Coffee roasters are often considered the mouthpiece of the industry and the last link between producers and consumers.
In recent years, consumers have become increasingly captivated by the stories behind their favourite brands. Additionally, a growing number of consumers want to know their money is helping pay fair wages and support ethical practices.
This trend is particularly evident in the specialty coffee and independent produce sector, as 81% of global consumers say they need to trust the brand they buy from. As a result, more roasters are striving to be transparent about their business practices.
For instance, more roasters are using their coffee packaging to convey the story of the producers they work with. Furthermore, many roasters put out annual transparency reports that show the price they paid for their green coffees that year.
Some roasters are taking it a step further and are now publishing the prices they pay for each coffee currently on sale.
However, do these prices accurately reflect the cost of coffee production, including factors such as transport costs, the price of fertiliser, and the producer’s cost of living?
Why are more roasters publishing the prices they pay for coffees?
While coffee is a commodity, it is different to products such as rice, maize, petrol, or gold.
This is because coffee has a great degree of variation, while the others are uniform.
Coffee tends to have variations in quality, production and shipping costs, as well as spikes in supply and demand.
Additionally, a large percentage of coffee producers live below the poverty line. Furthermore, the price of coffee is often below the cost of production, which makes it less viable for them to grow, forcing them to switch to other cash crops.
Roasters who value quality and want to provide consumers with a quality experience realised the need to improve living and working conditions for their producers.
One of the most effective ways to do this is to pay them more – guaranteeing a consistent and reliable income to improve the quality of production over time.
Simply put, roasters must build relationships with producers to help them adopt sustainable production practices.
A number of prominent roasters are becoming more transparent with their practices, sharing details that go beyond sourcing strategies and technical details. Notably, more roasters are sharing the price they paid for their green coffee.
That said, price transparency can be a tricky subject. The prices published are often Freight-On-Board (FOB), farm gate, and fair trade prices.
However, FOB prices may not be a perfect indicator as it often only shows the price paid to exporters, with the farmer’s profit hidden inside.
Recently, roasters such as Onyx Coffee Lab in the US are increasing their level of transparency. The brand is championing its long-term relationships with farms and providing deeper insight into how much it is paying and the costs that go into the final product.
This includes the price of its green coffee, as well as all production costs. The brand also conveys the comparison between the C-Price, Fair Trade Minimum Price, and the price it chooses to pay.
Origin Roasters in the UK are also pushing the status quo by providing a full transparency report and focusing on long-term partnerships. The brand has been working with the same producers for over a decade, and built relationships with them, as well as a business transaction.
Additionally, Seam Coffee in South Africa has partnered with Raw Material Coffee: a leading green coffee supplier that focuses on empowering communities in various coffee origins.
Through this partnership, Seam Coffee and Raw Material guarantee 100% of the profits made from green coffee are given back to the farmer.
Should roasters publish the prices they pay for coffees?
To arrive at the final price of a brewed cup or a bag of roasted coffee, roasters must factor in more than just the price of the green beans.
It may start with the price of green coffee, but transportation costs must also be included. Additionally, there is a fee if the coffee is sourced through a sourcing partner.
Then, when the green coffee arrives at the roastery, production costs are incurred in order to make it into a consumable product.
It is important to note that this is an oversimplified representation of the coffee supply chain. Each link can be broken down into more steps.
Recently, transportation costs have reached an all-time high due to the rising costs of petrol. More so, Brazil, the world’s largest coffee producer, was hit with unprecedented frosts which decimated the majority of its crops.
This decreased supply coupled with increasing demand drove up coffee prices, but there are many more factors that contribute to the price of the final product.
While roasters may publish the price of their green coffee, it can be difficult for consumers to understand the logistics behind it.
For instance, the FOB price simply shows how much money is going back to the producing country and not the farmer directly.
To counter this, a mobile app called iFinca was developed to break down the prices along the coffee supply chain. To access all the information regarding their coffee, a consumer simply has to scan the QR code on their takeaway cup or custom-printed coffee bag.
This can help provide consumers with context to understand the living conditions of coffee farmers, as well as the cost of production.
It is rare to have access to the details of origin, such as the costs of fertiliser, labour, and transport. This is especially true if the producer is located in a remote area, which is often the case.
How can coffee roasters increase transparency along the supply chain?
One of the most effective ways for roasters to increase transparency along the supply chain is to build strong relationships with their producers.
Publishing Farmgate prices, minimum wage in the origin country, as well as the cost of production and the profits returned to the farmer will also provide consumers with substantial insight.
Additionally, it informs them that their money is making a difference to those who produce their daily coffee.
To convey this information to consumers, roasters can use custom-printed coffee bags and takeaway coffee cups with a QR code.
Rather than crowding packaging designs with an overload of information, roasters can insert simple barcodes to give consumers access to a whole world of information.
At MTPak Coffee, we can help specialty coffee roasters convey price transparency to consumers through eco-friendly takeaway coffee cups and coffee packaging.
We offer a range of custom-printed coffee bags made from 100% recyclable materials, such as kraft or rice paper with a LDPE or PLA lining. More so, we allow our roasters to have complete control over the design process by allowing them to build their own coffee bags.
We are also able to digitally print QR codes onto a range of sustainable coffee packaging, with a quick turnaround time of 40-hours and 24-hour shipping time.
MTPak Coffee also offers low minimum order quantities (MOQs) to micro-roasters who are looking to remain agile while showcasing brand identity and a commitment to the environment.