Challenges and Opportunities in Supplier-Retailer Negotiations: The Brazilian Gourmet Coffee Case

© The Author(s) 2025. Published by AMO Publisher. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https:// creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited. Challenges and Opportunities in Supplier-Retailer Negotiations: The Brazilian Gourmet Coffee Case Gustavo José Samartin Fundação Getulio Vargas, Brazil Murillo Dias  Fundação Getulio Vargas, Brazil Abstract This article addresses a business negotiation involving a Brazilian gourmet coffee company and a major retailer. The negotiation would expand operations and market share, improve brand visibility, and secure larger orders by partnering with a retail chain. In addition, the retailer would benefit from offering highquality products, negotiating favorable terms, and enhancing customer satisfaction, increasing customer loyalty. However, there were divergencies on price, discounts, promotional support, and meeting quality and sales volume expectations. Whether the companies reached a deal or not is described in this study, along with the Brazilian coffee market as the backdrop, shedding more light on retail business negotiations, which is helpful to scholars, negotiators, and other practitioners. Keywords: Coffee industry, business retailer-supplier negotiation, Brazil. Suggested citation: Samartin, G.J., & Dias, M. (2025). Challenges and Opportunities in SupplierRetailer Negotiations: The Brazilian Gourmet Coffee Case. European Journal of Innovative Studies and Sustainability, 1(6), 16-32. https://doi.org/10.59324/ejiss.2025.1(6).03 Introduction In this article, we describe a Type II negotiation, following Dias (2020), in which two parties negotiate multiple issues. Specifically, a Brazilian gourmet coffee company and a retailer negotiate to secure market share, distribution channels, and sales volume, among other objectives. In the sections that follow, we introduce the global and domestic context of the coffee market, which is necessary for understanding the scenario in which this passionate topic unfolded. Such information provides the reader with the essential information to better comprehend the unfolding of the negotiation process. Therefore, in this article, we first introduce the literature review on negotiation, followed by methods and materials. Then, we describe the negotiation context, including global and domestic scenarios, varieties of coffee (needed to categorize what is considered a special coffee), as well as Brazilian coffee quality control standards and geographical indication origins, which serve as the backdrop for the business negotiation case. Finally, this work compiles analysis, discussion, implications, research limitations, and conclusion. The study of negotiation has gathered researchers’ attention over the past few decades. Negotiation considers convergent perspectives, including its principles (Fisher, Ury & Patton, 1981; Kissinger, 1969; Lax & Sebenius, 1986; Pruitt, 1981; Raiffa, Richardson & Metcalfe, 2002; Rubin & Brown, 1975), its role in the decision-making process (Bazerman & Moore, 1994), and its application in business (Dias, 2019; Dias, 2023; Dias, Almeida, Silva, Russo et al., 2022; Dias, Lafraia, Schmitz et al., 2024; Dias, Leitão, Batista & Medeiros, 2022). Thus, this case focuses on Type II negotiation, in which two parties, a producer and a retailer negotiate several issues (Dias, 2020). We examined, through a case study approach www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 17 (Yin, 2018), the unit of analysis on the negotiation process between a Brazilian gourmet coffee company and a major retail chain. The special coffee context provides a rich backdrop for exploring the complexities of business-to-business negotiations. When necessary and to ensure confidentiality, specific details and names have been omitted from the case study. However, the special coffee producer, Café Constantino, expressly authorized the usage of images, direct quotations, and information for academic purposes. To all the interviewees, we assured them that the study has no commercial purposes. Coffee: The Most Consumed Beverage Worldwide According to the Food and Agriculture Organization (FAO), coffee is the world's most widely consumed beverage, with Brazil being the largest coffee producer and exporter, accounting for approximately 38 percent of global production, followed by Vietnam and Colombia (Morari et al., 2017). In contrast, the United States and the European Union are the largest consumers of coffee (FAO, 2025). Coffee also gathers approximately 25 million farming households, accounting for 80 percent of the entire global production (FAO, 2025), as illustrated in Figure 1: Figure 1. World Coffee production. Source: FAO, 2025 Figure 2. Coffee Family Tree Source: ABIC (2025) All rights reserved www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 18 Rubiaceae Gentianales and Coffea Genus: The Classifications of the Coffee Family Coffee varieties are subdivided into two major varieties: Arabica (coffea arabica) and Robusta (coffea canephora). These two varieties are the major flowering plants in the Rubiaceae family. Figure 2 displays the coffee family tree and its major families. Note in green the Arabica family (Coffea arabica) and in purple the Robusta family (Coffea canephora). Arabica: The Most Popular Coffee in the World, and the Most Commercialized in Brazil Arabica is the most popular type of bean, and its origins date back approximately 3,000 years (FAO, 2025). Arabica beans originate from the Ethiopian highlands and thrive in mountainous regions. Arabica beans are more complex than its main competitor, Canephoras (Robusta and Conilon). Arabica variety is the most commercialized in Brazil. According to the Ministry of Agriculture, Livestock and Supply – MAPA, and the Brazilian Agricultural Research Corporation (Embrapa) 1 , there are 176 different varieties of coffee Arabica registered the National Cultivar Registry (RNC) in Brazil, but approximately only 40 varieties are commercialized (EMBRAPA, 2021). The principal Arabica varieties commercialized in the country are: (a) Catuaí, which is produced primarily in both yellow and red varieties, is found in Minas Gerais. It is considered a variety 100% Brazilian, a crossing between Mundo Novo and Caturra, developed by the Agronomic Institute of Campinas (SP) in 1949. The drink is light, smooth, and has just the right amount of acidity (EMBRAPA, 2021). (b) Mundo Novo was developed through a cross between Sumatra and Red Bourbon cultivars in São Paulo, conducted by the Agronomic Institute of Campinas in 1952. The coffee is grown in southern Minas Gerais and has a caramel-like aroma, medium body, and sweet flavor (EMBRAPA, 2021). (c) Caturra, is a natural mutation of red Bourbon, is found in Minas Gerais. It is production is aimed at specialty coffees (EMBRAPA, 2021). (d) Topázio, which is a combination between Catuaí and Mundo Novo, developed by the Agronomic Institute of Campinas in 1960. The variety is cultivated in the South and Cerrado of Minas Gerais, and has a citrus aroma and mild flavor (EMBRAPA, 2021). (e) Acaiá, cultivated in southern Minas Gerais, produces large quantities of Acaiá coffee, which is appreciated for its smooth, chocolatey flavor and fruity notes (EMBRAPA, 2021). (f) Bourbon originated in France and arrived in Brazil in 1959 in the yellow variety, but it is also available in the red variety. The former is adapted to high, mild climates, such as the Cerrado, and has a sweet, hazelnut-like flavor. The latter, produced in smaller quantities, is not as smooth (EMBRAPA, 2021). (g) Catucaí is separated into yellow and red beans and is known for its natural sweetness, medium acidity, and citrus and fruity notes on the palate. The coffee has adapted to high-altitude regions in Brazil, particularly in Minas Gerais, as well as in the interior of São Paulo, in mountainous areas such as Pardinho, located approximately 210 km from the state capital (EMBRAPA, 2021). (h) Geisha, which is a variety from Ethiopia. Considered one of the most valuable coffees in the world, it has a cream body, jasmine aroma, and jasmine and papaya notes. Panama is prominent in production. (i) Icatu, which is a combination of Bourbon and Robusta. A strong variety, it is adaptable to different regions. Icatu has an aroma of almonds and chocolate notes (EMBRAPA, 2021). 1 EMPRAPA is a public company, linked to the Ministry of Agriculture and Livestock (MAPA), which was established in 1973. www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 19 In this article, the specialty coffee sold by the Brazilian coffee company mentioned above is a unique blend of the Mundo Novo and Yellow Catuaí varieties, resulting in a balanced, creamy, and velvety drink with a striking aroma of chocolate and hazelnuts, as illustrated in Figure 3: Figure 3. Yellow Catuaí (left) and Mundo Novo (right) coffee varieties. Source: Fundação Procafé (2025). All rights reserved. Robusta: The Second Most Popular Coffee in the World In Brazil, the second most popular varieties of canephora coffea is Robusta: (a) Robusta, originating from Congo and Guinea, it accounts for a quarter of global production, concentrated in Africa, Asia, and South America. In Brazil, the variety was developed with the help of Embrapa research and was given the name Amazonian Robusta in 2016, when production in Rondônia was already established. In the region, indigenous peoples also cultivate this coffee in various ways, including organic production, which has yielded special batches of the beverage. It matures late and is more resilient to climate variations. It has a characteristic bitterness and is intense, with almost 1.7-4% caffeine content, practically double that of Arabica (EMBRAPA, 2021). Figure 4 illustrates the Robusta variety: (b) Conilon is cultivated mainly in southern Bahia and Espírito Santo, the largest producer of Conilon in the country, accounting for over 60% of the national production. Because of its bitterness, it is a crucial component in industrial blends and instant coffee (EMBRAPA, 2021). Figure 4. Robusta Variety Source: EMBRAPA, 2021 www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 20 In sum, the two main varieties of coffee beans are depicted in Table 1, which also illustrates the main differences between the two beans, helpful to understand what an exceptional coffee is, and why the producer specializes in Arabica beans, as discussed ahead. Table 1. Arabica Versus Robusta: Main Differences Feature/Bean Arabica Robusta Grain Grain shape Elongated Rounded Caffeine content 0.8-1.4% 1.7-4.0% Number of chromosomes 44 22 Flavor Smooth, sweeter, fruitier, citrusy Striking, more bitter, full-bodied Ideal temperature for cultivation 15-24oC 24-30 oC Ideal altitude for cultivation 1000-2000 m 0-700 m World production 60% 40% Source: ABIC, 2025 Brazilian Domestic Coffee Market: Background In Brazil, Arabica beans are grown primarily in the southeastern states of Rio de Janeiro, São Paulo, Espírito Santo, and Minas Gerais, where the majority of coffee producers are located. Conversely, Robusta is cultivated in the lowlands of Bahia, Rondônia, and Espirito Santo state (ABIC, 2025). According to the Brazilian Coffee Industry Association (ABIC), the two major varieties’ production, per state, is illustrated in the following Figure 5: Figure 5. Arabica x Robusta Production per State in Brazil Source: ABIC, 2025 The world consumption in 2023/2024 was 177 million of 60kg coffee jute bags. In Brazil, the domestic consumption totaled 21.9 million 60 kg bags, with a consumption per capita of 5.01 kg/inhabitant/year, as illustrated in Figure 6, as follows: Feature/Bean Arabica Robusta Grain Grain shape elongated rounded Caffeine content 0.8-1.4% 1.7-4% Number of chromosomes 44 22 Flavor smooth, sweeter, fruitier, citrusy striking, more bitter, full-bodied Ideal temperature for cultivation 15-24oC 24-30oC Ideal altitude for cultivation 1000-2000 m 0-700 m World production 60% 40% Feature/Bean Arabica Robusta Grain Grain shape elongated rounded Caffeine content 0.8-1.4% 1.7-4% Number of chromosomes 44 22 Flavor smooth, sweeter, fruitier, citrusy striking, more bitter, full-bodied Ideal temperature for cultivation 15-24oC 24-30oC Ideal altitude for cultivation 1000-2000 m 0-700 m World production 60% 40% www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 21 Figure 6. Evolution of Domestic Coffee Consumption and per Capita Consumption in Brazil (1985-2024) Source: ABIC, 2025 Brazilian coffee domestic consumption per region in 2024 is illustrated in the following Figure 7: Figure 7. Brazilian Coffee Domestic Consumption per Region Source: ABIC, 2025 The Quality Standards for Brazilian Coffee: Sustainability, Purity, Quality In 1973, the Brazilian Coffee Industry Association (ABIC) was established by the state unions of the roasting and grinding industries to promote the development of the Brazilian coffee industry through continuous quality improvement programs, education for consumption, and incentives for innovation (ABIC, 2025). Between the 1970s and 1980s, domestic coffee consumption in Brazil decreased drastically due to government interventions, price freezes, and, primarily, the proliferation of companies that adulterated coffee. In summary, until 1988, Brazil had no quality control program for its coffee. Only in 1989 did the first ABIC initiative to improve domestic coffee consumption result in the creation of the www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 22 Purity Label. The creation of the Coffee Quality Program (PQC) aimed to ensure and maintain the quality of the beverage, demonstrate the quality of Brazilian coffee to the market, and increase consumer satisfaction, consequently leading to higher domestic coffee consumption. The Coffee Quality Program (PQC) emerged to achieve three main objectives which include quality maintenance of the beverage and market demonstration of Brazilian coffee excellence and enhanced customer satisfaction for increased domestic coffee consumption. The Permanent Coffee Purity Control Program (PPCPC) which ABIC introduced in 1989 used voluntary self-regulation to improve Brazilian coffee quality and established a Purity Seal for authentic 100% pure coffee. ABIC introduced the Coffee Quality Program (CQP) in 2004 followed by the Brazilian Sustainable Coffee Program (BSCP) in 2007 to share sustainable best practices. ABIC unified its programs under a single Certification Program for roasted coffees of different formats which combined legal compliance with quality and purity standards by 2023. Companies demonstrating sustainable sourcing practices can earn the ABIC Sustainability Seal, which emphasizes traceability and adherence to good manufacturing practices. Figure 8 illustrates the timeline for the quality control programs, as follows: Figure 8. Timeline for the Quality Control Programs Source: ABIC, 2025 ABIC's Ordinance No. 570 from May 9, 2022 defines the official classification criteria for roasted coffee through its specifications for identity and quality standards and sampling procedures and presentation methods and sustainability requirements and labeling standards for product classification (ABIC, 2025) as shown in Figure 9. Brazilian Special Coffees Association (BSCA) Certification The Brazilian Special Coffees Association (BSCA) emerged in the 1990s when twelve producers united to support Brazilian specialty coffee production through complete tracking from farm to consumer. linked to the Specialty Coffee Association (SCA). BSCA offers certifications for specialty Arabica and Canephora coffees, recognized in Brazil and worldwide. This certification is a unique benefit for members of the Association. Whether you are a producer, exporter, or roaster, BSCA certification adds value to your specialty coffee, opens doors to new markets, and ensures that each lot is recognized for what it has to offer: the excellence of Brazilian specialty coffee. The certifications are issued for coffees greater than 80 points for approval (BSCA, 2025). Figure 10 depicts BSCAs’ certifications: www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 23 Figure 9. ABIC's Purity and Quality Certificates Source: adapted from ABIC, 2025 Figure 10. BSCA Certifications Source: BSCA, 2025 www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 24 Rainforest Alliance Certification Other certifications include the Rainforest Alliance initiative, which promotes sustainable practices to protect nature and cultivates community partnerships in over 62 countries, focusing on rigorous sustainability standards for crops that prioritize environmental, social, and economic sustainability. Their initiatives include supporting responsible business practices that enhance rural economies, advocating for human rights, and promoting policy changes within the government. Overall, the organization aims to regenerate ecosystems, enabling communities to prosper and access profitable markets in a sustainable manner (Rainforest Alliance, 2025). Geographical Indication of Origin Brazilian Federal Government, represented by the Ministry of Foreign Affairs - MRE, Ministry of Agriculture, Livestock and Supply – MAPA and 16 other Brazilian coffee associations (including ABIC, for instance), issued in 2021 the Geographical Indication of Origin (Indicação Geográfica de Procedência) 2 , indicating 12 regions Geographical Indications of Brazilian coffees, taking into consideration quality, landscape, human element, territory, and national culture (MRE, 2021), in which geographical indications (Indicações Geográficas de Procedência) are registered at the National Institute of Industrial Property (Instituto Nacional de Propriedade Industrial), such as Alta Mogiana (since 2013), Campo das Vertentes (since 2020), Caparaó (since 2021), Espírito Santo (since 2021), Matas de Rondônia (since 2021), Matas de Minas (since 2020), Mantiqueira de Minas (since 2020), Montanhas do Espírito Santo (since 2021), Oeste da Bahia (since 2019), Norte Pioneiro do Paraná (since 2012), Região de Pinhal (since 2016), and finally, Região do Cerrado Mineiro (since 2014). Their locations are depicted in the following Figure 11: Figure 11. Geographical Indications of Brazilian Coffees Source: Ministry of Foreign Affairs, 2021 Figure 11 also shows the twelve geographical indications of origin. Note the Alta Mogiana region (highlighted in blue). Border between the states of São Paulo and Minas Gerais, with an average altitude of 1,000-1,200 meters, ideal for cultivating specialty Arabica coffees, is the location where negotiations between producers and distributors took place. 2 quite similar to the French wine industry, corresponding to the Appellation d’Origine Protégée (AOP) www.ejISS.com European Journal of Innovative Studies and Sustainability (ISSN 3083-6395) 2025 | Volume 1 | Number 6 31 Dias, M. (2019). People, process, and substance: Current definitions on negotiation. International Journal of Commerce and Economics, 1(4), 1–9. https://doi.org/10.13140/RG.2.2.15836.95360 EMBRAPA. (2021). Catálogo de cultivares de café arábica. 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