In specialty coffee, direct trade has long been framed as the ethical choice for roasters to support producers while ensuring quality and transparency. 

However, following a record high for global coffee prices in February 2025, what was once viewed primarily as a “social project” rapidly became an essential, smart business strategy.

For roasters, the traditional approach of purchasing coffee through importers at whatever the market demands became increasingly unsustainable. Without more control over supply chains, their vulnerability to market fluctuations was exposed.

I spoke with Dale Goulding at Green Coffee Collective and Raphael Studer of Algrano to learn more.

You may also like our article on why direct trade is about more than ethical business practices.

As coffee prices rise, direct trade becomes a financial strategy

Coffee prices reached historic highs in 2025, placing unprecedented pressure on roasters’ margins. This price volatility is unlikely to be a temporary blip; climate change, the diminishing of suitable growing regions, and increasing production costs suggest that elevated prices may become the new normal. 

Adding to these challenges, the implementation and uncertainty over US tariffs on certain coffee-producing regions have further complicated the cost equation for many roasters. These combined pressures are forcing a reconsideration of sourcing strategies across the industry.

“Roasters today face growing challenges driven by market volatility rather than simply high prices. Fluctuating coffee prices, shifting exchange rates (especially between the Euro and the US dollar), and the new US tariffs on green coffee imports create persistent insecurity. These strategies make financial planning extremely difficult,” explains Raphael Studer, the CEO of direct trade platform Algrano.  

“The larger the share of green coffee in a roaster’s earnings statement, the greater the impact on margins and overall business stability,” he adds.

When coffee prices surge, the value of established direct relationships with producers becomes apparent. Working directly with farms or cooperatives offers several advantages, including price stability through longer-term contracts, improved forecasting ability for future contracts, reduced vulnerability to market speculation, greater control over quality specifications, and opportunities to secure favourable prices before the market shifts. 

“Direct trade offers roasters valuable benefits like transparency, traceability, and relationship-building. Not only because they value these elements personally, but also because consumers increasingly expect a clear story behind their coffee, governments in Europe are pushing for more transparent supply chains, and producers themselves are eager to build direct relationships,” explains Raphael.

The valuable role of intermediaries in the coffee trade

The path to true direct trade, however, isn’t without its complexities.

Despite the appeal of eliminating middlemen, it is important to recognise that quality intermediaries still provide value in the coffee supply chain. The notion of roasters travelling to origin and personally selecting coffees directly from farmers has become somewhat romanticised in third wave coffee culture.

The logistics of international trade, financing, quality control, and shipping make truly direct relationships challenging for all parties involved. Even companies proudly advertising their direct trade credentials often rely on specialised partners to manage crucial aspects of the coffee journey.

“Direct trade, even when facilitated through managed platforms, isn’t a silver bullet,” says Dale Goulding, the co-founder of small-scale direct trade platform Green Coffee Collective. “Making a connection with a producer is only the beginning. Managing that relationship across time zones, languages, harvest schedules, logistics, and payments takes significant time and resources.

“Most roasters don’t have the bandwidth to handle all that consistently, especially at scale. There are also additional risks involved, including quality, delivery timelines, and volume,” he adds. “What looks great on paper can become a huge operational burden in practice. That’s why the strongest supply chains often have a mix of direct collaboration and trusted partners who help manage the complexity behind the scenes.”

The right kind and number of intermediaries can add immense value to roasters’ operations. Good sourcing partners help manage quality control, logistics, pre-financing, and communication, all of which free up both ends of the value chain to focus on key tasks.

Managing uncertainty in a consolidating green coffee market

A significant amount of consolidation is occurring in the green coffee trade sector. Mergers, acquisitions, and bankruptcies have reshaped the traditional coffee import landscape, creating uncertainty for roasters who rely on these channels. 

When an importing partner suddenly changes ownership, shifts focus, or exits the market entirely, a roaster’s carefully calibrated supply chain can be thrown into disarray. In this environment, having direct producer relationships provides a crucial element of stability.

“Consolidation often brings standardisation, longer lead times, and less room for flexibility or innovation. Roasters might find fewer options, and producers can struggle to get feedback or fair prices if they don’t meet strict volume or specifications requirements,” says Raphael.

“That’s why we prefer the term transparent trade over direct trade. The goal isn’t always to cut people out, it is to make sure everyone involved in the chain is visible, accountable, and working towards the same outcome,” he adds.

Investing the time and energy in building the direct trade relationships helps roasters create a buffer of sorts. They can maintain access to the coffees their business depends on, despite market uncertainty.

As direct trade increasingly proves its worth as a cost-management strategy, it’s essential to remember its origins. The direct trade movement originated as a means to ensure that producers received fair compensation and recognition for their quality, not merely as a clever business model for price stability.

“The appeal of direct trade isn’t just about storytelling. In today’s volatile coffee market, it can be a practical sourcing strategy,” Raphael says. “When roasters have a long-term partnership with the producers, they are more likely to secure consistent quality and pricing, even when the market fluctuates. Forecasting and budgeting become easier, and both sides can plan collaboratively for yield expectations, processing improvements, and even pre-harvest financing.

“When you can confidently stand behind the transparency of your supply chain, you are not just telling a good story; you are also building trust.”

The future of direct trade

As coffee prices remain volatile, more roasters are expected to adopt direct trade as a core business strategy, rather than just a marketing gimmick. This shift represents a maturation of the specialty coffee sector, where values-based practices are increasingly aligned with sound economic decisions.

For roasters, this means the investment would go beyond just telling a compelling story to consumers; it would be about creating a more resilient and adaptable business model in an increasingly volatile market. By developing genuine partnerships with producers facilitated by the right platforms, roasters can position themselves to weather price fluctuations more effectively than competitors who remain at the mercy of spot market prices and traditional import channels. 

“What matters most is collaboration. Producers have only so much capacity, and if they produce experimental lots that no one buys, they will need to offset that loss by charging more for their standard lots,” Dale tells me. “But if producers have a clearer view of what the market wants, they can plan better, reduce unnecessary costs, and ensure what’s produced actually sells. That benefits everyone in the chain.”

The specialty coffee businesses most likely to thrive in this new environment will be those that successfully balance commercial pragmatism with the genuine relationship-building that has always been at the heart of direct trade’s appeal.

“Making direct trade work consistently requires more than goodwill; it demands structure, the right tools, and real transparency. The opportunity today is bigger than ever: producers are facing the same volatility and uncertainty as roasters and are actively looking for stable, direct trade partners,” Raphael says. “In this environment, building resilient, transparent, and efficient supply chains isn’t just a nice-to-have; it is essential.

“Direct trade, when supported by the right infrastructure, gives both producers and roasters the ability to take control of their businesses and turn uncertainty into a competitive advantage,” he adds.

Volatile coffee prices are transforming direct trade from a primarily ethics-driven choice to an essential business strategy. While its roots in social responsibility remain important, especially for marketing authenticity, the financial benefits of direct producer relationships have never been clearer.

As the industry navigates these challenging market conditions, it is important to remember that the most resilient approach combines both the ethical foundations and economic advantages of direct trade.

“The real opportunity isn’t about choosing between ‘direct’ or ‘intermediated’ trade. It is about building transparent partnerships, one where producers and roasters understand each other’s needs and work together to meet them,” Dale concludes. “Trade is about trust, and whether that trust is built directly or facilitated through a sourcing partner, what matters is that it’s open, long-term, and focused on mutual success.”

Enjoyed this? Then read our article on why high coffee prices call for closer relationships in the supply chain.

Photo credits: Kat Melheim, Green Coffee Collective, Migoti Coffee, Mount Sunzu, Algrano

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