While the coffee industry as a whole is facing challenges, online coffee auctions are breaking records

Coffee auctions are nothing new and have always been a platform for showcasing high-quality coffees to buyers from around the world and finding out what the market is willing to pay for them. In recent years, coffee auctions have begun to go virtual. Online auctions have been held since 1999 and have continued to grow over the past 20 years. Many of the most well-known coffee auctions in the industry, including Cup of Excellence (CoE) and Best of Panama (BOP) , have auction platforms.

Coffee auctions have been a staple of the coffee industry for years. Auctions can be attended in person or held online. They are often held in conjunction with regional or national coffee quality competitions – the winning lots are often sold at auction. Live auctions allow for a more intimate, live interaction between producers and buyers . Buyers also get to know the farm better , as they are often at the farm’s point of origin. But virtual auctions offer a more flexible, cost-effective alternative that is more attractive to buyers. For coffee producers, they offer an opportunity to reach more international buyers, potentially selling their coffee at a higher price.

Two of the biggest benefits of auctions are quality discovery and price discovery. Virtual auctions are a great way to explore both, as the work that importers typically do doesn’t always make the quality shine. It also doesn’t always allow manufacturers to get the most out of their products.

Throughout 2020 , the coronavirus pandemic has had a profound impact on the entire coffee industry, including the World Coffee Championships and a host of other expositions, competitions and trade shows.

In response , we have seen the rise of online coffee auctions, which have skyrocketed in popularity due to the implementation of various travel restrictions . Many people naturally assume that organizing a virtual auction would be easy due to the COVID-19 restrictions, but organizers face a new set of challenges. This is because most online auctions are preceded by coffee quality competitions or other related events, which usually have limited in-person participants. This puts more pressure on organizers and their logistical support capabilities . This means that coffee producing countries have to be more creative when organizing coffee production.

Additionally, the logistical burden of transporting coffee makes it difficult to organize any kind of auction — virtual or otherwise. In some countries, it’s difficult for producers to get the necessary permits to get coffee from A to B. This was a real problem at the beginning of the outbreak.

Also, the coffees are selected by judges, tasted at different farms, and there is a maximum of two people per room in the cupping to reduce the risk of infection. It is more difficult to organize cupping when the judges are not in the same room . From a financial perspective, the biggest worry is that people will not bid, or they bid low. There are these variables - roasting , transportation, demand , everyone is super nervous and difficult .

But the fact is that the average bid at the auction was still high and the world record was broken. Even in the economic downturn and the coronavirus, the interest in high-scoring coffees continues to grow . Virtual auctions have been organized for more than 20 years. The earliest of them were BOP and CoE , and they are arguably still the two most prominent and successful.

However, over time, more and more coffee varieties have begun to emerge, making it easier for producers of high-quality coffee to reach international buyers. Online auctions can benefit more remote or lesser-known sources. Coffees from heavily isolated parts of the world are also sold at virtual auctions, making it relatively cheap for buyers to participate in the auctions and potentially find bargains . This also means that producers have great potential to enter a whole new market and experience a significant increase in prices, which can change the trajectory of their lives. Despite the coronavirus recession in the coffee economy, there are still many buyers actively purchasing high-quality coffee. In 2020, auction records were broken and improved by 30% . These successes mean much more than just revenue.

The past year has been challenging for the coffee industry . Travel restrictions, logistical issues, and shipping delays have made buying green coffee a more complicated process. Buying at auctions is no exception. But despite the challenging outlook at the start of the pandemic, mostly virtual auctions have managed to continue selling green coffee at high prices, with another record-breaking auction on the BoP in 2020. This is an extremely useful tool for lesser-known origins to raise awareness and increase producers’ revenues.

Summary: Even without the coronavirus, online auctions would be a trend. The biggest problem may not be transportation or quality, but foreign coffee merchants must not learn the operating methods of our platform e-commerce, otherwise the price increase will not be 30%.

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