid coffee are available for deliveries. You may place your orders online through https://botecentral.com/. You may also follow Bote Central and Basilio: Coffee to Share on Facebook.