Coffee News: from Seed to Cup

Green Coffee Buying: 5 Tips for Bidding in Online Auctions

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Specialty coffee auctions allow you to discover the best coffees in a market, forge mutually beneficial relationships with producers, and buy green coffee beans with minimal hassle. They’re a great option for specialty roasters.

Yet go into an auction unprepared, and you may find yourself buying an expensive coffee your customers don’t like – while the coffee you really want slips out of your hands.

Alfonso Tupaz, Founder and Coffee Buyer of Hatch Coffee, recently bought an 88.5 natural Ethiopian Gesha in the Gesha Village Coffee Estate auction (and was the only North American roaster to secure one of the lots). He agreed to give me his tips for a successful auction experience.

Spanish Version: Café Verde: 5 Consejos para Hacer Participar en Subastas En Línea

coffee cuppingThe Hatch team evaluate samples before the online auction begins. Credit: Hatch Coffee

How Does an Online Coffee Auction Work?

An online coffee auction is a public sale in which green coffee is sold to the highest bidder, no matter where in the world they are. Coffees listed for auction are normally of a high quality, and their sale prices are often higher than usual to reflect this.

Alfonso tells me that they get the samples that will be auctioned roughly two weeks before the event. This allows them to cup those samples, get the opinions of other people in the industry (such as potential customers), and decide on their bidding strategy.

The auction takes place at a specific time, usually via an online platform. Bidding happens in real-time, and sometimes roasters will join forces to bid for an expensive lot. They will then divide the lot into smaller lots, meaning that more people around the world will be able to try these incredible coffees.

When creating your strategy, and later one when you bid in the auction, Alfonso emphasised the importance of five specific points. Let’s take a look at them.

coffee beansBag of green beans.

1. Know Why You’re Bidding

There are many different reasons to bid in an auction: before you commit to it, you should know your motivations.

An auction gives you the opportunity to buy truly exceptional coffees – the kind that can showcase your ability as a roaster. But it also helps farmers producing high-quality coffees that deserve above average prices. For these producers, auctions open up a new, larger market that is focused on quality.

What’s more, Alfonso tells me that it can encourage other producers to work towards high-quality coffees, because they can see the potential for financial rewards. Additionally, it can allow them to see what roasters value in a coffee. “Auctions help the producers to understand the willingness of the buyers to pay, as well as to find out where the market is headed,” he says.

In this way, auctions benefit the roasters, the producers, and the industry as a whole.

coffee sproutsCoffee sprouts

2. Consider Your Portfolio

The most important thing, when bidding for a coffee, is not the cupping score or the price. It’s your portfolio. Ask yourself: will that coffee fit your portfolio? Will it fill a gap? And will your customers buy it?

“Be aware of which coffees will match your local market,” Alfonso tells me, before adding, “and rely on your own [cupping] score.”

Alfonso explains that there are two different cupping scores: the one provided by the auction organiser and your own one. It’s your score and your analysis that matter, because it’s you who’s going to be roasting and selling that coffee.

coffee beansRoasted coffee ready for analysis. Credit: Hatch Coffee

3. Think Long-Term

Auctions facilitate one-off purchases, but they can also be the start of a long-lasting partnership. Alfonso tells me that he goes into them looking to make contact with high-quality producers from whom he can purchase coffee year on year.

He tells me that he participated in the Gesha Village Coffee Auction not just because of the exceptional coffees on offer, but also because of the story behind them. They saw the potential for a coffee with meaning behind it – and a community that they could work with over time.

coffee cherriesRipe coffee cherries. Credit: Angie Molina

4. Avoid Competing

Don’t allow yourself to get carried away in the moment. Alfonso emphasises that even though auctions tend to become competitive, you need to have in mind a price that you’re willing to pay – and stay focused on it.

What’s more, he advises that bidders shouldn’t overstretch themselves. Auctions offer a wide range of coffees, so don’t bid for too many lots. It’s better to focus on the coffee you really want.

He also recommends being aware of the speed of the bidding: do you want to enter into a bidding war?  Is the price escalating too quickly?

It’s easy to be infected by the tenseness of an auction. But stay calm and focus on your goal. This will make sure that you’re happy with your final purchases.

coffee beansMultiple samples ready for cupping. Credit: Hatch Coffee

5. Analyse The Market

Treat an auction as an opportunity, not just to buy incredible coffees and support the supply chain, but also to understand where the market is going. Up-and-coming coffee regions, the latest trends in coffee profiles, and how much roasters are willing to pay for a star coffee – auctions give insights into all these points.

“It is interesting to see where the market is headed and that’s why I think roasters should be a part of [auctions],” Alfonso tells me.

For example, the top bids in auctions keep getting higher and higher. For Alfonso, this shows that there is a growing awareness of specialty coffee.

SEE ALSO: World Record Broke as Geisha Coffee Sells for US $601/lb

And another insight he gained from bidding in auction was the importance of the East and Southeast Asian markets. For the past few years, coffee consumption in the two regions has been growing rapidly. Competitors from there are winning world championships year after year. And often their roasters are also the ones winning the top coffees in auctions.

“We had an idea of the coffee trends in Asia, but we didn’t know the extent of it until this [auction],” Alfonso tells me.

He’ll keep watching Asia now, looking to see how its coffee trends continue to develop.

coffee cuppingCupping Gesha’s at Hatch Coffee. Credit: Hatch Coffee

Coffee auctions are a great opportunity to buy exceptional coffees, create long-lasting partnerships, improve your portfolio, and gain insight into industry trends. They are a valuable green bean buying method for any coffee roaster. So follow Alfonso’s five tips to take full advantage of them.

Written by Angie Molina.

Please note: This article has been sponsored by Hatch.  

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