Today we are taking another step in the direction of transparency, publishing the FOB-price for the coffee on every label, on every package of coffee we are sending out. FOB is the price of the coffee at the port at origin, before being shipped to us in Europe. We are sharing this, so you, as a consumer know what we have paid to the country that produced the coffee. The same measurement is used on the commercial market. At this time there are many coffee farmers going out of business due to the coffee price crisis, and we want to raise the awareness that the coffee industry HAS to pay higher prices to the coffee producers.
At Drop Coffee, we know that all of our coffees are economically sustainable, and we want you to feel comfort in knowing that the producers of our coffee are being paid for the work they are doing, and the outstanding products they are producing. Therefor, we are sharing these numbers, on every single package of coffee that leaves our roastery. We hope that this will increase awareness of economical sustainability in coffee.
What is the Coffee Price Crisis?
The market price has been fluctuating around 1 USD for about a year now, which for many is far below the cost of production for a year. It has been a long time coming, and there have been warnings from coffee producers and the coffee prices has not increased for decades, while the production and living costs have increased. Coffee production does not have a future with prices being this low.
The market price for commodity coffee is not sustainable. Coffee bought for the commodity price will make it impossible for small to medium-large producers to continue to produce in the future, as well as cooperatives. The only producers that potentially can continue to producing coffee at this price are the huge farms in Brazil that have mechanical pickers, and have already invested a lot of money in their production, making it cheaper to run.
If you want to learn more about the Coffee Price Crisis we recommend you to read blog post, webinars and listen to podcasts on SCA's page on the Coffee Price Crisis.
The price measurement. What is FOB - Free on Board ? And why USD?
By presenting the FOB-price in USD/lbs on the labels, we are using the same unit measurement and currency as the commercial coffee is sold at. t This simplifies the comparison of what we are paying and what the market price is. So you can easily compare what Drop Coffee is paying for coffee and what the C-market price is. But bear in mind, that the last years c-market price is unsustainable.
The FOB-price is the price paid for the coffee at origin, when it is packed in a container on a ship at the harbor. On top of the FOB-price there are shipping costs, importation costs - including staff costs, and delivery to our roastery that we pay to get the coffee to us. Thinking about that, the price we pay for the raw coffee to arrive to us is of course always way higher than the FOB-price, but we want to share what we are paying the producing country.
There are other measurement then FOB that could be interesting and meaningful to share, such as farm gate price, production cost and living costs in the country, but we are going to take it easy, as this is only step one.
How can you make sure you buy a product the farmer been properly payed for?
Use your consumer power! As a coffee drinker you can make an impact by asking the roasters you are buying coffee from what they are paying the producers. That act on its own puts pressure on the roaster to know their supply chain, and be conscience about the choices they make as green coffee buyers. If the roaster can stand for what they are paying, they will share these numbers with you or put extra effort in to find a way to precedent it to you. ALL coffee needs to be more expensive, we truly wish that the commercial coffee industry would start to pay proper prices to the producers they are buying from. It is the roasters responsibility to know their supplychain.