Transparent Trade

The Specialty Coffee Transaction Guide reveals prices paid and cupping scores for 10,000 anonymous contracts to help buyers and growers negotiate prices independent of commodity markets.

By Dan Bolton

Transparency answers the most pressing question in coffee: Where does the money go? The release in January of the first Specialty Coffee Transaction Guide offers defensible price points at which buyers and sellers can begin negotiating prices for specialty coffees.

The online publication is an attempt to guide price discovery in compliance with antitrust laws. The data, drawn from 10,000 contracts, is based on actual prices paid for quality coffee at different quantity levels. It is a first, following several years of tracking FOB prices by a team of economists and academic researchers at Emory University in Atlanta, Ga.

The work is an outgrowth of Transparent Trade Coffee which launched in 2015 to provide a forum where consumers, curious about their coffee choices, can review pricing details from direct trade roasters at the time of sale. At the heart of the venture is the concept of “return to origin” defined as the percentage of coffee retail sales that goes back to the coffee supply chain, according to Peter W. Roberts, professor of organization & management at Emory.

Roberts and Chad Trewick, founder of Reciprocafe, were joined by Ric Rhinehart, executive director emeritus of the Specialty Coffee Association (SCA) during a recent webinar addressing solutions to the coffee pricing crisis.

The Specialty Coffee Transaction Guide reveals the price paid and cupping scores for 10,000 anonymous contracts to help buyers and growers negotiate prices independent of commodity markets

Rhinehart, who heads a newly formed SCA initiative to address pricing concerns, said that existing markets (both arabica and robusta) do not “effectively address the real cost of labor today.” Rhinehart estimates that 70% of the cost of production is labor with most small farmers earning less that a living wage. He and the staff at SCA’s Sustainability Center, are encouraging roasters and importers to participate in the Emory University research to better understand the problem and provide alternative price discovery mechanisms.

He said recommendations and interventions will be made public in September. These include ongoing updates of the coffee transactions guide.

Roberts told webinar participants that pricing volatility and the intervention of financial professionals drowns out the real economy of coffee, one that consists of farmers and farm workers, millers and traders, roasters and retailers.

The guidelines are based on submissions by 21 coffee firms covering 10,000 contracts during a two-year period ending September 2018. Transactions totaled $341 million.

Content includes FOB price, the location where the coffee was produced and the country where it was processed; purchase size by volume and – most important – a quality score.

The intent is to change the initial discussion from “what’s the C-price so we can determine a quality differential” to “last year your coffee cupped at 88 enabling our roasting company to get a wholesale price of $xx. Our clients sold that coffee for $xx so let’s adjust accordingly.”

Trewick, who co-manages the guidelines project, is seeking 20 additional data donors for the next update, improving the accuracy of the benchmark.

Learn more: transparenttradecoffee.org

Transparent Trade Roasters

The trading process is transparent; farmers gain bargaining power through knowledge and receive a fair price that is not vulnerable to commodity market fluctuations.

 Bellwood Coffee

 Bridgeport Coffee Company

 Cafe Kreyol

 Caffeic Coffee Roasters

 Café Campesino

 CleverCoffee

 Cross Coffee

 El Purica Specialty Coffee Roasters

 Elephant Beans

 Esperanza Café

 Flying Roasters

 Good Karma Coffee

 Grounds for Empowerment

 Café Marcala Intl (Guancasco)

 Higher Grounds Trading Company

 Hot Roasted Love

 Ipsento Coffee

 Kaffeefabrik

 Kickapoo Coffee Roasters

 Kiez Rösterei Berlin

 Old Soul Co.

 Onyx Coffee Lab

 Priscilla Soares Artisanal Roasting

 Quijote Kaffee Kollektiv

 Rave Coffee

 Rumble Coffee Roasters

 Seattle Coffee Works

 Seis Cielo Coffee Roasters

 Singing Rooster

 Sweet Bloom Coffee Roasters

 The Coffee Collective

 Transcend Coffee

 Wood Grouse Coffee Roasters