Strength in Numbers: Is Cooperative Coffee Buying Right for Your Business?
By Nani Ferreira-Mathews
Buying coffee cooperatively—or collectively, as a unified importer—has many of the same advantages for roasters that selling coffee cooperatively has for coffee farmers: access to resources, training, marketing, stability, certifications and bargaining power. Value alignment paired with democratic decision making can make working cooperatively one of the most rewarding yet difficult buying models. How does importing coffee collectively work? How do roasters find other roasters to start buying containers with? How do you split the containers or import the coffee directly? Solving logistics is only one part of the puzzle. There’s also financing, scaling up, governance and impact to farmers to consider.
This article will explore the models of two importing cooperatives, one in North America and the other in Europe. Cooperative Coffees, celebrating its 25th anniversary this year, imports coffee on behalf of 22 roaster-members in the United States and Canada. Roasters United, founded in 2012, has 20 members across six countries in Europe, including 19 roasters and one associated coffee shop.
STARTING A COOPERATIVE: SELF-GOVERNANCE
Cooperative Coffees was established and incorporated in 1999 in Minnesota. The seven founding roasters were located from Minnesota to Georgia, but at the time Minnesota was known for its cooperative-friendly laws and infrastructure. Even today, many states do not offer a cooperative designation when forming a business, leaving co-ops to manage their multi-owner businesses as corporations or other standard business designations. Now, 25 years later, Cooperative Coffees employs a team of 12, purchasing more than 5 million pounds of coffee annually for its 22 roaster-members. Members and their employees volunteer to serve on the organization’s board and committees to help govern and lead the cooperative while staff focus on operations. The staff and members span 14 U.S. states, three Canadian provinces and one territory and have long-standing relationships with producer cooperatives in over a dozen origin countries.
Cooperative Coffees staff and roaster-members at the 2023 annual general meeting.
Founder Bill Harris, owner of Cafe Campesinos in Americus, Georgia, modeled the co-op management and governance on other successful cooperative structures, including grocery and farmer cooperatives. “We used the legal documents of a co-op of food distributors and combined them with standard co-op templates for legal documents,” he says. While the co-op’s main offices were in Georgia, a lawyer in Vermont recommended incorporating in Minnesota. Even today, advisors who specialize in cooperatives can be hard to find, but there is more support for the co-op model than 25 years ago. Worker cooperatives are growing in popularity, and there are teams of specialists working to convert traditional businesses to cooperatives. The U.S. Small Business Administration (SBA) updated its guidelines for lending to cooperatives in 2024, allowing SBA lenders to lend to co-ops without first getting approval from the SBA. This removes a hurdle to speed up the lending process but does not address the personal guarantee issue that many cooperatives face with multiple stakeholders.
Cooperatives are democratic by design and give each member an equal voice in decision making through a one-member-one-vote process. Democratic organizations can operate in many different ways. Cooperative Coffees uses parliamentary procedure and majority rule, has defined quorums for committees, and holds a general meeting every year. Priorities in governing can shift with members’ needs and market fluctuations, and a well-functioning cooperative should maintain an oversight committee and a dedicated team that works on the governance and its evolving structure.
“I’ve been on the board. I’ve been the board chair. I’ve always been on the finance committee. … Some of my team have been on SAQ—sourcing and quality—and communications,” says founding member Mike Mays—co-founder and president of Heine Brothers Coffee in Louisville, Kentucky—of his 25 years of membership in Cooperative Coffees. When it comes to making decisions, he says it’s about getting the right group of people committed to the right vision and mission. He recalls times of crisis when members had to make the hard choice to pay more for coffee to keep the project sustainable. “There was some trust that we were making hard decisions that were for the right reasons,” he says.
Roasters United members meeting in Oldenburg, Germany.
Roasters United began in Europe in 2012 when four roasters came together to purchase a container of coffee. Roaster-member Tobias Radinger—founder and owner of kaffeefabrik, which operates a roastery and coffee shops in Vienna—joined the buying cooperative in 2013. “It was more or less a group of friends, one could say, because there was hardly any kind of contract or formal foundation on which this group was based,” he notes. “… One [member] would import the coffee to Europe and then resell it to the others. And this system worked quite nicely without any major disturbances for quite some time.”
Roasters United was officially incorporated in May 2021 in France as a Cooperative Society of Collective Interests (SCIC) after years of research on which country had the most advantageous co-op laws. “SCIC limits dividend distribution. The profit that is made, [or] the vast majority of the profits, cannot be redistributed as dividends. It must be used for cooperative development,” says founding member Florent Gout, Roasters United co-manager and founder of Esperanza Cafe in Paris.
Roasters United imports approximately 300,000 kilograms (about 661,387 pounds) of green coffee annually for its 20 members, with nearly all the work being done on a volunteer basis. Limited paid work is divided among a few roasters who are tasked with importing and quality control cupping of pre-shipment and landed samples. “We have one staff for five hours per week,” Radinger explains. “She helps out with bookkeeping, contracts, communication [and] gathering the commitments.” All other responsibilities are handled by committees and members who volunteer their time. The group gathers in person twice a year for business meetings where larger decisions are made.
COMMITMENTS: FORWARD BOOKING
“There’s all these reasons why the co-op is really smart for small businesses,” says Lee Wallace, CEO of Peace Coffee in Minneapolis, which roasts about 1.7 million pounds of green coffee per year. “For coffees that we go through more slowly, we’re able to buy through the commitment system, and then coffees that we go through more quickly, we’re able to just bring full containers right to our roastery.”
Roasters United members meeting.
The commitment system Wallace refers to is the internal term at Cooperative Coffees for future contracted purchases. Each member makes a commitment to purchase coffee in the future, based on their needs, sales and projections for growth. Coffee imported for members is held in storage until they are ready to receive it. Those commitments, or contracts, are vital to the importer’s creditors. “Roasters just needed somebody to finance the time between when they have to buy it and when they’re going to roast it,” Harris says. “That was a big risk eliminator that allowed us to get collective loans.” Ninety-five percent of coffee sourced by the cooperative is pre-sold to roaster-members.
Similarly, Roasters United members make commitments for future coffee purchases one to two years in advance and import into Hamburg, Germany. “I used to work for Cooperative Coffees,” says Gout, “so this system of commitments is just a reproduction of the Co-op Coffees system.”
Roasters United members aim to collectively purchase full containers from each coffee producer the co-op works with and have no leftovers or extra bags in any load for spot purchases. Once the coffee lands in Hamburg, it’s rebooked to each individual roaster’s account with the warehouse. Smaller roasters often take the coffee as soon as it lands, but for kaffeefabrik, Radinger says, “It makes more sense to have it lying in Hamburg in a warehouse than it would to pay a warehouse here in Vienna.”
Gout says there are some limitations to the current model, noting that roasters who want to purchase full containers do it outside of the cooperative, mainly because the cooperative doesn’t offer financing services.
“For larger-scale roasting companies [200,000 pounds or more per year], it is quite difficult to work with [Roasters United] because the co-op does not provide financing,” says Gout, “meaning that all the coffee must be purchased by roaster-members when it lands in Germany. This system is heavy to support for cash flow reasons. To be a member, you have to buy at least 50 percent of your green coffee through the co-op, so for this type of roasting company it is not easy.”
Both Cooperative Coffees and Roasters United add the operational margin for import management to the price roaster-members pay. This covers shipping, certification, insurance, handling charges, staffing and unexpected expenses.
The Cooperative Coffees 2024 Sourcing and Quality Retreat, where roaster-members and producer partners met in person and virtually to cup, calibrate and connect.
FINANCING
Harris secured a cotton loan for $300,000 in 1999 to purchase four containers of coffee in Cooperative Coffee’s first year. “We started with $7,000 of capital. We didn’t have funding when we started,” he explains. “I took [the funding request] to a ton of banks. I knew a bunch of bankers, and nobody would touch the idea at all, except this friend of mine. … He considered this to be a cotton loan, not a coffee loan, because they finance a lot of farmers with cotton and to [the bank] it looked like the way they financed farmers so they said let’s just call it a cotton loan and substitute the word coffee for cotton.”
Mays recalls, “Seven of us each wrote a $1,000 check to get Cooperative Coffees started. I remember writing that check and kissing it goodbye, because I thought, ‘I love this idea, love it, but it’s never going to work.’ And I’m glad to say I was proven mostly wrong.”
Heine Brothers, which celebrated 30 years in October 2024, operates 17 stores with 280 employees. Mays says the company roasts just under 300,000 pounds per year and, despite challenges, has always considered purchasing coffee that will make a positive impact at origin integral to its model. “I have heard farmers say that this is meaningful to them,” he says, “and especially the fact that we’ve been working with some of these farmer groups for over 20 years.”
The $7,000 seed funding is a drop in the bucket compared to what the co-op needs to secure from creditors these days to purchase more than 5 million pounds of coffee annually, rotate inventory, and manage a staff of 12 whose roles cover logistics, quality control, contracts and commitments, green buying, finance, communications, information technology and impact management. “The only reason we’ve been able to [secure funding] is because we have proven that we’re buying pre-sold coffee,” Harris says. “Every lender we’ve had that would give us millions relied on the fact that this was a group of people who had already bought the coffee.”
Intricate lines of credit with multiple guarantors and points of failure are not an easy sell for bankers. Even after 25 years of successful operation, Cooperative Coffees is still looking for the perfect banking relationship. Since its founding, the cooperative has received funding from traditional banks and alternative lenders like Root Capital and Seed Commons.
(Left) Cupping at Cooperative Coffees’ Quality Lab in Montreal.
(Right) Sol & Café producer Jose Renulfo Perez shows his coffee plot to a Sol & Café and Coop Coffees delegation. Jaén, Cajamarca, Peru. 2022. Photo by James Rodriguez.
“Most [agreements] are cash against documents, so as soon as Roasters United has to pay, the members have to pay,” Radinger says of the Roasters United model. The co-op does not offer any financing to members, which he says can create a financial burden. “I experienced it myself around New Year. There are so many coffees coming in—Peru, Colombia, Brazil, Uganda—and it’s a huge amount of money to be spent in an instant to cover the next 12 months of coffee,” he says.
Roasters United has been exploring financing options and hopes to secure a line of credit to attract larger members. Gout says the membership requested the co-op begin to investigate the possibility of obtaining a line of credit during the most recent general meeting.
The model works well for smaller roasters, he says, but like larger roasters, those in the middle find it challenging. For companies that roast between 100,000 and 120,000 pounds per year and have solidly established markets, Gout explains, it can be difficult to give up their current financing models and move to a co-op that does not offer any financing services.
QUALITY
Getting roasters to agree on quality can be a challenge for the cooperative importing model. Both Roasters United and Cooperative Coffees focus on 84- to 86-point coffees for the bulk of their purchasing. Roaster-members and quality cuppers who represent Cooperative Coffees participate in a two-day calibration workshop each year, and the organization hosts an annual sourcing and quality retreat where producers and members calibrate with the cupping team. Roasters United is developing expanded calibration protocols for its team as it adds higher quality microlots to its import roster.
Higher quality microlots are also part of the offerings from Cooperative Coffees producer partners. “Through our sourcing strategy that focuses on long-term relationships, we have a developed track record and an expectation around what kind of quality to expect from trading partners,” says Felipe Guardian, sourcing manager at Cooperative Coffees. “Roasters guide their commitments and repeat business based on a generalized expectation of what the quality is or may be in the upcoming year. It is the job of the quality lab in Montreal to validate the result and make sure the expectation is met. Higher quality microlots fit in the scope of trying to support co-ops’ systems to highlight their own members’ quality. Our motive is not to segment and cherry pick, but to support the co-op’s efforts to highlight good practices within their organization.”
LOGISTICS
Roasters United members visiting Medin Gimenez’s farm, member of Cenfrocafé co-op, in Peru.
Coffee imported by Cooperative Coffees is stored in one of two warehouses along the East Coast of North America—one in Toronto and one in New Jersey—while members span the continent from Florida in the U.S. to Canada’s Yukon Territory.
The logistics and shipping/receiving affect each member differently based on location. “It gets a little sleepy in the winter,” says Brandon Lindey, who owns Bean North in Whitehorse, the capital of the Yukon. “In the winter, we get a lot of German and Japanese tourists coming to see the northern lights and our roastery is situated right beside the hot springs, … [and] on the other side of us is a wildlife preserve,” Lindey says, describing the bucolic winter landscape surrounding his roastery. His green coffee deliveries travel the 54-hour drive across Canada from Eland Warehouse, just outside of Toronto.
It was the previous owners of Bean North who introduced Lindey and his wife to Cooperative Coffees while advising them on how to start their own roastery. In 2020, when Lindey and his wife founded that roastery—called Wood Buffalo and based in Edmonton, Alberta—they started buying beans from the cooperative as non-members. A few years later, the couple seized the opportunity to purchase their mentor’s roastery, Bean North, and relocate to the Yukon. At that point, they became Cooperative Coffees members.
“When we bought Bean North, they’d been in the co-op for so long, it just made sense to continue,” says Lindey. “There’s lots of values that align and the thought of trying to source on our own without the co-op was kind of mind-boggling.”
Gout explains that under the Roasters United model, “We buy coffee just for ourselves. Sometimes we buy some extra bags for non-members, but this is a small margin of the import volume. We try to fill containers at the maximum because it’s more interesting for the producer organization in terms of cost and for us as well in terms of cost.”
Once the containers land in Hamburg, the commitments are immediately rebooked to each member’s account within the same warehouse. Coffee is then palletized and shipped to each roaster at their discretion. Roasters United always aims to purchase full containers through the commitment system, but it’s not always exact. Gout notes that sometimes containers are not full, and sometimes the co-op buys extra bags and tries to sell them to other roasters they know around Europe. Then there is the added complexity of how to manage decaffeinated coffee considering the minimum order quantity at the German-based decaf facility.
“We import coffee especially for decaffeination in Europe,” Radinger says. “We send a batch of coffee to a decaffeination plant in Germany and get our own CO2 decaf back. This green coffee is something we have to calculate, but also looking at the decaffeination process because they can only do 3 tons per batch. This is also something we try to sell outside of Roasters United, because sometimes it makes sense to do two or three batches.”
“It’s not an easy puzzle, but it’s always working one way or another,” Gout says.
Coffee cherries on the plot of CENFROCAFE producer Anselmo Dìaz. Jaén, Cajamarca, Peru. 2022. Photo by James Rodriguez.
RESOURCE SHARING
Beyond the enhanced buying power and logistics support, there are intangible assets to buying in a group. Wallace, who became CEO of Peace Coffee in 2006, says “Peace Coffee may be the largest purchaser of coffee in Cooperative Coffees. It may be the largest business in Cooperative Coffees. But without the other members of Co-op Coffees, I am not where I am today.”
Wallace says that knowledge sharing among members has played an immeasurable role in the growth of Peace Coffee and her development as a coffee professional. “I spent so much time with the owners of all of these other coffee companies, and these people banded around me and helped me figure it out and showed me the ropes. We’re all different sizes, and I still learn something from talking to other members,” she shares.
Roasters United members visiting La Naranja and el Cedro Farm, Cenfrocafé co-op, in Peru.
Efforts to purchase other products cooperatively, such as bags and labels, have been spearheaded by members over the years as well.
Wallace currently sits on a team with other members tasked with innovating the future of the cooperative. She reflects on the climate work the cooperative has tackled through its Impact Fund, which started in 2015 as a way to support farmers struggling with coffee leaf rust, or la roya. Her input as a board member was instrumental in the evolution of the emergency response fund from a mutual aid program to a bottom-up grant-making arm of the organization.
When the fund was first established to help combat the coffee leaf rust outbreak, Wallace says, “The need was quite diverse.” Producers in the Chajulense Cooperative in Guatemala needed protein supplements while others found they could control the outbreak with backpack sprayers. “There’s never a one-size-fits-all approach when you’re talking about a product that’s grown in a diverse set of communities,” Wallace explains. The evolution of the emergency response fund to a broader impact fund happened naturally as members identified what producer groups needed. “The communities we were visiting were experiencing the impact of climate change in a far more accelerated fashion than we were seeing it in Minnesota,” Wallace says. “We want to be responsive to our trading partners and … really work with communities to understand how [they are] seeing climate change show up.”
Today, the Impact Fund operates as a grant-making arm of the cooperative that funds farmer-led projects with a biannual proposal process through its nonprofit office located in Montreal. Each member contributes an additional 3 cents per pound of coffee purchased through the co-op to finance the Impact Fund.
(Left) Coffee plot of CENFROCAFE producer Anselmo Dìaz. Jaén, Cajamarca, Peru. 2022. Photo by James Rodriguez.
(Right) Roasters United members at the drying facility of Medin Gimenez’s farm in Peru.
Roasters United members contribute 5 euro cents per kilo of coffee purchased through the co-op to a Project Fund that supports a variety of projects at origin. The Project Fund money is distributed to cooperatives based on need. “We use travel to origin to try to generate discussion about needs. Then we ask the cooperative to send us a formal project proposal and we have a project committee that reads the proposal, and they make recommendations to the group,” Gout explains.
“It happens quite often that we co-finance projects with Co-op Coffees or other organizations” he adds. “Right now, in the incubator program of the Chain Collaborative, we are financing a project in Fondo Paez [Colombia], and this is funded 50 percent [by Roasters United] and 50 percent Cooperative Coffees.”
Beyond impact and special projects, trips to origin with roaster-members provide a deeper connection to the producer cooperatives for both buying co-ops. It’s not always easy or feasible to dream of an origin trip, but for Roasters United it’s a requirement of membership. “Nobody gets paid for traveling, but we expect that everybody goes to origin and shares the news, the information from the co-ops, and so that everyone in the group has the advantage of having really profound data from origin,” Radinger says. Roasters United expects that members will travel at least once every two years and share their experiences with other members.
Cooperative Coffees does not require members to travel to coffee farms, though it is encouraged through organized trips. For Lindey, living in the Yukon, it’s not easy to travel to origin or to gather his own marketing materials. He plans to go to Honduras in 2025 on one of the cooperative’s organized trips for members. In the meantime, he says, “Stories [and photos] from the Impact Fund I find are super useful to get marketing material and just to tell the story about our relationship with the farmers.”
(Left) Matt Damron, quality manager, and Felipe Gurdián Piza, sourcing manager, at Cooperative Coffees’ Quality Lab in Montreal.
(Right) Miguel Mateo, with producer organization Manos Campesinas, presenting at Cooperative Coffees’ 2023 annual general meeting.
JOINING AN EXISTING COOPERATIVE
“It was always organic and Fair Trade. That was our criteria,” Harris says of Cooperative Coffee’s sourcing model. “One of the most important things is that there’s values alignment. It doesn’t work if you don’t get values alignment.” Cooperative Coffees buys exclusively from producer cooperatives. Harris says it was always meant to be co-op to co-op.
Roasters United’s sourcing strategy follows much the same sentiment, says Gout, with a focus on smallholder farmers, organic practices and quality coffee. Roasters United doesn’t require Fair Trade certification but is dedicated to organically grown, high-quality coffee.
Germany’s Quijote Kaffee was a founding member of Roasters United but has since left the project, stating differences related to increasing the guaranteed minimum price, pre-financing, and the distribution of responsibility. Quijote Coffee Collective now imports 650,000 pounds annually for itself and 20 to 30 other roasters through an informal system.
Despite their differences, Quijote Kaffee representatives encourage participation in the co-op model. “We still consider the Roasters United and Co-op Coffees model to be the best cooperative import model on the market,” says co-founder Andreas Pingo Felsen. “We recommend that all roasters become members of this or similar models.”
Gout says that Roasters United might not be a fit for roasters with experience directly importing their own coffee from a solid network of producers. “I personally love working in a co-op, making decisions [with] 20 people around the table,” he says, “but I also understand that some people prefer to do their things—and good things—on their own if they have the capacity and knowledge to do it.”
(Left) Author Nani Ferreira-Mathews of Thread Coffee speaking at Cooperative Coffees’ 2023 annual general meeting.
(Right) Alfonso Arias Bolano (Anei), Yaleidis Lopez Bulla (Anei), Melissa Wilson Becerril (Cooperative Coffees), and Alecy Andrade Carmona (Anei), at organic training Diplomado Sembrando Vida, 2024. Photo by Jere Argueta.
Both cooperatives are actively seeking new members who align with their sourcing ideologies and democratically run models. Roasters United has a small buy-in of $1,000, which is the equivalent of 10 shares. “We try to advise the interested roasters to work as non-members during a year and to buy coffee within the commitment system without necessarily being a member, to see if it’s working for them and so we can see if it’s working for us as well,” Gout says. All members must respect the code of conduct and be engaged in governance. “They must be part of at least one working committee, travel to origin at least every other year, and participate in the General Assembly,” Gout adds.
New membership for Cooperative Coffees follows the same pattern, with a year of provisional membership before full membership is granted. The buy-in totals $17,500 for a mix of common stock (voting shares) and preferred stock (non-voting shares), and roasters have 24 months to pay the total. The cooperative pays dividends annually and pays out equity earned over time. Both organizations require members to source at least 50 percent of their coffee through the cooperative by the time they reach full membership.
Reflecting on the 25-year journey with Cooperative Coffees, Mays says, “It feels good for us up in Louisville, Kentucky, to talk about this coffee [supply chain] and fair trade. But, you know, are we just telling a story? I’m an optimistic person, and I believe in small, incremental steps. I still believe in what we’re doing at Cooperative Coffees. The problems are so big, but if we stop, nothing will ever happen, right?”
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NANI FERREIRA-MATHEWS is an author, freelance journalist, community organizer, musician, and a worker-owner at Thread Coffee Roasters in Baltimore, Maryland. She is Kanaka Maoli (Native Hawaiian) born in Oregon and raised in Georgia. Her writing focuses on race, indigeneity, decolonization, anarchism, agriculture, and gender and sexuality. She holds a bachelor’s degree in journalism from Georgia State University.
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