Sustainability at 3fe: Week 16

18 April 2019

Those of you that have been following our blog posts for the last few weeks will know that there have been chronically low prices on the commodities market for coffee for some time, with wide-reaching implications for all parts of the industry. It was the sole topic of last week’s specialty coffee symposium in Boston, as industry leaders came together to try and forge solutions to this complex crisis. One topic surrounds the issue of the commodity market price being one of the only formal benchmarks for the whole industry.

Although we pay prices that are far beyond the market price, these are to farmers who have good knowledge of the industry, and know how to market their coffee to specialty buyers such as ourselves. For many farmers entering into the market, the commodity market price may currently be the only price discovery tool that they have, and it is often where negotiations for coffee purchases start. This means that farmers may not be accessing the full value of the coffee they’re selling, and the negotiating power lies heavily with the buyer.

The Specialty Coffee Transaction Guide is a project from researchers at Emory University to gather price data from specialty coffee buyers, alongside information such as the amount of coffee bought, the quality score and the region it came from, to build up an alternative price guide for the industry that doesn’t rely on the volatile and low market price. It will give farmers increased knowledge of pricing norms going into new relationships, and will also serve as a benchmark for coffee buyers to examine their own price agreements. Transparency is absolutely crucial to a more equitable situation for farmers and everyone else in the value chain.

The first edition of the Transaction Guide was published at the end of last year, and the next iteration is planned for this summer. It’s an incredibly important collaborative project, and one part of a host of solutions needed to create a more economically sustainable industry.

Our green buyer Steve has signed up as a data donor to this project, providing price information for all of the coffees he buys, for Has Bean and Ozone in the UK and New Zealand, as well as the coffees he buys for us here at 3fe. It’s one thing to make an effort within your own business, but we’re really proud to work with someone that’s committed to help forge a better outlook for the industry as a whole, and happy to have a part in it. Bravo Steve!