News

2024/08/07

TYPICA Unveils New Model to Reshape Green Coffee Trade with Cutting-Edge Features

On August 6, 2024, TYPICA unveiled an updated version of its global online platform, which connects coffee producers with roasters and buyers worldwide to promote direct trade of green coffee. The New Model introduces innovative features such as “Wish List,” enabling buyers to post sourcing requests to producers globally. This launch heralds a revolutionary approach to green coffee sourcing, helping buyers find their ideal coffee while enhancing the sustainability of the entire coffee industry.

Coffee Industry and Its Challenges
Coffee, the second most traded international commodity after oil, sees a global consumption of 2.2 billion cups per day. However, this daily enjoyment for those in developed countries often masks the challenges faced by coffee producers.
In the traditional market, green coffee prices have been set by international futures prices. When major producing regions like Brazil or Vietnam anticipate abundant harvests, trading prices typically drop. This impacts the income of an estimated 12 million small and medium-scale producers worldwide, sometimes forcing them to sell below production costs.
Moreover, the volatility of international prices, driven by speculative investments in futures markets, keeps an estimated 5.5 million coffee producers in poverty. These structural issues lead many farmers to view coffee as a high-risk, low-profit crop, causing some to abandon production altogether. The industry also faces the “2050 Problem,” where climate change threatens to halve the land suitable for high-quality Arabica production – which currently accounts for 60% of all coffee grown – by 2050. Despite growing global demand, these factors raise serious concerns about the long-term sustainability of coffee production.

TYPICA’s Business and Its Significance
TYPICA, launched in 2019, is a global venture aimed at revolutionizing the coffee industry by creating a new international coffee market as a private sector-led initiative. With offices in Japan, South Korea, Taiwan, the Netherlands, and the United States, TYPICA operates across 80 countries and regions. The company has established a network of over 110,000 coffee producers and roasters, facilitating coffee transactions in 57 countries and regions.
TYPICA’s online platform aims to enhance coffee sustainability through industry-wide innovation. By promoting direct trade with producers, it strives to establish pricing independent of futures markets. This approach enables green coffee buyers worldwide to source beans at fair prices based on quality and production costs, shielded from international price fluctuations. As a result, small-scale producers benefit from higher and more stable incomes, directly contributing to coffee sustainability.

New Features and Their Novelty
On August 6, TYPICA launched an updated online platform called New Model, featuring innovative tools designed to bring about a dramatic evolution in coffee trading and enhance sustainability.

Wish List: Connecting with Producers Worldwide

The Wish List lets buyers broadcast their needs to coffee producers worldwide. Simply specify your coffee preferences, such as varieties, processing methods, and price points to receive tailored offers directly from producers.

Virtual Tour: Experience Farms and Dry Mills on Smartphone

Explore coffee farms and dry mills through 360° virtual tours. See the landscapes, hear the ambient sounds, and connect with producers, all from your smartphone. Feel the excitement of visiting coffee origins without leaving your home.

Visualized GHG Emissions: Pioneering Sustainable Sourcing

Leading the industry in sustainability, New Model visualizes the greenhouse gas (GHG) footprint of green coffee beans from farm to buyer. It’s a crucial tool as the world transitions to a zero-carbon future.

Dynamic Offer List: Fostering Active Imagination

The Dynamic Offer List harnesses AI to create a dynamically changing coffee offer list. Whether you’re looking for your tried-and-true flavor profile or excited to explore new tastes, this feature helps you find your ideal match.

Stay tuned as we continue to unveil new features and upgrades to transform coffee trading and enhance sustainability.

Explore our New Model in detail at:
http://typica.jp/newmodel2024/en/

Kosuke Arisawa, Executive Director and Technology Officer

We’ve been tackling the structural problems in the coffee industry, striving to improve producers’ lives and achieve sustainability. By visiting coffee origins myself and witnessing the realities faced by small-scale producers and coffee-producing countries firsthand, I’ve come to fully realize the potential of this innovative platform. I’m proud that through TYPICA, we’re taking the first step towards promoting fair trade and building a better society and a sustainable future.

Ayane Yamada, Representative Director and Chief Quality Officer

Five years ago, when we founded TYPICA, our current pre-order model – where buyers reserve green coffee beans right after harvest and processing – was far from common practice. Thanks to the support and collaboration of numerous coffee producers and buyers, I’m proud to say it has now become an established option in green coffee sourcing.

As we mark our fifth anniversary, I’m thrilled to introduce even more innovative choices to our community.

Our flagship new feature, the “Wish List,” represents a groundbreaking approach to sustainable coffee sourcing. It allows buyers to list their specific coffee preferences, enabling producers to view these requests and make matching offers directly. Moreover, producers can access aggregated global demand data, empowering them to plan their production more effectively. The Wish List transforms the producer experience from uncertainty – “What should I produce? Will it sell?” – to confidence – “I know what to produce, and I know it will sell.” We believe this shift will have a profound impact on coffee-growing regions.

Additionally, other new features such as virtual tours and GHG emissions visualization offer both buyers and consumers a deeper, more transparent view of coffee’s intrinsic value.

TYPICA’s platform has grown with the invaluable input of roasters and producers since our founding. We warmly invite you to continue shaping our New Model as active participants in this journey.

Masashi Goto, Representative Director and Chief Executive Officer

Direct trade allows producers’ quality efforts to be directly reflected in pricing. However, in indirect trading, buyer demand is rarely disclosed directly to producers. Especially for large-scale transactions, prices are often set indirectly by intermediaries based on international futures markets, which are heavily influenced by speculative money.

Recognizing these issues, we developed the “Wish List” in our New Model to create a paradigm shift in information flow through reverse thinking. Aggregating and sharing global coffee company demand data with producers is a first in coffee history – a global, private-sector initiative only possible through TYPICA’s technology-driven direct trade community that we’ve been nurturing across 80 countries. Furthermore, we have begun collaborating with public institutions in coffee-producing countries through partnerships with the Japanese government and JICA (Japan International Cooperation Agency). Through these global public-private partnerships, we aim to pursue innovations towards a more public-oriented industry structure.

We estimate that buyers registered with TYPICA account for about 18% of the total green coffee market. If all users’ Wish Lists – essentially, global coffee demand data – were accessible to producers worldwide, we could create a “New Commodity Market” based on actual demand. This could replace the volatile, unstable traditional market dependent on exchange rates and market conditions, potentially becoming the new standard for stable, long-term trading.

In essence, the New Model that TYPICA will nurture together with all of you as a community aims to dramatically increase the productivity of the entire industry by addressing the long-standing information asymmetry between sellers and buyers in the coffee industry. We are confident that this represents nothing less than a historic structural transformation of the coffee sector.

The coffee industry has long grappled with a dark legacy, having grown alongside the expansion of slavery. Even today, it faces numerous challenges, including poverty and human rights issues. At TYPICA, we’re tackling these problems head-on. Together with coffee lovers worldwide, we’re renewing our commitment to resolve these issues and usher in a new era for coffee. Our community stands united, ready to write the next chapter in coffee’s history.