PRICE TRANSPARENCY

The future of coffee depends on farmers being able to sell their beans for what they are actually worth. Without them, none of this would be possible. Our goal is to ensure the farmers we buy from are profitable, allowing them to continue to produce quality coffee into the future. With this in mind we’ve decided to publish our prices for all the coffees we purchased in 2022. This is our second annual transparency report that outlines our buying history with each producer, the volumes we purchased, and the prices that were paid throughout the supply chain. 

Transparency is not a beauty contest, and we are not publishing these numbers to boast about the prices we are paying. We currently purchase all our coffee through importers and have yet to visit any of the farms we buy from. Without negotiating prices directly with producers and understanding their costs of production, we can't guarantee we are paying sustainable prices for any of our coffees. What we can do is commit to being transparent about the prices we pay, and request our suppliers do the same.

WHY TRANSPARENCY?

Greater transparency around coffee prices is good for the entire industry. Green coffee buyers will see what others are paying for similar lots, and consumers will know exactly how much farmers receive. Producers will also have a better understanding of what their coffees are worth. Publishing our coffee prices does not guarantee the producer was paid a fair price, but we do believe transparency around this information is crucial to building a more equitable future for our industry. 

GLOSSARY OF TERMS

DIFFICULTIES OF TRANSPARENCY

We faced a number of challenges while compiling the data for this report. Besides the various weight and currency conversions, coffee is valued differently depending on whether a producer is selling whole coffee cherries, parchment, or fully milled green coffee. Each step in processing and milling adds value to the coffee and is reflected in the price. In our report, you’ll see that farmers in Ethiopia and Kenya sold whole cherries to their local washing station, which is why the price paid was much lower for these coffees. These complexities make transparency even more difficult, and demonstrate why pricing alone isn’t useful. When analysing these figures, it’s important to take into account the context and anything else that might have influenced the price.

2022 TRENDS

Coffee prices remained quite high throughout the industry during 2022. The price paid for commodity coffee, also known as the c-price, reached a high of $2.58 in February of 2022 - this is the highest it’s been in over a decade. Even though we don’t purchase commodity coffee, this c-price still has a strong influence on specialty prices. As the c-price rises, specialty prices must also increase, otherwise there is no financial incentive for producers to continue the labour intensive process of growing for the specialty market. Below is a comparison of the c-price and the median FOB price in the Specialty Coffee Transaction Guide over the past five years.

The Specialty Coffee Transaction Guide compiles a list of prices paid for coffees graded 80 points or above on a scale of 100 points. This year, they reported an overall median FOB price of $3.50 within the specialty sector - rising $0.65 over the previous year. We’re happy to say that we matched this price, as our average weighted FOB price was also $3.50, rising $0.64 over last year. 

However, after looking at the numbers a bit closer, we realised the prices we paid were not high enough considering the quality of coffee we bought. All of the coffees we purchased were above 85 points, which means they should be more expensive than coffees that score 80 points. Fortunately, the Specialty Coffee Transaction Guide gives a detailed breakdown of prices paid for coffees based on their cup score, so we were able to compare our specific purchases to other buyers. 

As you can see in the graph below, our weighted average FOB price of coffees between 86-88 points was $3.45. We thought this was quite a good price, until we saw that other buyers were paying an average of $4.21 for coffees of the same score. This is what makes the Specialty Coffee Transaction Guide such a useful tool - it allows us to compare prices for similar scoring coffees.

KEY PURCHASING STATS FOR 2022:

• We imported 27,390 kg of green coffee 
• We purchased from 24 producers across 9 countries
• We obtained the FOB price for all 24 coffees, achieving FOB price transparency on 100% of our total volume purchased
• We obtained the Farmer/Producer price for 21 out of 24 coffees, achieving Farmer/Producer price transparency on 95% of our total volume purchased

COMPARISON TO LAST YEAR

The table above shows that we paid significantly higher prices for all our coffees compared to the previous year. It’s a great sign that our weighted average FOB price increased by 22%. We’re also proud to show there was an 11% increase in the amount of organic coffee we purchased compared to the previous year. While this is a solid improvement, we aim to increase this amount even more over the following years.

SPECIALTY COFFEE TRANSACTION GUIDE & THE PLEDGE

When it comes to price transparency, the Specialty Coffee Transaction Guide and the Pledge are two valuable sources of information. Both exist to increase the prices paid to farmers and provide living incomes in coffee-producing countries. They compile data from producers, exporters, importers and roasters, in order to establish new benchmarks for what we should be paying for quality coffee. By contributing our data to the Specialty Coffee Transaction Guide and signing the Pledge, we’ve joined a growing number of international coffee roasters who are embracing transparency and empowering everyone in the supply chain to make informed choices. We encourage you to visit both of their websites to find a full list of roasters, importers, and exporters who are also sharing their prices.