But losses mount for the home furnishings e-retailer that went public in October.
In the market for gourmet coffee, the online trading company is using the web to build more connections among hundreds of small and midsize businesses that operate as coffee plant growers and bean roasters.
To many consumers, buying coffee is about as common and simple as purchases get. To the coffee plant growers, bean roasters and distributors that make it all possible, things are typically a lot more complicated.
Just ask Olam Specialty Coffee, which launched in 2010 trading services for connecting growers with companies that roast coffee beans for brewing gourmet coffee. For years it connected with growers and roasters only offline, requiring a painstaking process of in-person meetings and phone and fax communications to gather from growers throughout the world the information that buyers, or roasters, need to know to serve their particular markets.
“There are roughly 20 attributes that a buyer looks to evaluate,” says Hayden Kwast, Olam’s e-commerce manager. The altitude of coffee plantations, the plant variety, and whether coffee growers expose the beans by washing coffee plant berries (also known as coffee plant cherries, whose seeds are commonly known as coffee beans) or letting them crack open under the sun—all of these and other attributes can affect the taste and quality of the final product that consumers buy in a food store or coffee house.
Moreover, other variables like fuel costs and shipping fees can quickly change, affecting the daily market prices and the revenue earned by growers, roasters and importers.
Many of its client roasters are small companies, and for years it was too difficult and time-consuming to explain to each customer individually the differences from the several hundred growers Olam made available, Kwast says. With such complications, he adds, Olam worked with only about 60 roasters until 2012. That was when it deployed its first transactional e-commerce site on a Magento Enterprise technology platform. “We liked the software extension community that supports Magento and how the platform can be easily customized,” Kwast says. Olam worked with Magento development partner Levementum to build customize its site. Magento is part of eBay Enterprise, a unit of eBay Inc.
The new e-commerce site, for example, enables buyers to view the current market price of each coffee product offered on OlamSpcialtyCoffee.com and click to purchase it at that price. A listing for coffee from Ethiopa, for example, showed the availability of Arabica coffee beans from the country’s Yirgacheffe region, prepared from coffee plant cherries under the dry process. Customers can also log in to see current per-pound market prices.
Kwast says that, for now, growers—many of them family farmers in remote areas—still use phone, fax or visits from sales reps to provide information on their growing history and techniques.
But the new site has enabled Olam to expand its number of client roasters in the last two years to about 700 from 60, Kwast says. “There’s a growing number of small, boutique roasters in the U.S. and Canada, and now we’re about to move into other markets as well,” he says.
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