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    Gourmet Coffee Makes Premium Prices Online


    © International Trade Centre, International Trade Forum - Issue 3/2003

    Using Internet auctions to sell premium coffee generates high prices for gourmet coffee growers in developing countries. An ITC project has enduring success.

    In October 1999, 315 coffee growers from different regions in Brazil participated in a "Best of Brazil" coffee contest. A jury of experienced "cuppers" - professional coffee testers - selected the ten best coffees on offer at an Internet auction. A total of 900 bags of 60 kilograms each were available when 23 bidders from four continents joined a 48-hour online auction in December 1999.

    All parties involved with this experiment were delighted with the outcome for two main reasons: the technology worked, and prices were considerably above expectation - some coffees fetched more than double the expected price. Those behind the experiment therefore decided to develop it further. They created "Cup of Excellence", a regular competition, which is run today by the non-profit organization, Alliance for Coffee Excellence.

    Learning through experience, organizers made various modifications: they increased the number of coffees offered per auction from ten to around 30; and reduced the online bidding period to around five hours. At the expiry of this period, the auction closes one minute after the final bid, to mirror, as far as possible, the excitement and pressure of a real auction.

    Brazil has hosted the Cup of Excellence auction every year since 1999; El Salvador, Guatemala and Nicaragua held similar auctions, and other countries are likely to follow. Bidders can view pictures and access information about each producer at the Cup of Excellence web site (http://www.cupofexcellenece.org).

    Cup of Excellence is a strong marketing tool for small producers who have come out of anonymity and not only gained fame but also obtained better prices for their coffee. Equally important in an oversupplied market, it shows producers that they can fetch higher prices on the basis of quality.

    ITC was Executing Agency for the Gourmet Coffee Project (1998-2000), which was financed by the Common Fund for Commodities and supported by the International Coffee Organization. Countries participating were Brazil, Burundi, Ethiopia, Papua New Guinea and Uganda.

    For more information, see http://www.cupofexcellence.org or contact Morten Scholer (scholer@intracen.org), ITC Senior Market Development Officer.