The Rising Cost of Green Specialty Coffee

by Antonia Morrison

What's Happening and Why It Matters:

The specialty coffee industry is experiencing a significant spike in the price of raw green coffee, and the ripple effects are being felt across the entire supply chain. From farmers to roasters, and ultimately to the end consumer, this shift is reshaping the landscape of how coffee is sourced, priced, and appreciated. Let’s delve into what’s driving this increase and how it’s impacting everyone involved.

Why Are Prices Rising?

Several factors are contributing to the rising cost of green specialty coffee:

  1. Climate Change Extreme weather events, such as frosts in Brazil and erratic rainfall in Ethiopia, have significantly reduced coffee yields. Coffee plants are highly sensitive to changes in temperature and precipitation, and the increasing unpredictability of weather patterns is putting additional pressure on farmers.

  2. Global Supply Chain Disruptions The lingering effects of the COVID-19 pandemic and geopolitical issues, such as the conflict in Ukraine, have disrupted global supply chains. Freight costs have surged, and shipping delays are commonplace, making it more expensive and time-consuming to transport coffee from origin countries to roasters.

  3. Currency Fluctuations Many coffee-producing countries trade in US dollars, so fluctuations in exchange rates can impact how much farmers are paid in their local currency. This is particularly challenging for countries with weak or volatile economies.

  4. Rising Costs at Origin Labour shortages, increasing wages, and higher costs for farming inputs such as fertilisers and equipment are driving up production expenses. Many farmers are also investing in sustainable practices, which, while crucial, often come with higher upfront costs.

  5. Increased Demand for Specialty Coffee The growing global appreciation for high-quality coffee means demand for specialty-grade beans continues to rise. This demand is outpacing supply, further inflating prices.

The Impact on the Supply Chain

  1. Farmers While higher prices can benefit farmers by providing better income, the rising costs of production often mean they’re not seeing a proportional increase in profitability. For many smallholder farmers, the financial pressures remain intense.

  2. Importers Importers are bearing the brunt of increased freight costs and are often forced to pass these expenses down the chain. Securing consistent and quality supply is becoming more challenging.

  3. Roasters For roasters like us, the rising cost of green coffee creates tough decisions. Absorbing the cost can strain business margins, while passing it on to consumers requires careful communication about why prices are changing.

  4. Cafés and Consumers Cafés may need to adjust their pricing, which could affect customer perception and footfall. Meanwhile, consumers may find themselves paying more for their morning brew, potentially questioning the value of specialty coffee if not informed about the reasons behind the price increase.

Turning Challenges into Opportunities

Despite these challenges, the current situation also presents an opportunity to strengthen relationships across the supply chain and educate consumers about the value of specialty coffee:

  • Highlighting Sustainability Higher prices often reflect the true cost of producing coffee sustainably. This is an opportunity to champion ethical sourcing and support farmers who are safeguarding the future of coffee.

  • Transparency and Storytelling Sharing the journey of coffee from farm to cup helps consumers understand why they’re paying more and appreciate the effort that goes into every bean.

  • Fostering Resilience Building long-term relationships with farmers and investing in direct trade models can help mitigate future disruptions and ensure fairer distribution of profits.

How We’re Responding at Noni’s Coffee Roasters

At Noni’s Coffee Roasters, we’re committed to sourcing coffee that supports the environment and the communities who grow it. While the rising costs are a challenge, they reinforce our dedication to:

  • Buying sustainably grown coffee that supports farmers and their families.

  • Communicating openly with our customers about the reasons behind price changes.

  • Celebrating the unique stories of the coffees we roast and the people who make them possible.

We believe that by working together and supporting one another, we can navigate these challenges and continue to bring exceptional coffee to your cup. Thank you for being part of this journey with us.

 

If you have questions about our sourcing practices or want to learn more about the coffee you love, don’t hesitate to reach out. Let’s keep the conversation brewing.

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