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Retail Price From These ‘Blue Chip’ Roasters Rises to $21.94 Per Pound in 2015 Q2

coffee price index

Graph showing quarterly averages in the Specialty Coffee Retail Price Index for coffees at the low end and coffees at the high end. Image by Transparent Trade Coffee.

The average per-pound price of roasted coffee among 59 of the top roasters in the United States and Canada rose 1.5 percent to $21.94 in the second quarter of 2015, according to this incredibly interesting retail price index.

We first mentioned the index, part of Emory University’s Goizueta Business School‘s Transparent Trade Coffee project, in April. The group behind the TT project is slowly building a registry of coffee roasters who are self-reporting FOB prices for single-origin coffees, as well as packaged retail prices for those coffees. The group is reflecting the resulting “effective grower share” as a percentage, encouraging consumers to buy from registered roasters when they are “satisfied with the economic treatment of the farmer.”

The Specialty Coffee Retail Index, another component of the project, compiles numbers from 59 U.S. and Canadian roasters described as “blue chip” roasters. TT is curating the list based on appearances in places like Coffee Review, the Good Food Awards and Roast Magazine’s own Roaster of the Year competition. The group manually compiles per-pound costs of coffees sold by these 59 roasters, including blends and single-origins, and excluding certain super-premium coffee types.

As previously mentioned, the average composite price among these roasters moved slightly up to $21.94. The highest-priced coffees averaged $27.73 per pound, while the lowest-priced coffees averaged $16.15 per pound. Compared to the second quarter of 2014, the average price for all indexed coffees jumped 12.5 percent, including a 1.1 percent increase for the lowest-priced coffees, and a 20.9 percent increase for the highest-priced coffees.

The Q2 analysis also for the first time tracked whether individual producers, mills or cooperatives were mentioned in the marketing of the coffee, finding that there was indeed a correlation between the naming of producers and higher coffee prices, but only at the higher end of the cost spectrum. See more analysis here.

Following is the complete list of roasters comprising the index:

1000 Faces Coffee
49th Parallel Coffee Roasters
Allegro Coffee
Alpen Sierra
Ancora Coffee Roasters
Armeno Coffee
Barefoot Coffee Roasters
Barnie’s Coffee & Tea
Barrington Coffee Roasting Co.
Batdorf & Bronson
Beansmith Coffee
Bird Rock Coffee Roasters
Blue Bottle Coffee
Bucks County Coffee
Caribou Coffee
Ceremony Coffee Roasters
Coffee Masters
Conscious Coffee
Counter Culture Coffee
CQ Coffee Roasters
Cuvee Coffee Roasting
De La Paz Coffee
Equator Estate Coffees & Teas
Evans Brothers Coffee Roasters
Flying Goat Coffee
Fratello Coffee Roasters
Gimme! Coffee
Green Mountain Coffee Roasters
Heart Coffee Roasters
Intelligentsia Coffee
Johnson Brothers Coffee Roasters
Kean Coffee
Kickapoo Coffee
Klatch Coffee
Las Chicas Del Cafe
Martinez Fine Coffees
Metropolis Coffee
Neighbors Coffee
Noble Coffee Roasting
Olympia Coffee Roasting
Origins Coffee Roasterie
Orleans Coffee Exchange
Panther Coffee
Paradise Roasters
Peet’s Coffee & Tea
Portland Roasting
PT’s Coffee Roasting Co.
Reunion Island Coffee
Starbucks
Stone Cup Roasting
Stumptown Coffee Roasters
Groundwork Coffee
Temple Coffee and Tea
Terroir Coffee
Thanksgiving Coffee
The Roasterie
Uncommon Grounds
Victrola Coffee Roasters
Willoughby’s Coffee & Tea
Zoka Coffee Roasters

Comment

4 Comments

Lwood

$21/pound is an absurd price to pay for roasted coffee, especially when it’s usually been sitting on the shelves for weeks if not months. When I can’t roast my own in the Winter I buy from a local roaster in Chicago and order what he’s roasting that day, and usually pay no more than $10/pound…..I guess if they’ll pay it why not charge it.

Dean cycon

Roasters charging that much should be ashamed of themselves. There is no way they are doing much for or with farmers to justify those high retail prices. Foolish consumers living in a willing suspension of disbelief.

Noah

Hmmmm…I find it troubling that this list of Transparent Trade index of “blue chip” Roasters is basically compiled of Roasters who have “bought” their way into this position. These Roasters have to pay to submit their coffees for review to be part of these “esteemed” awards categories and become a so called ‘blue chip’ roaster.
What a crock!!!

Also, “hey coffee drinkers/snobs, we as a roaster are naming a co-op/grower specifically on our retail bagged coffees, and we’re going to charge you more for it, because why not?!” And in Bird Rock coffee’s case, only give the grower 16% of total value of the coffee that is sold. Wow. Lame alright.

chuck

As one of the roasters on this list, I would like to respond to a couple concerns.

First off, $21 is an “average”. I don’t think any of these roasters list all there coffees for 21 and up. But, yes, if a roaster is paying a lot for a particular green coffee, they will indeed have to charge more. Yes, being in specialty coffee is an expensive enterprise: generally we pay a lot for green coffee, pay for the best equipment and roasters, and pay for the best staff. Those costs find there way to the product being sold.

The goal for the initial list of these businesses was to study transparency in coffee buying. Most of these roasters source coffee at origin; either via a Direct Trade model or “relationship model” or whatever you want to call it. Most of these roasters pay growers what they are asking for per pound for their coffee. Most roasters in the country do not follow this buying model and have no idea what the growers are getting paid.

As far as transparency, please look at the big picture. Emory chose to look at coffees purchased via a “Direct Trade” model in order to get a better idea of how much money farmers get.

At the time of this study, I believe only two roasters in the country published a Transparency Report. Bird Rock and Counter Culture. So, these two roasters where chosen as part of the initial study based on their entire direct Trade purchases in 2014.

Do you know what your favorite roasters are paying growers? If not, ask and see what they say.

http://dailycoffeenews.com/2015/04/16/this-retail-price-index-for-high-end-roasted-coffee-is-incredibly-interesting/

The results of this study found that both companies averaged about 20% for the retail price in 2014 back to the farmer.

We are not done w/ our 2015 study. There are only 4 farms that we work with who are represented on the Transparently Traded Coffee list but we have worked with an additional 5 or 6 farms in Central America and South America so we will be releasing those numbers as the coffees become available. As far as percentage of retail, is 20% good? Could it be better? Perhaps.

But difficult, unwise, and shortsighted to say without knowing the full story when it comes to retail coffee prices.

Publishing what we pay a grower is problematic because is really impossible to convey all the related expenses that come into play when selling coffee. For example, it is a lot more expensive to do business in La Jolla, California, higher taxes, higher rent, higher employee cost, higher insurance, than it is to do business in other parts of the country — or San Diego, for that matter. Sure, if we operated in a different part of the city/country, we could charge less which would lead to a higher percentage of the retail price going to the farmer – even if we paid less per pound for our coffee. THIS HAS NOTHING TO DO WITH WHAT THE FARMER IS ACTUALLY GETTING.

Bottom line, however, when it comes to paying growers, if we are labeling a coffee as “Direct Trade”, we have agreed to a price WITH the grower. The grower says, “this is my price.” 9/10 times, we agree. There are some instances when that price is too high, certainly. But, usually, the price is equal to the quality of the coffee.

There are also times when in addition to the price we pay, the price you see, we may also be contributing in other areas to that farm – we have made investments in some of the farms we work with. In the case of Finca La Bolsa in 2015, in addition to the price we are paying for incoming micro-lots, we will be donating 50 cents per retail pound sold back to the school they operate for children of their workers during the harvest season. There is more to being “sustainable” than just paying a good price for the coffee and/or what % of the retail price you are paying a grower.

Let’s look at this another way. Noah, you are quick to point here but take a look at what roasters are PAYING farmers. While I appreciate this study, in order to really see what a roaster is doing at the farm level, follow the money.

Do you notice any roasters on this list paying a relatively low price for their coffee? Do these roasters may have a high percentage point? Does that mean they are more “sustainable” than a roaster paying the farmer more? Does that mean they are helping the grower more? As a consumer, are you more apt to buy from a roaster with a higher retail percentage or one who puts more money in a grower’s pocket?

For me, this is difficult to answer without, again, knowing the whole picture. Is that roaster that is paying less, doing a lot of community support in his/her home time? Are they supporting additional projects at origin? Are they offering benefits to their employees? These are all things I would take into account before I gave a roaster my business.

These reports are only part of the picture. They help us move towards a greater level of transparency in the Specialty Coffee.

A report like this is not perfect for numerous reasons but it represents a starting point and they could lead to change within the somewhat “Trust me” mentality of many roasters.

Chuck Patton
Owner
Bird Rock Coffee Roasters

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