This October, the first container of Brazilian specialty coffees will be shipped by Farmly, the winner startup of the Federal University of Viçosa (UFV) edition of the Avança Café [Advancing Coffee] program, designed to encourage innovative solutions for the coffee chain through new businesses. The program is an initiative of the Brazilian Consortium for Coffee Research and Development, coordinated by Embrapa Coffee (Brasília, DF). Farmly identified an important issue that needed solution: small Brazilian coffee farmers have problems exporting specialty grains in smaller quantities. On the other side, small coffee roasteries outside of Brazil are forced to buy from large export companies. The innovation proposed by the startup was to bring the two of them together through technology. Farmly's six young entrepreneurs have developed a digital platform so that coffee farmers in Brazil can offer specialty coffee batches to foreign roasteries interested in buying gourmet grains in smaller quantities. As a result, farmers can earn about 20% more compared to what they would receive with conventional exports, and small processing companies abroad have easy access to small specialty batches for which the companies pay, on average, 14% less than local importers. “In some cases, a bag that would be sold for R$ 420.00 through traditional exporters may be worth R$ 1,000 paid directly to the farmer on Farmly’s platform,” compares the mechanical engineer Telmo Baldo, who is responsible for the financial management of the startup. He says that the difference is explained by the fact that the innovation does not require several intermediaries in the export route. In the conventional system, the farmer is contacted by a coffee hunter, a professional responsible for identifying batches of quality coffee. Then the product is negotiated with a Brazilian exporter and received by a company in the same sector in the destination country. It goes through a distribution center from where it is finally sent to the final buyer. Hence the large number of links and batches in this process favors losses during transportation The Coffee Research Consortium Established in 1997, the consortium has had the mission of combining the human, physical, financial and material resources of partner institutions and gather additional resources to develop projects within the Coffee Research Program. It is managed by Managing Committee comprising the leaders of each of the member institutions: Campinas Agronomic Institute (IAC), Paraná Agronomic Institute(Iapar), Embrapa, Rio de Janeiro State Agricultural Research Corporation (Pesagro-Rio), Minas Gerais State Agricultural Research Corporation (Epamig), Espírito Santo State Institute of Research, Technical Assistance and Rural Extension (Incaper), Ministry of Agriculture, Livestock and Food Supply (Mapa), Southwest Bahia State University (Uesb), Federal University of Lavras (Ufla) and Federal University of Viçosa (UFV). Photo: iStock The innovation proposed by Farmly's owners, however, goes beyond the growth in earnings for the parties. “We want to promote a closer personal relationship, in which buyers know the coffee farms. We say that the goal is to make them realize ‘the smell’ of the farm and feel as part of the family, which originated the company's name”, says Lucas Faria, an Automation and Control Engineering student at the Federal University of Minas Gerais (UFMG) and platform developer. A new way to export coffee To export through the digital platform, the coffee farmer must contact Farmly and send grain samples that they intend to export. The coffee is sent to experts who evaluate the quality, estimate the approximate value of the batch and address it to specific markets accordingly. Once the coffee is approved, the grain and its general information are made available on the platform along with data about growers and their propertiers. The coffee farmer's history is included, for example, which adds personal value to the business. The batch is then shipped to Farmly, which exports and stores it in overseas stocks near consumer centers. From there they are shipped to customers who have ordered them, and the remaining coffee is offered to other roasteries. “This ensures fast delivery and preserves product quality,” Faria says. The entrepreneurs point out that the platform also allows the identification of special batches, which are cultivated in exceptional harvests in which climate conditions favored the production of better grains and are thus highly valued by the international market. The growth forecast for the business is surprising. This year the entrepreneurs will export two containers worth R$ 967,000. By 2020, they expect to sell eight of them, earning R$ 3.87 million, and by 2021, the intention is to double to 16 containers and make R$ 7.74 million in profits. “The specialty coffee market is valued at US$ 20 billion per year and grows at a rate of 20% per year”, celebrates Faria, announcing that in addition to sales to Europe, the company is already extending its business to Asia. The role of Avança Café Lucas Faria reports that the business idea gained momentum thanks to the Avança Café hackaton. “The competition made us organize the project and submit it to the Viçosa edition”, the student recalls. For the team, the program helped giving them discipline and provided the know-how required to build a new business. “The fact we had to make weekly submissions about the progress of the work accelerated the company and built the business. We moved from ideas to action”, Faria assesses. Event participants also complimented the organizers. “They brought professionals who taught us on sales, marketing, development... we learned a lot”, states Baldo, stressing the importance of mentorship and the environment that generated the company's first network. “In the end, I was impressed with Embrapa's strong role in stimulating innovation. It was something I had not associated with the corporation”, Baldo reveals. A program to generate innovative solutions for coffee Avança Café is a startup acceleration program with the purpose of fostering the generation of avant-garde technological solutions for the crop production sector. It started in 2019 through the establishment of a partnership between the Coffee Research Consortium and the Federal Universities of Lavras (Ufla) and Viçosa (UFV). Coordinated by Embrapa Coffee, the program took place in two stages. The first one involved the selection of teams through app development marathons known as hackathons. During the later stage, the best placed teams underwent a 12-week acceleration process to train and inform them to build startups. The version that took place in Minas Gerais was open for students and professionals interested in producing solutions for the coffee secto like mobile apps, software and Internet of Things. In addition to the universities, new members included the Brazilian Cooperative Organization (OCB), the Inter-American Institute for Agricultural Cooperation (IICA) and the Minas Gerais Federation of Agriculture(Faemg). The head of Embrapa Coffee, Antônio Fernando Guerra, asserts that all institutions in the coffee sector will be involved. “Our intention is to make knowledge and technology be more inclusive and increasingly available for the production sector”, he adds. The expectation is that the model for the Avança Café program is soon extended to the whole country. Photo: iStock Translation: Emanuelle Galdino, Mariana Medeiros