RELATIONAL EXCHANGE AND PARTNERSHIPS: THE IPANEMA COFFEE CASE

Luciana Florencio de Almeida and Eduardo Spers ()

Organizações Rurais e Agroindustriais/Rural and Agro-Industrial Organizations, 2016, vol. 18, issue 3

Abstract: The case studied, Ipanema coffee, illustrates how market demand for high quality product conducted the company to build longterm relationship with its suppliers, the farmers, in order to guarantee access to high value consumer international markets. Data was collected through in-depth interviews with the major company shareholder and also with the marketing director along with desk research for the coffee sector panorama. The long term contract appeared as a prosperous alliance strategy in the measure that a) reduces the risk related to the coffee quality attributes, b) creates a competitive advantage though the appropriability of specific assets related to the coffee growing and processing, c) permits the creation of a brand name capital. The relational exchange has been successful once it allowed the firm to export 1 million bags for 25 countries. On the other hand, as expected in partnerships, the other party, the farmers, has incentives to continue the relationship, once it permits: a) international market access, b) premium prices, c) risk minimization with hedge operation, and d) no investment in coffee processing structure.

Keywords: Crop Production/Industries; Institutional and Behavioral Economics (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ags:orarao:265514

DOI: 10.22004/ag.econ.265514

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