The Exchange: Episode 1 - The Coffee Roaster & Green Buying
- How old was Todd when Mark started roasting?
- Buying too much coffee (and then what?).
- Total costs beyond price per pound.
- The value of running out of coffee.
- Changes to spot buying in recent years.
- Patience and the pressure to Buy Now!
- Eating until you're 80% full.
- Doing what you say you're going to do.
- Communication and calibration with your trader.
- Mark's $21,000 mistake.
- Cupping scores, the meaningful and the marketing.
- SAS contracts, how to use them and how not to use them.
- Timely decision making.
- Trader's as used car salespeople.
Available on iTunes and Full Transcript Below
The Exchange is Presented by Olam Specialty Coffee
Hosted by Mark Inman and Todd Mackey
Produced by Mike Ferguson
Guest Segment, Rob Stephen
All music is available and used under Creative Commons*:
Opening Theme, Strong Black Coffee by Jared Mees and the Grown Children *CC BY-NC 3.0
Closing Theme, I'm Going for a Coffee by Lee Rosevere *CC BY 4.0
Rob's Segment Theme, Cup of Coffee and a Piece of Pie by The Ribeye Brothers *CC BY-NC 3.0
Talk to us!
TheExchange@olamnet.com
Mike Ferguson: Hello, welcome to The Exchange, podcast presented by Olam Specialty Coffee and hosted by Mark Inman and Todd Mackey. I'm Mike Ferguson. You are on the ground floor. This is season one episode one of The Exchange. Mark and Todd have a conversation about discipline and best practices around buying green coffee. Our hosts are a continent apart, so at the mercy of the Skype god, but it's a great conversation filled with insight for new green buyers and even old hand. Now, Mark and Todd.
Mark Inman: Welcome to The Exchange. I'm Mark Inman, director of sales for North America for Olam Specialty Coffee. With us is, of course, my co-host, Todd Mackey. Todd?
Todd Mackey: Hey, everyone. Welcome to The Exchange. Glad to be getting into our first episode here. I've handled training and also sales for Olam Specialty based out of our northeast Providence, Rhode Island office.
Mark Inman: One of the segments we want to start out with each episode is what's in your cup. Todd, what are you drinking today? Tell us a little bit about it.
Todd Mackey: I'm drinking a coffee that is named for the municipality where its smallholders contributing to the lot are based. This coffee we're calling Union Cantinil. It's a Huehuetenango coffee. We're pretty happy with the arrivals. We've got three to four containers above the two, I believe, we brought in last year. Just a smallholder community lot. And it's crushable. Subtle notes of tropical fruit, chocolatey. To me, a definitive drinking coffee opposed to a tasting coffee. Something you want to actually drink in volume. Hence the refill post lunch here on the East Coast, about 1:00 PM Eastern. That's what I got. What do you have going?
Mark Inman: Well, I have actually been interested in all of the coffees coming off this farm, but today I'm doing the Zambia Black Honey. This is, I actually prepped ahead here, PC12603, which is still available on the West Coast. The East Coast lot of this has been sold out. I have really liked the Zambia washed, both the Mafinga and Isanya, coffees coming off of those farms. This year, they did a natural and a black honey. Both, I think, are equally good in their own ways and today I decided to brew that black honey. Lately, the trend for me is sweetness, getting sweet coffees and rich and round coffees and less on the acid side of the spectrum. This one delivers it in spades. Very caramel driven, sweet. Almost like a [00:03:15], it's got a thickness to it. Definitely apricot, peach driven in the flavor. Real solid sweet coffee. I think this would make a fantastic iced coffee as well, but I mean, God, what an amazing grouping of farms happening in Zambia. Pretty happy with these.
Todd Mackey: Awesome.
Mike Ferguson: Today, Todd, we wanted to talk about buying strategy based off of an article that I had written quite a while ago for us, and something that both you and I have talked about extensively at trade shows, which is both of us having a background in roasting and buying as well as selling green coffee. Things we've learned, mistakes we made when we roaster, tips we would have for the incoming or newer roaster on what not to do as well as what to do. Todd, give me a little bit of background on your buying experience and roasting and, I don't know, maybe a little tale of where you went wrong in your past.
Todd Mackey: Yeah, sure. I mean, I came into the industry as a barista and that quickly led me to work for a regional wholesale roaster, where I was doing everything from production to sales, support, and training as well as quality. So my role there was really focused on liaising around quality in our bookings and commitments. And certainly handling small to mid size roasters. In our business here at Olam, I run into a lot of things that bring me back to those times. Big key word for this episode is discipline. I think your piece, reading back on the blog post that we're sort of paying homage to, that really comes up in a number of ways we'll get into, but there's also as lot of ways for the new buyers to kind of think forward. Think and project maybe not even so much where you are, but where you want to be around building good disciplines to get the type of results from a supplier like Olam that you hope.
Mark Inman: Yeah, and I think one of the things that took me a while to learn early on in my roasting and buying career was that I was responsible for the largest expenditure of the company. When a lot of us get into green buying, we want to be more of an artist and we want to find amazing cupping coffees and coffees that blow our minds and less that of what am I using this coffee for, what's the utility of the coffee, and does it fit within the price point that we're going to be selling the coffee for? A much more disciplined way of looking at buying rather than just buying for the sake of finding great coffee, and that took me a while to figure that out. My story was a bit unique because back when I started in roasting and buying it was 1990. You were probably in junior high then, or something like that. I was a young, eager buyer.
Todd Mackey: I wouldn't go that far.
Mark Inman: No? Not that far?
Todd Mackey: I guess you're right, actually.
Mark Inman: Yeah. I was running a company that did 100% organic coffee. That time in coffee there wasn't really a lot of supply, and if the supply was available, you had to act quickly. That easily laid the groundwork for making very poor decisions. Probably one of the largest mistakes I had made was buying bigger than my company had the ability to use. It was more the idea that if I ran out of something I was in real trouble. It was just about securing supply so we could roast another day. What I didn't think about at the time was the amount of carry costs and storage costs and financing costs that were associated with doing that. At the end of the day what that equaled in cost to the overall product, it wasn't just the price per pound I was paying, it was another bill I received months later that made the difference between making a profit and taking a loss. That was probably one of the, I guess the largest lessons that I could teach anybody is understand the total cost of the product that you're buying over the long haul.
Mark Inman: If you're buying coffee and you're not going to use it for six months, understand that any importer that you're going to buy this from is going to have storage and financing fees because storage isn't free. They have to pay warehouse space. If you're not paying for the coffee up front, they're actually financing the cost of that coffee for you, and they have to charge you a fee associated with that financing. In some cases, what I end up seeing more times than not when I was buying, and I certainly see it a lot with customers I work with, is that in the long run what ends up happening is that when they do this kind of overbuying, at the end of the day they're dealing with stale coffees because they've been letting them sit too long and they've paid way too much for that coffee in the long run, so it actually defeats the purpose of buying that great cupping coffee because you only get that experience for the first few months.
Todd Mackey: Yeah and, I mean, obviously you get into dangerous territory if you're in wholesale and you're in small margin business. You know, if you're aiming to grow volume by cutting your margins way down, you have this sort of moving piece of your cogs that's only buildings with time. I guess one thing you're getting into, which is interesting to me, especially being so drastically your junior here, joking of course, but the pressure you're talking about in terms of pulling in coffees that are hitting the specs quality wise you need, obviously being an organic roaster and focusing on that segment, that space in terms of what's available spot and forward now has grown dramatically.
Mark Inman: Yes.
Todd Mackey: Additionally, good coffees on the spot are much more available than they've been. I guess I'd be curious to have you explain a little bit more from your perspective over the last 20 years how that's changed because I do think even when I was working for roaster, we found much less really solid coffee available just ready to go. Spot Oakland or Spot New Jersey, what have you.
Mark Inman: Right.
Todd Mackey: I think that there is a certain pressure that roasters would benefit to kind of take off their shoulders in having to decide so soon or take the first best thing in knowing exactly this kind of balance of price to value.
Mark Inman: Well, I think what's changed, I mean I used to say this a lot, customers I was selling coffee to as well as in presentations I used to give, that back in the early '90s, especially in organics, the bulk of the availability was Sumatra, Guatemala, Mexico, and Peru. If I were to compete with somebody that was not doing organic exclusively, I felt like I was a painter that only had green, orange, and blue as my color palette and I had to make the same amount of art that they had to make. It was very difficult to pull that off. Slowly, as the years progressed, new countries were starting to get certified and learn about more sustainable types of coffee farming, until really, I think the peak was around 2000, where there was a massive interest in sustainable farming and a lot of government assistance and a lot of project work going on.
Mark Inman: From that, you've just seen it expand and now you can find organic coffee in just about every country in the world. But, what I think the dynamic has shifted to now is either microlots that have become all the rage, where you as the buyer want to own this certain microlot and you feel the pressure that if you don't act quickly, relegated to second, third tier coffees in your mind that are out there. I think that pressure creates the same type of mistakes in buying that my sense of scarcity of organics applies, because I think the myth of these certain microlots, if you miss out the only great good coffee are going to get out of the country is just simply not true. The work you've done in Honduras and Guatemala, you guys are finding tons of great microlots. There really is not this urgency to buy or miss out because there's plenty available.
Todd Mackey: Sure, sure. Yeah, I mean I think there's a push and pull to it, for sure. I think you're absolutely right. The amount of potentially great coffee available on the origin side is fantastic. I mean, there could literally be a deluge if the capacity building commitments and the efforts remain and ramp up. I mean, there's no limit to what you can do. Right?
Mark Inman: Sure.
Todd Mackey: It's a matter of-
Mark Inman: Still, even if that were true, this deluge would still not meet the global demand for better and better coffee.
Todd Mackey: ... Sure.
Mark Inman: I think from a farming perspective, if you think oh my God, if I start jumping in now by doing more high end microlots I'm going to miss the wave and all these coffees are going to be dirt cheap. I don't think they're ever going to be dirt cheap, but on the other hand there's not an urgency to make a hasty decision from the buyer or selling perspective. Where does that pressure come from? I think it's internal. I don't think as a buyer I've ever had an importer or a farmer giving me the impression that if I didn't act quickly I was going to miss out. I think I just somehow felt that that was always going to be the case. Now, working with buyers, [inaudible 00:14:01] from microlots or specific coffees, there is also that internal pressure of if I don't jump on this now I'm going to make a call next week and the coffee is going to be gone. I've never seen that to be a problem.
Todd Mackey: Sure, but there are circumstances where it might. Right? I mean, example, I'm a roaster who I'm selling a coffee year on year transparently as itself, whether sold on the farm name or the farmer [inaudible 00:14:36] themself and the time comes to make the booking and, as we often joke everything is for sale until it's sold. There does come a time, even as a point of discipline, to know what you need and what you want, what you can sell, and ultimately, most importantly, what your customers want and actually say with clarity and a strong forecasting place this is what I need to commit to. Right?
Mark Inman: Sure, yeah.
Todd Mackey: I think that's what I mean to get at, where there's a bit of push and pull to it where quite literally, especially if you're talking hey I stumbled upon this fantastic spot coffee and there's no plans for a replacement to come in within the crop cycle, you should kind of, before you go fishing, you should do your math. Figure out what you actually need for this slot in your program and make the booking before you have to replace it with something that's maybe not priced where you need it to be or doesn't fill your objectives for the product. What you're thinking about is much more the case and ultimately my experience agrees entirely. The good decision is the one where you measure a few times. You take your time. Decisions made in haste don't pay.
Mark Inman: Yeah, I do think when you get to the point if you are offering a certain farm or a certain farmer or a certain microlot seasonal, you would say, you do have to act when the coffee becomes available. I don't think you can sit on your hands and wait for the market and do a lot of these things. If you know you need so many bags of this a year and if the bags are finite, then you have to pull the trigger and do this. I do think that that has to happen and that there certainly needs to be a certain discipline there if you want to maintain that. I do not think, however, you need to necessarily go crazy here, because I think that if any kind of product that you may be into, and I have certain, a lot, of products I like to buy. If I find that something sells out because I, as the customer, didn't come in, then it adds to that exclusivity or desirability.
Mark Inman: As a roaster, I always tell people eat until you're 80% full. I learned that, it's an old Buddhist saying. Don't buy necessarily over what you need, or don't buy what you're projecting you need, because many times we all tend to overproject our needs. Unless you have a very, very accurate way of forecasting. Because we could always find you a fill. But, if you do sell out, your customer is not going to be upset with you. They're going to feel like they missed out, and they're going to come in earlier next year. That's why you have limited edition sneakers and limited edition pressings of vinyl, because it creates demand and height and a feeling of something being truly special. I've also seen the flip side, where a customer says yeah, I need this specific farm each year and we book it and then I say hey, we have it. So many bags are available. All right, well let me think about it. You don't hear from them for a month, and then they come back and what they needed you only have about 30% of that. That's just, to me, undisciplined buying.
Todd Mackey: Sure, sure. Absolutely agreed. I mean, I feel like even just the baseline, the communication clearly and with timing considered hey, I'm going to be in the market for X, Y, Z when the time comes. Even just having that in my pocket enables us to do so much more for a customer to support their business when it comes to buying on type or target quality, or very specific farms or beneficios coffee. Right? I love this eat until you're 80% full mantra because it makes so much sense. So many of us in the roasting business are finding that you have to have new, different, exciting. Right?
Mark Inman: Yeah.
Todd Mackey: To me, one of the aspects of getting back to the spot being full of great coffee, more or less at any given time leaving that 20%, or if you're growing above and beyond expectation, great, even more. It actually allows you to kind of dip a toe, if you will, into the new origins or processing, that you can pick up something like this black honey from Zambia. That is a particularly interesting way of looking at that uncovered upside. It gives you a chance to be more creative and opportunistic, whether it's quality and/or just base value against price. Right?
Mark Inman: Sure, sure.
Todd Mackey: Which is cool. So, that's awesome. I mean, let's shift it here and let's talk you're already long. You have well beyond what you need within a given crop cycle or within your given forecast. What do you think the disciplined buyer, and obviously a key function of a buyer, whether they're buying the coffee, roasting the coffee, brewing the coffee or they're buying it and filling silos, either literally or figuratively, for the roasting and production crew to then put those coffees out, what is the disciplined response when you find you're behind your forecast and you're sitting on a position? What do you recommend?
Mark Inman: Well, there's a lot of things I recommended when I had my roasting company. I always wanted to befriend and ally the other roasters in the area. That served me a couple purposes. One was that a lot of us were doing different things, so there was real no overlap or threat of competition. Secondly, we could help each other out. We could either save on trucking because we could merge stuff and [inaudible 00:21:04] and do it together, or if I had an overage, I can see if they wanted to buy some of the green. Did they need it because I had too much? Or, if I was running low on something that was exclusive, did they have it, I could buy it from them? Having that regional relationship I think is very good to have, especially if it's in short driving distance for picking up and selling. Leaning on your sales staff, can you accelerate this? Can you put it on sale to move it faster to roast it and still make a profit? Is there a special or can you find a new customer?
Mark Inman: Something in that way, to where you're actually just accelerating your run rate of the coffee. Finally, it's to find another alternative use for the coffee. Would it serve a purpose in other parts of your blend line where you are using more volume? Does it meet the costing and the price points to work within that? Does it meet the taste spec to work within that? Although, I want to back up and say what I hear a lot of people doing is they just take all of their mistakes, overages, coffees that they bought incorrectly and just always French roast it. You hear that all the time. Well, we'll just French roast it off. And then, we wonder why nobody likes dark coffee.
Mark Inman: Because dark coffee literally becomes the soup of the day of blends, and that's not how you should look at coffee. You should put the same care and attention into your dark roast that you would put into your light or medium roast. But, a lot of these coffees that we have that are single origin and are a little more focused type of coffees within our lineup can serve their purpose within their blend line if we buy thinking of could I put this here, here, and here if things don't work out? It allows you to actually have an out for yourself. Obviously, the best way to do this is to try to get your sales staff to move it quicker. Put it on special, or if you sell to grocery, putting it on sale, because everyone loves a sale or a promotion, to get people to buy more. And then, that network. Having a very strong network locally or regionally is probably the best thing you can have in your business model for many, many reasons.
Todd Mackey: Yeah, I mean there's a home for every coffee, right, we always say.
Mark Inman: Of course.
Todd Mackey: It's coming up with some sort of utilitarian treatment in real time before you get into a place where you're trying to save skin with a coffee that was real lovely at one point. You're grossly discounting it trying to put it in something, by the time you actually get to pulling the trigger. I mean, there's a time to take losses early on, when you still can save your shirt or save some skin or whatever you call it. I think that having the discipline and the foresight to actually talk about that proactively is a key discipline when you're talking about supply chain management purchasing and just running a sound business in general. You could work a whole year and you have just one drain at the bottom of the bucket, and it washes out anything else you could've accomplished, which certainly if you're a missional or vision driven company, your [inaudible 00:24:43] vitality is how you get to all the good stuff.
Mark Inman: Well, and it certainly points to the idea of not going too obscure with your buying when you're buying in quantity because if you do overproject so unique and so different of a profile, you're stuck. That's certainly happened with me. In one case, I took a $21,000 hit because I could not use this coffee elsewhere and I sat on it for three years. I mean, $21,000 for a new, smaller wholesale company is a marketing campaign, it's a website, it's a couple origin trips. It equals a lot. It could've been Christmas bonuses for everybody in the warehouse. That was a major mistake. Every month that you're having that coffee unused is a month you're paying an additional carry charge that adds up very quickly.
Todd Mackey: Yeah, and let's shift again.
Mark Inman: Okay.
Todd Mackey: I mean, one of the things that, to me, reeks of great discipline is the whole approval process when people book out coffees, especially looking for their top lots in advance of landing. You have [inaudible 00:25:59] contracts, there's going to be timely feedback, in three business days ideally, and that we're going to get people calibrated, where over time we're selling an 86 plus washed Ethiopia, for example. It's approved and we hear back and boom, boom, boom everybody is feeling good. But, I mean, how often do you run into this? I feel like I see it often where for the hope of a 90 a buyer is rejecting an 87 and ultimately, after we shuffle through and try to help piece things together, we end up sort of having to agree on an 85. Which, at the end of the day, to me, that super top echelon of coffees is extremely hard to predict. It's a moving target.
Todd Mackey: I mean, they're snowflakes. You look at one moment, they're there and beautiful. You look the next and they're gone, for a myriad of reasons. I'm curious, do you feel like you see that? What is your [inaudible 00:27:00] to a buyer like that? I mean, it's heartbreaking from my side to see someone end up getting a more average quality coffee from this top tier application, when really they had first crack at it. Of course, if the rejections come flowing in and calibration can't be found, obviously we have to kind of ease back on even offering that type of booking opportunity in advance of landing, just for the fact that we can't make perfectly sellable coffees unsellable for no good reason. Right?
Mark Inman: Yeah, I think that the more seasoned the buyer, the less risky that business becomes because buyers that have been doing this for a while understand that that snowflake is that moving target and there's a certain leeway with sometimes the coffees actually improve on their way over here or sometimes they degrade. I think where this becomes a [inaudible 00:27:58] issue is when somebody is very new to the buying position that this becomes a problem. I guess I first, I mean we'll get to this I guess in a minute because I do want to back up a bit, is explaining what SAS, NANS means for those listening who do not understand that term, and we can do that.
Mark Inman: But essentially, where this becomes a problem is calibration from the buyer to the seller. Am I calibrated with the customer? Or what the scale that people are dealing with. I mean, when the lot of buyers that are newer, younger, or do a lot of reading of trade magazines, they'll say well we only buy coffees that are 94 plus in [inaudible 00:28:38] score. They're dealing with the scale that you see in trade magazines or consumer publications, not the traditional cue system or the established SCAA cupping system, where if you look at [inaudible 00:28:52] coffee, and 85 or an 87 would be an inferior product, but in trade 87 is fantastic. When I deal with that type of a client, I always say take your score that you're looking for and shave 10 points off of it, and that's the score that the trade is talking about. When you're marketing coffee to the consumers, 92, 95, 97, those are scores you hear all day long, but nobody is going to write a contract for a coffee at 97 plus landed cup score.
Todd Mackey: Yeah, I mean, I think you're right to get into SAS, NANS. Do you want to give an outline of how you present that to a [crosstalk 00:29:34]
Mark Inman: Sure. SAS, NANS and SAS replace are the two greatest tools in your tool chest.
Rob Stephen: Hey, everybody. It's time for the lowdown with Rob Stephen. This is the segment where I drop into a conversation that's already in progress and give my completely unsolicited input. I heard Todd and Mark talking about SAS contract and I decided to fill you in on my thoughts on SAS contracts. SAS contracts are a tool that roasters can use to sort of jump the line and hold coffees that they would like preferred access to or to hold a price at a time when coffee is not available and have access to it at the quality that they want. SAS contracts are contracts. It's a mechanism for buyers to buy smarter and better. As with any contract, they have obligations and rights and responsibilities, so let's talk about those for a second. There's two types of SAS contracts. SAS stands for subject to approval of sample. That means the contract is going to go one way if the sample is approved and it's going to go one way if the sample is rejected. So, let's talk about that.
Rob Stephen: One of the flavors that we have is what we call NANS, or SAS NANS. NANS stands for no approval, no sale. This is a contract that you would do to hold coffee while you're waiting for a sample. The most typical application of this would be you see a coffee on the website that you would very like to have, at least based on the description. There's only a few bags left. You have a strong idea that you want them, but you want to taste it first. So, you give your trader a call and you say I'd like to do a SAS, NANS, or SAS NANS contract on this coffee. What will happen then is the trader will write that contract, that will hold the coffee so that it won't be sold to anybody else. They'll then send you a sample and you'll have three business days to approve or reject it. If you approve it, the coffee is yours and the contract is executed. If you reject it, the coffee is put back into the pool for sale and the contract is canceled. This helps an importer by giving them another tool to sell coffee to people who want it and it is something that really helps roasters by getting access to coffees and still allowing for tasting of the coffee.
Rob Stephen: What often happens is people will see a coffee that they like, they'll order a sample, and in the three days of transit between the sample getting to them and them roasting it and cupping it it gets sold out, and then they're disappointed. This is a way to head that disappointment off. This is something that we do with people that we trust, people that we're calibrated with. People that we know that if we hold the coffee for a few days and don't sell it that they are going to take a good shot at it and that they're going to give the coffee a fair chance, and that they're most likely to buy it if they like it. We do those a lot. If you're not doing that, that's definitely something that you should talk to your trader about, especially if you've experienced the disappointment of having a sample sent to you, cupping it, loving it, and then finding out that it's gone.
Rob Stephen: The other way that we can do these SAS contracts is on a replace basis. We call those SAS replace. That is usually done to either hold a price or to hold a commitment for a type of coffee, where the coffee is not very unique and it's got a lot of different range of acceptable qualities or cup profiles, and so this is broader. This is usually done on a larger volume basis. For example, we might say we're going to sell a Kenya AA. We have six or seven lots, you know that you want one. We'll try this one and then we'll try that one and then we'll try this one, until you get one that you like. What happens is we send you a sample. If you approve it, it's yours, contract is executed. If it's not approved, we can send you something else. And we'll keep doing that until you approve something. Basically, because it's not a no approval, no sale contract, you've made the commitment and now it's just up to us to find coffee that matches that commitment. That's something that might have a more narrow application, but it is also extremely useful tool.
Rob Stephen: We write both of those contracts on a regular basis, and if you're not using those contracts you should definitely talk to your trader because those are things that really separate roasters getting good coffee and getting great coffee and having access to coffees that other people don't have access to. Always important to understand how they work. Talk to your trader in depth. We have some blog posts on how SAS contracts works. Traders are all very versed in it. It's important not to abuse them. You can't use it to squat on coffee, you can't use it to hold coffees just so that somebody else won't get them, or to hold a bunch, knowing you're only going to pick one. You should really only use them for coffees that you know you're going to buy as long as they cup out. I think that an SAS contract should be an essential part of what you do, and if it's not, give us a call. Let us help you out. Until my next interruption, this has been the lowdown with Rob Stephen.
Mark Inman: ... first started roasting, I looked at importers almost like used car salesmen. Like I want to interact with them as little as possible. I have this fear every time I get on the phone I'm going to be hustled. Ultimately, I know what I want. I just don't want to have a constant sales pitch. What I ended up learning is that instead of me being one buyer, if I had really good relationships with importers, all of a sudden I became five buyers. I had five people at any given time cupping at their office every day and thinking about wow, this may work for Mark, and giving me a call. Which is an unbelievable benefit to have, and that benefit happened because I had open, clear communications with some importers.
Mark Inman: I gave them a very clear idea of what I was trying to accomplish as a business. The types of coffees that interested me, what I was willing to buy, what price points I was willing to look at. It gave them clear marketing orders, if you come across this and you think it's perfect for my company, by all means give me a call. That type of relationship, I mean, you can't put a price tag on it. Any buyer that is going to survive in this industry has to have that type of relationship with at least one importer. Obviously, the more importers that you have that type of relationship is going to be better, but I mean, how awesome is it to have somebody that can call and say hey, I found something that's really perfectly tailored for your company, that I wouldn't have just stumbled across myself.
Todd Mackey: Yeah. No, I mean, I think I love what you get into there, because I have this conversation. What feel like pretty frequently, we're really just hocking knockoff watches or something. Which, let's not kid. I mean, you certainly need to know what you should be spending, what you can be spending, and know the quality. That needs to happen for you to know who you want to align with. But, I'd be devastated to learn that someone who I trust feels like I forced a coffee on them that is totally unsuitable or had some grossly inflated price. You know, we don't win this game by making sale. Right?
Mark Inman: No.
Todd Mackey: I mean, there's no retirement to the beach when we clear a pallet. The way we win is when the businesses we're doing business with win and grow and we have career long relationships that we can see each other's shared success. But, I do think to establish that feeling that you have when you're discussing things out and you're like man, if it didn't hit, it didn't hit. We don't have to belabor the point. Let's not waste the time. Let's move on.
Mark Inman: Well, at the end of the day, for all of us, this is a relationship driven business with the coffee farmer and the buyer or roaster or a importer and a roaster. Those that last have great relationships and strong relationships, and deep relationships. As an importer, I would rather have five clients that I talk to weekly that I really understand what they're trying to accomplish and they understand my ability to find them certain coffees than have 200 customers that I talk to infrequently and they come in, buy a pallet, and I never hear from them again. At that point, I may as well be selling t-shirts. Each person in the link of the chain has strength that they can help you with, and in my experience in this industry if I can help somebody improve their business or get one step better as a company, I have an immense feeling of accomplishment at the end of the day for me.
Mark Inman: That is why I'm in this industry. If it was just flipping bags, I would have lost interest in this career path a long time ago. If you're a coffee buyer, go find those relationships. And they may not all work. You have to find a person that you connect well with and you can speak with and understands or has a desire to really understand what you're trying to do. [inaudible 00:39:31] there looking for coffees and looking for opportunities to help you better yourself. All that cost you is just a normal transaction that you're going to do anyway, so if you actually spend the time to communicate exactly what you're trying to accomplish, you're giving somebody clear parameters to go to work for you. If they're willing to do that, that's a match made in heaven.
Todd Mackey: It takes energy, it takes some repetition in some cases. You know, not everybody is for everyone. The same way as in anything. I think that it pays to get to know people in the business and the success, most importantly, in the business for both sides come with that. Lots of understanding on both sides. We're sort of cruising into a landing here, but I have one more item to kind of riff on. I think it'll be fun. Obviously, just knowing the nature of our work and what we're managing day to day, there is a certain element of like well, hey, cool. Beyond just the core competencies that we would advocate for, for a buyer to build and really prize within themselves and their peers, there's got to be a certain profile of a buyer in terms of key behaviors that just make it really easy to crush it with them. I think it's a nice way to sort of finish the conversation. If you had to outline in behaviors the perfect buyer or the buyers that you really sway most to work with, what are the things that are hallmarks of the way that they handle themselves?
Mark Inman: Well, for me I think the top three skillsets that I look for, the biggest one is the ability to clearly communicate your needs. If you can do that and I can receive that message, I understand the job I'm there to do for you. With any client, I always take an hour, kind of introduction phone call, to get a clear understanding of what they do. Secondly, it's an ability to make decisions. If you tell me find you something specific and I find it for you, I need to know that you're ready to pull the trigger on it because there's [inaudible 00:41:51] amount of work that goes into finding things for you. The third one, the amount of customers that will say hey, I really need this coffee. Find this coffee for me or let me know when this coffee is available, and then I find it and I email them and I get nothing for the next two months of auto responses, so and so is out of the office, on the road, traveling, at an event, I start to wonder well, what is your job? Are you the buyer or are you the traveler for the company? Because if you're not available to buy the coffee, to taste the coffee, to give feedback on the coffee, then you need to delegate that task to somebody that then becomes my point person. If I can't regularly communicate, then that relationship would be impossible for me.
Todd Mackey: I blame my own generation buyer for creating that dynamic because there was a certain era where we prided ourselves on the amount of days we were able to travel to origin. It was almost a I traveled for 400 days last year to origin, and I traveled 500 days. Meanwhile, you're wondering well, how was coffee bought and sold while you were on the road? Or myself, I was trying to learn and didn't realize that I was hurting myself.
Mark Inman: How can we find great coffees? What kind of prices and cost to value management do we need to consider? Also, what are the goals? There are ways that our experience as small business owners in the roasting space, working at different parts of coffee that comes to bear when it comes to strategy and cash flow management and how to handle our position and far beyond that typically that comes up within the first hour, the 30 minutes or 60 minutes. Beyond that, I absolutely buyers with a willingness to not only have that regular check in, but also have the regular structured meeting.
Mark Inman: Sending forecasts ahead that I can view to where I can look at and can share our position in a more sort of aggregated way. Give a broader picture. Make a more sort of robust argument for what I might recommend. Giving me that opportunity, for me, is really satisfying. Being able to come in in a much more thoughtful way with my recommendations for what business we do and how is awesome. Getting it in advance of sessions where we might organize ourselves to do a big piece of business, and then the ongoing status updates. Just reaching out any forecast or changing. Hey, this is up, this is down. What can we do here? How can we be creative? I'm still thinking about that thing. Any progress on this? That stuff, I know a lot of people thoughtfully avoid at times, where it's like there's a time to reach out and a time not to. There's a nice balance that can be struck that I really enjoy. Here we are at the conclusion of the first Exchange episode. How do you feel like it went?
Todd Mackey: I think it went really well.
Mark Inman: As I expected, given that you and I would be working on this together. I look forward to the future episodes. I thought this was a great subject to start out with. It's something important to both you and I, wanting to actually help customers improve the way they do business. For our inaugural episode of The Exchange, I think this has been a good episode.
Mark Inman: Yeah, I'm stoked.
Todd Mackey: I have to mention, I'd be remiss if I didn't mention, I was a huge fan of your time on Portafilter podcast, so to be here now and to kind of break the ground on this new thing is not only professionally exciting, but personally exciting as well. Certainly appreciate joining you here, Mark. Glad for everyone who is going to take this in. We welcome you to stay with us. We'll be back soon with some more thoughts to chew on. Thanks very much.
Mark Inman: Thank you very much. Thanks for tuning in to The Exchange. Look forward to talking to you again soon.
Mike Ferguson: You've been listening to The Exchange, presented by Olam Specialty Coffee, hosted by Mark Inman and Todd Mackey, and produced by Mike Ferguson. Our guest segment in this episode featured Olam's director of development Rob Stephen. Our opening theme was Strong Black Coffee by Jared Mees and the Grown Children. Right now we're listening to I'm Going for Coffee by Rosevere. Both used as part of creative common. Thanks for listening, and we'll see you soon for episode two of The Exchange.
