Busting the microlot myth

The idea that Direct Trade is all about microlots is pervasive.  And persistent. And, at least in our case, dead wrong.

Michaele Weissman wrote the book on Direct Trade nearly 10 years ago. God in a Cup tells the story of Direct Trade through the work of three of the model’s principal intellectual and material authors: my Intelligentsia colleague Geoff Watts, Peter Giuliano, then of Counter Culture Coffee, and Stumptown’s Duane Sorensen.  But in the sprawling retrospective on Direct Trade she wrote last year for Sprudge, she perpetuates the microlot myth, defining Direct Trade like this:

Direct Trade is a sales practice related to the growing, selling, and buying of microlots — small amounts of coffee grown with an unusual attention to detail on pinpricks of land.

To her credit, she goes on to suggest that Direct Trade isn’t all about microlots.  It includes single-origin lots, too, she says.

The Direct Trade label can also apply to single-origin coffees. Single-origin refers to disaggregated beans grown in somewhat larger areas of a single farm or possibly several farms. A single-origin may produce as much as 50 or even 100 bags of unusually high-quality coffee.

Even this broader definition of Direct Trade is fatally narrow, however.  And if this is the definition offered by someone who has had years of exposure to the chief architects of the model, then there is little hope that casual observers of specialty will understand what Direct Trade is really about.

We believe coffee has a natural pyramidal distribution, with the lowest-quality coffees being most common and occupying the base and the highest-quality lots being rarest and occupying the peak.  This vision is intuitive. Extraordinary quality is hard, after all, and producing low-grade specialty coffees easy by comparison. But the vision is also empirical.

While we draw a higher baseline than most other specialty companies, with purchases beginning closer to 84 points rather than 80 points, our purchases neatly reflect this pyramidal construct.  In other words, our Direct Trade model isn’t just concerned with the small lots of coffee at the peak of the pyramid.  It is the whole pyramid. For us, Direct Trade isn’t a “sales practice” at all.  It’s a sourcing model.  The way we buy coffee.  Period.

To be fair, we contribute to the popular tendency to equate Direct Trade with microlots and single-origin lots.  Call it the Pareto principle of coffee quality: it seems we spend roughly 80 percent of our time and energy breathlessly promoting 20 percent of our coffees.  But who could blame us? Our Special Selection microlots push the frontiers of flavor: their superlative sweetness, crystalline clarity, cultivated complexity and sheer delight, they are unimpeachable evidence for our our conviction that coffee is culinary.  And our single-origin I-marks represent what is best about the countries and regions where they are grown. We can’t blame observers of specialty coffee, even careful, veteran observers like Michaele, if they share our enthusiasm. But in failing to look beyond our headliner coffees, we miss something important, and not just the extraordinary quality of our everyday blends.

If Direct Trade were, in fact, just about microlots and single-origin lots, it would merit the crass derision and casual dismissal of its many critics.  But Direct Trade, at least as we practice it at Intelligentsia, isn’t as easy to dismiss.

We work intentionally to fill the containers we buy from our Direct Trade partners with as many as four or five different quality grades, from single-A all the way to microlots, with graduated premiums.  Our purchase of A-grade and AA-grade coffees along with the single-origin AAA lots and microlots represents an extraordinary source of value for our partners, who struggle to find reliable markets and meaningful premiums for their larger volumes of lower-grade coffees.  There is enormous opportunity cost for growers in the hustle to find buyers for those coffees, and invariably, real financial losses when they are sold through conventional trading channels.

I suppose there is one way in which Direct Trade is all about microlots: in most cases, it was the pursuit of microlots that helped our partners begin separating their coffees in the first place, making our multi-grade purchases and our entire Direct Trade model possible.

As much as any other single thing we do as part of the Intelligentsia Direct Trade program, this practice of multi-grade contracting creates value and efficiency for growers, and significantly reduces their market risk.  But because the microlot myth has such a firm hold on our collective coffee imagination, it is rarely identified as one of the benefits of the model.

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This post is the fifth in a series of seven summarizing our contribution to the Sustainable Food Lab 2018 Leadership Summit, focused on resilience, and is part of a series exploring the ways our Direct Trade model helps to reduce the risks faced by coffee growers.