Monday, December 4, 2023

Forward Contracting - Easy and Profitable!

Forward booking can be a practice that lets every member of the supply chain,
including the producer, be proactive rather than reactive, thus creating resiliency that is a core value at Artisan.  
Most of Artisan's coffee is sold via fixed price, forward contracts with roasters.This means the rosater signs a contract with Artisan before the coffee has shipped. 

Advantages to the roaster include: securing good coffee and being able to plan ahead for its physical arrival and the impact of the payment on the green coffee budget. But there are some disadvantages. Making a projection about needed volume can be difficult. We've created the following Pros and Cons table. What would you add to this?

Table: PROS and CONS of Forward Contacts

The contract has quality terms that must be achieved at the pre-ship sample stage and on arrival. Price and terms for payment are also defined. We typically start signing contracts for Ethiopoia in January and go through Mardh. For Rwandan coffee, we contract February - April for coffee that arrives October - November.

Our minimum is one bag or 132LBs.