Vega Coffee creates a 'more equitable coffee experience' with seed to cup subscription model

19-Jun-2017 - Last updated on 16-Apr-2018 at 17:30 GMT

Startup Vega Coffee wants to create a “more equitable coffee experience” by empowering small-holder farmers to roast and sell their own beans directly to consumers through a subscription at a higher profit margin than their unroasted green beans would fetch on the commodity market, according to the company co-founder.

“The way the traditional supply chain is set up is there is a huge disparity between how much unroasted green coffee is valued at versus how much roasted coffee is valued,” company Co-founder Noushin Ketabi told FoodNavigator-USA.

She explained that “even farmers that are growing really high quality coffee and have the various certifications that consumers want” often are unable to make a living wage selling their beans as an unroasted commodity because the bulk of the profit “value” comes after the beans are roasted and become a finished product.

However, Vega helps farmers close this gap by training them in every aspect of taking coffee “from the seed to the cup,” including roasting, grinding and cupping, which is the formal process of tasting and assessing the quality of coffee, Ketabi said.

As a result, farmers working with Vega sell their beans at about four times the price per pound than they would receive if they sold their beans unroasted. And because Vega sells the beans directly to consumers through a subscription model that “cuts out the middle men,” the price difference is not passed on to coffee lovers, Ketabi said.

“On the consumer side, this model offers a real win as well because they are getting specialty, high-end coffee delivered to their door for $15 including shipping,” she said, adding, “So, there is real value there compared to our competition due to our streamlined supply chain.”

Plus, she said, Vega consumers gain a “profound level of connection” to the farmers because they receive information about who grew and roasted the beans, its tasting notes and story behind the drink they brew each morning.

To this end, Ketabi said, “at the end of the day we see our role in the industry as connecting producers and consumers directly.”

Building a supply chain from scratch

But making that connection initially was not easy, Ketabi acknowledged.

She said that by cutting out the traditional roasters, Vega also cut out necessary parts of the supply chain and it had to create a new one “from scratch.”

The company did this first by creating roasting stations that were accessible to farmers by public transportation to ensure that they had sufficient supply. Next the company had to work with FDA to properly categorize roasted coffee – something that the agency was unfamiliar with because it usually saw green beans shipped into the county and not beans roasted at their site of origin and imported as a finished product, Ketabi said.

As if this was not difficult enough, Ketabi said the company is always under a time crunch because it wants to deliver the finished product to consumers’ doors within five days of roasting for maximum quality.

While the company worked out these kinks, it focused its efforts only on Nicaragua coffee farmers and restricted shipping to only every other week. But now that the system is in place, Ketabi said the company is hoping to expand into Colombia and other coffee growing regions and increase the frequency of shipping as its demand builds.

Many of the company’s current subscribers are individuals who have the coffee shipped to their home, but Ketabi said Vega also hopes to build its subscription base by partnering with offices to provide higher quality coffee to employees as an “easy perk.”