5

Economic Component

The economic sustainability of Buencafé, along with its environmental and social responsibility, is our
support and guarantee to have positive impacts on the different stakeholders.

In this economic component we address three material topics:

• Quality product at competitive price.
• Sustained growth.
• Transparent management of assets and resources.

Quality product at competitive price

We know that excellence in the operation allows us to offer a product of high quality standards. By implementing sustainable processes, we can reduce production costs to offer customers a very good cost-benef-ratio.

How we do it

In 2021 we set ourselves goals in terms of energy eficiency, sustainable packaging, recycling, and optimized use of water in industrial processes, among other actions, to remain competitive and maintain the high-quality standards of our products. Through indicators, we evaluate performance and assertiveness of our strategic decisions, making the necessary adjustments or corrections.
GRI 103-2, 103-3

Sustained growth

This purpose allows us to expand the coverage of benefts for Colombian coffee growers, ensure actions aimed at improving their living conditions, provide labor and economic stability to workers, and favor the factory’s social investment in aspects such as professional training and employability of young people in Chinchiná.

Through the methodological implementation of measuring KPIs, monitoring and evaluating the strategies and programs we implement to meet objectives in a given time period is easier.

GRI 103-1, GRI 103-2, GRI 103-3

The main actions to meet this goal are:

– To develop commercial strategies focused on increasing consumption of soluble coffee at home.

– To conquer new customers for own and private labels.

– To implement commercial strategies to improve the positioning of brands of the National Coffee Fund (Buendía and Juan Valdez).

– To include the Buendía brand in the online store www.comprocafedecolombia.com to help increase consumption of 100% Colombian coffee.

Transparent management of assets and resources

The responsibility we have in managing resources of Colombian coffee growers leads us to work day by day in transparent communication, both of the financial results and management of assets and resources of the organization with all our stakeholders.
GRI 103-1

We are not alone in this work, given that, due to the type of resources we manage, we are subject to verifcation by different State entities. This nature is an opportunity for any stakeholder to request or consult anonymously or in their own name the verifcation and use of the allocated resources.

On the other hand, all the rules, resolutions, processes and procedures that exist for transparent resource management allow us a greater guarantee to act within the rule of law and ethics. In addition, we have instances of verifcation and control of contracts.

At Buencafé, the expense managers verify the use and management of resources and that contracts comply with all the established regulations, monitored in real time by the Office of the Comptroller General of the Republic.

In addition, our procedure documentation policy, which we implement together with the information systems, ensures traceability of processes.

Finally, sharing the code of conduct with all stakeholders and applying a ML/TF risk prevention and management model, which includes a manual of risk management procedures, is also an important strategy to address this material topic. To strengthen knowledge about how to manage this risk, we provide training focused on staff of the supply chain area. GRI 103-2, 103-3.

Next, we present the most
representative figures in
economic matters.

The Buendía brand became established in both Colombia and Ecuador, with monthly sales close to USD 1.8 million in both countries and 22% more sales in distribution channels, a record for the year.

In 2021, over 800 million cups of freeze-dried coffee were sold. Roasted and ground coffee sales reached a 7% share of the brand’s total portfolio in Colombia.

The brand was also included in the online store comprocafedecolombia.com to help increase consumption of 100% Colombian coffee.

In the territory, the operation of Buencafé means:

  • Purchasing of raw materials from coffee growers: pasilla (low- rade coffee).
  • Purchasing of coffee byproducts in the local market: Since the volume of coffee grounds generated in production is not suficient, we buy the necessary husk from the region’s threshers to fully meet the biomass boiler requirements.
  • Positioning of the Café de Colombia label in the world.
  • Purchasing of certifed raw materials for specialty coffees with premiums paid to coffee growers.
  • Support to 34 local suppliers with purchases for COP 1.8 billion (USD 480,897 ) per year.

Therefore, economic sustainability of Buencafé is a key aspect for the regional and national economy.

In the territory, the operation of Buencafé means:

Year 2021 brought with it several global challenges that tested our factory’s capabilities; each was an opportunity to innovate and discover increasingly sustainable alternatives.

The global supply crisis, due to shortage of raw materials, impacted delivery times. In response to this situation, at Buencafé we ventured into a work model under the principles of business agility, with early and constant deliveries of value, seeing the customer as the main actor.

Added to this challenge was the global container crisis, caused by the pandemic and deepened locally by social protests. To deal with these situations, the Buencafé supply area took on the task of strengthening coordinated work with the rest of the coffee institutions, to jointly make the necessary adjustments and resolve the inconveniences that arose.

The effects of the pandemic were also reflected in a lower purchasing power of end consumers worldwide, another innovation challenge for Buencafé. It was a strategic priority to retain customers and prevent them from migrating to other products of lower quality and price.

So, we focused on businesses of greater added value, such as the commercial strategy of selling jars, achieving a better price per kilogram. Betting on our own brands also yielded good results: with Buendía we exceeded 1,000 references, a development that poses new challenges to us in internationalization of the brand.

Another consequence for the market in the second year of the pandemic was high prices of raw materials. It meant challenges for us, since we had to increase the operational eficiency for remaining competitive in the global market. One of the solutions proposed was the “inventory strategy,” with which we reviewed the stock for eight months to identify alternatives that would mitigate the economic impacts of high raw material prices.

On the other hand, physical distancing and remote work was another challenge for the commercial area given the biosafety measures and restrictions imposed on regular visits.

Our commercial area strengthened the development of digital channels and online sales to keep communication with customers, an opportunity for us to continue improving the customer relationship experience and increasing our reach through new channels.

Another wise decision in 2021, during lockdowns due to the global pandemic, was reaching new market niches for freeze-dried coffee consumption at home, which benefited many of our customers, especially retailers. This trend continued throughout the year, helping us achieve record sales for this product. GRI 102-15