Walker Trading

by

By Dan Bolton

HOUSTON, Tex. - Specialty coffee trading desks worldwide are adorned with memorabilia. Origin photos hang from the walls, travel trophies crowd shelves, and trinkets are tucked away amid the multiple computer screens, desk fans, big mugs of coffee, and desktop calculators.

These tokens are evidence of human interaction, displays of affection, and familiarity with the coffee lands. While giants like Nestlé, Starbucks, and JAB Holdings control about 70% of the coffee market, the action for the remaining 30% is at the trade desks of smaller green coffee importers.

At Walker Coffee Trading the hum of multilingual phone conversations exudes a calm despite the fast pace. The ever-fluctuating price of a single container of quality arabica is more than $100,000 and trading desks deal in shiploads. You don’t get to “do over” a bad deal. Negotiations may be high-stakes, but they are not pressured. In the movie Wall Street, Gordon Gekko is best remembered for his greed, but he also told his colleagues: “The most valuable commodity I know of is information.”

“This business is all about establishing relationships. We are actively trading on behalf of 300 companies, large to small, and some of those relationships are 25 years in the making,” explains Monica Walker.

Coffee traders are not boiler room stock brokers seeking a sucker to close a sale. In coffee the most valuable intangible is a close working relationship based on the honest exchange of information, she explains. “We like to talk to people. Email is a good tool, but we really are old-fashioned and like to call and talk on the phone. We encourage them to do the same,” she says.

“Coffee is our life, not a job,” says Monica who met Carl 30 years ago in Colombia when he worked for a coffee exporter. Carl, born in Kenya, is the son of David Walker, a respected tea and coffee trader who died in 2015. Monica, who has a masters in business, management, and marketing from the University of Houston. They both worked in the coffee business many years before founding the privately held specialty coffee trading firm in 2006.

Walker trades more than 200,000 60-kilo bags a year, but the average order is 10 bags and they will sell as little as a single bag, says Carl. Walker sources most of its specialty coffees from Colombia, Guatemala, Costa Rica, Nicaragua amongst other Latin American origins. They know where to find good arabica in Ethiopia, India, Kenya, Tanzania, and Uganda.

Thanks to modern communication links Walker Trading could locate anywhere. The firm maintains inventories in New Jersey (Continental Terminals), California (The Annex San Leandro), and in Houston, Texas (Dupuy Storage).

The Walkers chose Houston.

The city offers affordable living in a warm climate and an affordable quality of life. “It’s the biggest multicultural center in the US,” says Monica. In 2012 Forbes called Houston the coolest of America’s 65 top Metropolitan Statistical Areas (MSA) citing: “Stylish housing developments have popped up downtown, restaurants have taken up residence in former factories, and art galleries like the Station Museum have been inhabiting warehouses.” Business Insider ranked Houston the Best City in America to do business in 2014.

The growing 9.4 million population recently exceeded that of Chicago and the median age of Houston residents is a youthful 34, the lowest of America’s large MSAs. The business climate is vibrant and open and Texas is a major technology center, says Monica. There is brisk local demand for high quality coffee product, adds Carl. “A lot of little things added up,” she said.

Houston trades a lot more coffee today than 20 years ago. Port Houston is ideally located to receive coffee from Colombia, Mexico, Central America, and the Caribbean, and not too distant from Brazil, but the city’s coffee industry was overshadowed by New Orleans, only 530 nautical miles away. Last year the port handled the equivalent of 2.16 million 60-kilo bags of green and roast coffees. Through September 2017 the port had handled 1.66 million 60-kilo bags.

The coffee infrastructure in New Orleans was built to support commercial brands like Maxwell House, Community Coffee, and Folgers where consistency is prized.

“Smaller quantities mean the business is non-stop selling but guys appreciate what we buy for them,” says Carl. “But that takes a very good understanding of the roaster. “We are in a position to encourage startup roasting companies,” says Carl. “We find that in a lot of instances the coffee they are buying is not right for the roaster and tell them so,” he said.

“We explain why the coffee tastes better and we make it so the price works,” he said. “In many cases we purchase on their behalf and then sell it back to them.”

Carl is always on the lookout for third-party certified coffees. Fairtrade International and Fair Trade USA, Rainforest Alliance, UTZ Certified, Smithsonian Bird-Friendly (shade grown), USDA certified organic, “we can find it all,” he says.

“Specialty roasters need to make the investment in certifications to be competive,” he said, but buyers should be mindful of the fact that these certifications cost producers money both in fees and more expensive (and often lower yielding) farm practices.

The extra money farmers receive should, but does not always, cover these costs. And certifications don’t guarantee good tasting coffee, one reason why Walker has a well equipped cupping room and Q grade trained traders.

“The specialty buyers Walker sells to are the kind of roasters who know what it takes to make a good cup of coffee,” Carl explains, adding, “the retailers they serve are more likely the blue collar place to go. They are business people and they understand that Walker brings them quality and consistency at competitive prices.”