The development of the specialty coffee industry in the United States occurred in the latter half of the twentieth century not as an independent phenomenon but rather as a result of a series of interrelated movements that began to coalesce in the late 1960s. Direct Trade, the latest development in gourmet coffee sourcing and marketing, is an amalgam of elements of an American food revolution that gained national prominence in the 1970s, the environmental movement, and movements for social justice through conscious consumption. Direct Trade coffee is differentiated in particular by roasters' rejection of the notion of coffee as a commodity in favor of recognition that coffee is a seasonal fresh produce subject to discernible differences in quality. This thesis examines Direct Trade’s popularity in Olympia, Washington, a suburban cultural center located midway between Seattle and Portland along the I-5 corridor. It seeks to explain why and how residents of the Pacific Northwest, long distinguished for their pioneering spirit, adopted Direct Trade coffee from an early stage.

This thesis offers a comprehensive view of coffee trading on commodity markets. To describe the behavior of prices and their volatility, ARCH and GARCH models are used. These models analyse coffee prices of selected regions in Ethiopia, the birth place of coffee. The thesis connects the characteristics of soft commodity with current knowledge of financial econometrics. It also describes the effects of changes in exchange rates and oil prices on the price of coffee. Price volatility is examined with regard to deregulation and reforms on this market within the last three decades. Developments in the developing world caused a significant need for the progression and identification with the hedging instruments. These are closely linked to the globalized market with coffee, so it is conversely possible to absorb the shocks on small growers, who are significantly impacted by the globalized world.

Trading processes are occurring every day in all industries, and people within these processes are constantly faced with inequalities due to different power structures and opportunities. In particularly, the coffee industry is one industry that is affected by these trading differences. The purpose of this thesis is to examine two different trading concepts within the coffee industry; blockchain and direct trade, and how these are affecting the livelihood of the coffee farmers. This thesis was analysed from consumer’s and supplier’s perspective, which correspond to blockchain and direct trade respectively. Further, through a deductive qualitative research we gathered empirical findings which prove that farmers of developing countries such as Ethiopia and Guatemala can better off through a transparent and essential relationship, which either concept provides. Particularly, while blockchain encourages ethical customer to channel its purchasing power to the farmer, in order to improve their livelihood, a direct trade relationship between farmer and the buyer provides a personal connection in a vision to thrive together.