Luang Prabang-based Saffron Coffee has have known long as a profit-for-purpose enterprise supporting more than 85 villages and some 485 coffee-growing families in northern Laos. Tourism and its café have also entered its brew over the years with programs such as Exclusive Guided Tasting, Cherry to Cup tour, and From Mountain to Cup initiative.
Like many in the country’s tourism and hospitality industry and its supply chain, Saffron has suffered under Covid. We Are Lao’s John Morris Williams recently interviewed Saffron Director Todd Moore to uncover the impact of the pandemic on the business.
WAL: How has Covid 19 for the past 20 months impacted Saffron Coffee?
Moore: I will answer regarding both the cafe and the company. Over the past 20 months, we have seen our domestic income drop by about 70-75%. During that time we have had to shift to the international market to a far greater extent. Our exports have increased in volume by four times the amount we were shipping pre-Covid. The difference in income between domestic sales and export sales is quite significant, with domestic sales being the much more preferable and profitable route. Even with the increase in international sales, there have been hiccups because of new challenges in international shipping that were not present before Covid entered the scene.
Another huge impact that has been felt is the inability to reach farmers in their villages. The lockdowns have hindered this aspect of our business quite a bit. The work that is done in village visits would concern coffee plot inspections to ensure organic standards are maintained as well as the extension of agricultural methods that can be applied to help increase crop yield and quality. Thankfully lockdowns have not yet occurred during the harvest season, and we have been able to reach villages in order to purchase their coffee harvest. This is a real concern for the coming months as harvest season will quickly be upon us.
WAL: How many staff have you retained since the lockdown?
Moore: At our cafes, we have retained 13 employees and had to lay off 11 employees. At the company we retained 12 employees and lost five.
WAL: Are you still operating with the local farmers in the provinces?
Moore: We are still operating with local farmers although this has been affected considerably by hard lockdowns and confusion as to what is allowed by the government in various situations. This is one of the most important aspects of our work here so this has put a big strain on our opportunities to get out and spend time with farmers and help with issues that may arise.
WAL: How hard has this been for Saffron and the farmers to date, both financially and production-wise?
Moore: The Lockdown has had a huge impact on Saffron financially. Our income is now drastically reduced. The income and profit that we had been receiving allowed Saffron to have a larger impact in the farming communities. With the reduction of income and lock downs with no income at all, our ability to invest in farming communities has been vastly crippled.
In moving forward, we will need to consider the machinery and inputs to the company that will allow us to maintain capacity to process increasing amounts of coffee. In the past we always relied on our profits for this. This is no longer a possibility. We continue to look to what we can change and (how we can) adapt in order to move forward and be successful in this Covid climate. Regarding production, the major issue is staff being allowed to come to work or not during lockdowns. Losing multiple months of production because of lockdowns creates multiple issues that delay the production of coffee to be completed in a timely manner.
WAL: What would you like the Ministry of Tourism to do in the next few months and into 2022 to help promote Lao PDR?
This is an incredibly difficult question, and I might be wary of answering it. Communication from the government that is clear and easily understandable would be a good start. It seems that no one knows what is going on. Vaccine stations are set up and instructions are given, and then once you get to the station you find that the information given was not correct or has changed from day to day. If there is not a sense of some kind of stability and order, it makes it very difficult to move forward. Another incredibly helpful area would be is in the sector of shipping. Shipping from other countries has become next to impossible. We find ways to do it, but none of them have been made easily accessible from action by the government. They have been made accessible by private companies, for which we are incredibly thankful. I would imagine that the mentioned items do not lie within the realm of the Ministry of Tourism. I will leave it at that.
Saffron Coffee: www.saffroncoffee.com
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