What You Don't Know About Your Morning Coffee

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What if I told you that you have the power to change the world with a purchase you make almost every single day?  

This single purchase has ripples that go around the globe and greatly affect the lives of people in your city as much as it affects peoples' lives thousands of miles away.  No matter what, this purchase will push a needle towards greater prosperity and life, or towards poverty and death.  This simple purchase is a drop in the bucket for the second biggest industry in the world, yet it's power runs deep, and chances are you spend less then $5 each time you buy... yes, it's your cup of coffee.

Coffee, it seems so simple. At the surface level it can be viewed as just another commodity with supply and demand where cheap prices are king.   Consumer demands for low pricing has created an industry modeled after many others, like the oil or manufacturing industries where the people at the bottom that work the hardest usually get the shortest end of the stick and the middle men at the top widen their profit margins and continue to increase their wealth.  For many this system is fine... but for a group of progressive thinkers there's a better way.

What if we stopped viewing coffee as a commodity, but started viewing it as a craft?  What if the focus shifted from lowest price to highest enjoyment?  What if an entire industry could become a model of economic, environmental, and societal sustainability?

Some of those questions will be answered as we break down the main pieces of the coffee industry and also weigh the traditional approach against the way we like to do things, sometimes known as direct trade or relational buying.

The Farmer

The coffee industry starts and ends with a human.  The farmer is arguably the most crucial person in the whole process as there would be no coffee without their investment and laborious work.  Yes, we need all the pieces to get the coffee here, but it really starts with them.  As I mentioned earlier, the farmer is the most likely person in the entire industry to get the short end of the stick... in a lot of ways they're at the bottom. Also, their investment is the most risky in the industry as it almost completely depends on the weather.  The farmer is the one basing their livelihood on a factor completely out of their control... weather.  True, importers might not get as great of margins for coffee during droughts in a country, but the farmer is the one who will often times not eat or send their children to college because of bad years.  

One of the most glaring difficulties I have seen first hand for farmers that is directly related to consumer demand for low prices is obviously enough their inability to get a high enough price for their crop to BREAK EVEN.  Yes, to simply pay off the expenses from a growing season is a challenge for many small producers.  Many times farmers are then forced to take out loans to cover expenses and can easily get behind and build a mountain of interest if they have a few back to back poor harvests.  Furthermore, even large corporate roasters buy directly from these farmers and offer loans to them which then in bad harvest years only binds farmers even more in debt so that they end up selling 100% of their crop to a single company who then completely controls the price they pay.  I've seen it first hand, corporate roasters strong arming small producers through debt to drive down the price they pay for the farmer's coffee.   It's sad, it's unsustainable, and it completely destroys any incentive for a farmer to produce better coffee!  

I don't have a complete solution to offer for this issue yet, but I can tell you where the solution starts.  It starts with small independent roasters working directly with small independent producers.  It starts with humanizing these farmers in our industry and even befriending them.  I believe farmers should be celebrated for their achievements and honored for the hard work they put in and risks they take so we can enjoy the luxury of their product.  Another step to take is to look closely at what we as roasters pay for green coffee and see how much of that price ends up in the farmers hand and ask if it's a fair and sustainable wage that takes into consideration the full value of that farmer.

So your money is going to a farmer, the question is how much of it will make it to them and is that enough?

The Logistics (freight,export,import)

Forgive me as I lump a very large portion of the coffee industry with many small pieces into one big category, but a portion of what you pay for your morning cup plays a very important role in getting coffee from the farmer to a roaster.  There's a lot of steps in this category, which we will break down in another blog post as it is one of the least talked about aspects of the coffee industry.  Again, the point here is there are many humans involved in things like dry milling, sorting, bagging, packing, freighting, customs, receiving, buying/selling and the question is what cut is being given to each and how do these people interact with the farmers and roasters?  Are they upholding the work being put into the product that passes through them or are they placing profits ahead of proper handling of this quality product?

This piece can be especially difficult and expensive when dealing with third world and unstable governments coupled with the remoteness of most small farms and the poor infrastructure leading to those farms.  This is certainly an aspect of coffee most consumers don't dwell on, but it can have a major impact on price and the distribution of what is paid to each member. 

Also, there are people called coffee importers.  Importers play an important role in the distribution of coffee on the States side.  Their job is part logistics and part sales.  Importers play a crucial role in pricing and transparency.  Many large/corporate importers focus on volume and buying huge amounts of coffee that can't be traced back to a single farmer but rather only to a broad region of a country where coffee from many different farms is blended together.  Many times these large regional blends are incredibly cheap and can be used by importers to make a nice profit.  On the other hand there are very relationally driven importers who frequently travel to the farms they work with to implement a full range of logistics and farming practices to create a more sustainable trading partnership.  Great importers also have the unique opportunity to, in a lot of cases, drive the Specialty Coffee industry by relaying the desires of roasters for new and experimental coffees to the farmers growing them.  The best importers usually come from a mindset of trying to connect farmers with roasters and not just operating like a traditional middleman.  Great importers with a passion of transparency can add a lot of value through their expertise while still accomplishing the traditional importer tasks of getting green coffee into the country.  

The Roaster

Another large portion of what you pay for your coffee goes to your local roaster.  Roasters play a vital role in not only transforming a raw product into something we can use, but also have the task of pulling out the best flavors in each coffee they work with.  There are a lot of ways to do this, and many different styles of roasting, but the main thing here is - is the roaster truly representing a fine coffee at a good value?

Another consideration for the consumer when choosing a roaster to buy from is the roaster's local economic and communal impact.  Again, coffee roasters, shop owners, and baristas are all humans who also deserve a fair slice in this industry for the value they add in getting you your coffee.  The whole point of this point is to help you see that what you pay for your coffee is going to a long chain of other humans!

So, are you using your money to support a large corporate coffee company with profits as the main focus who don't necessarily add to the local economy other then providing a few jobs, or do you support small locally and independently owned companies with goals to provide high paying jobs and a more sustainable way to drink coffee overall?  I think that an investment in your local independent coffee shop is really an investment in your local community and the people in it.  

So... in conclusion

Coffee shouldn't be treated like a commodity but rather as a means of life.  When you really start to look deeper and realize what you pay for coffee is essentially going to other humans, it should inspire us all to ensure that those dollars are going to the right people.  Yes, the coffee industry is largely doing a poor job, the Specialty Coffee Industry a slightly better job, but the point is it starts with a shift of the consumers' demand.  Become educated on this topic, talk to your local roaster about transparency and sustainability, tell others, and eventually we can shift the entire industry to a model that works and will sustain itself resulting in a drive for farmers to produce better tasting coffee then we have ever experienced before!  

 

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* Did you like this post, is there a topic you'd like to hear more about?  Let us know in the comments below!  

 

 

 

 

 

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