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Stained Jute Bags: A Growing, But Costly Trend.

There is a growing, yet unfortunate trend of stained jute bags of coffee. Buyers are flatly rejecting bags with stains, which leads to higher costs. Is there a safe alternative solution to complete rejection?

Throwing the baby out with the bath water. I never really liked this adage when first hearing it in my youth. The image seemed quite too literal and absurd. I kept searching for an apropos event that would epitomize its meaning. Now, it seems we have a prime candidate.

Everyone in the industry has anguished about the newly effective Food Safety Modernization Act (FSMA) promulgated by the United States Food & Drug Administration (FDA). Its far-reaching mandates combine a perfect blend of fear, knowledge and solutions, all attained under the primary objective of improving security, both at our borders and in the food we consume.

While there are many aspects to this program that impact the coffee industry, and many still hotly debated and petitioned, I am particularly concerned with the growing trend of stained jute bags of coffee. Buyers, both large and small, are now flatly rejecting bags with any hint of stains.

Back in the good 'ole days, coffee would arrive from countries far and wide in our vital US warehouses, where containers were unloaded. Any stained or damaged bags were immediately noted, segregated, advised to the merchant owner, and then usually instructed to "skim."

Skimming meant the warehouse personnel would remove the affected beans near the stain, and then either sew up the bag or re-bag the sound beans (that have no traces of damage) for normal sale with the rest of the lot. The final invoice to the buyer would be altered slightly for the new sound weights and the removed skimmed beans would either be sold to salvage (if possible) or disposed.

Costs of Handling Damage Claims

All worked well, and the industry had found a workable solution. While intentions of maintaining a safe product are paramount, we should take a hard look at our current trends and practices.

Flatly rejecting bags with any hint of damage means merchants must "buy in" deficient quantities to complete their contract, quite possibly at higher costs.

Merchants then must work closely with insurers to claim for the damages. If the whole bag is deemed "damaged," and therefore must be sold for salvage, the number of claims will increase significantly.

The costs to handle these "claims" will then increase as salvage is aggregated for more efficient sales--charging more back to the insurers. As we all know, premiums follow claims.

Ultimately, these increased costs must work their way back into the stream of commerce raising the cost to roasters and subsequently, the consumer.

This is an unnecessary chain of events that can be solved if we act now before the horse leaves the barn.

Creating Best Practices

Accordingly, I am spearheading a subcommittee composed of the best minds in each facet of the industry (insurers, merchants, warehouses, roasters and samplers), under the guidance of the Green Coffee Association (GCA) Logistics Committee to develop a best practices guide--a "preventative control" to a known hazard--to deal with stained bags.

Of course, there are reasonable limits that need to be set. If bags are saturated or a majority of the bag is damaged with advance signs of degradation, then obviously salvage or disposal is the only option.

However, a bit of prudence will go a long way. Through a collaborative approach we can drain the bath water comforted that our little darling green beans are clean behind the ears and ready for roasting (yet another preventative control!).

Brett Anderhub, CIC.CRM is senior vice president of Rekerdres & Sons, Dallas-Texas based a global commodity insurer. Brett has a postgraduate diploma in Marine Insurance and is a member of the GCA's Logistics Committee and a member of T&CTJ's editorial advisory board.

Caption: Buyers are now flatly rejecting bags even with the smallest of stains.

Caption: Increased costs from damages ultimately raise the cost to roasters, and consumers.
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Comment:Stained Jute Bags: A Growing, But Costly Trend.(GUEST COLUMN: LOGISTICS)
Author:Anderhub, Brett
Publication:Tea & Coffee Trade Journal
Geographic Code:1USA
Date:Mar 1, 2018
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