Sourcing strategies in the Italian coffee industry

While the socio-economics of the coffee industry has received much attention, this article presents a novel analysis of B2B relationships in order to understand what determines coffee roasters' sourcing strategies. The theoretical framework is based on new institutional economics and relational contracting. The methodology is qualitative and uses a multiple-case approach. The evidence shows that different modes of transactions are devised in order to cope with the business uncertainty and to guarantee supplies of the coffee with the desired quality attributes. Traders offer to roasters guarantees that growers and exporters cannot provide. Relational components in transactions are essential to reduce uncertainty and transaction costs, and are important coordination mechanisms in trader-roaster linkages and even more so in the exporter-roaster interface. Roasters devise stronger coordination mechanisms with suppliers when the quality reputation of the core product is critical in their business strategy