Coffee Bean Supply Chain Strategy: The Case of Trading Institution and Profit Margin for Pioneer Coffee Commodities in Indonesia

Abstract

The role of coffee farmers is equally important to increase supply chain efficiency. The research problem is how the marketing channel strategy in the coffee bean supply chain considers the position of farmers at a reasonable cost level and proportional profit margins for farmers. This study focused on Robusta coffee which is cultivated by many farmers in Jambi Province as one of the coffees producing regions in Indonesia. The research phase consists of observing supply chain practices and formulating mathematical models to calculate profit margins. There are two types of channel that has been practiced for a long time. The results of the profit margin analysis show that the best supply chain is the second channel and prove that a long supply chain is not efficient for marketing coffee beans because some activities are non-value added.