Coffee Market + Price Adjustments
In an effort to continue to provide you with the best coffee and service possible, we feel the need to take the time to chat about what is currently going on in the global coffee market and how this impacts us at Farm Loop Coffee and our mission of providing unmatched quality and service to our coffee-drinking community here in Alaska.
At Farm Loop Coffee we place a great deal of value on industry transparency, and believe strongly in the importance of spreading awareness. While this might feel like information-overload, we encourage you to read through this post so that you can be the utmost informed on the current news in the global coffee market, as well as feel like you can put your trust in Farm Loop Coffee to provide Alaska with amazing specialty coffee in an informed and ethical way.
Coffee as a Commodity + a Glimpse at Current News and the Coffee Market…
Coffee is one of the world’s most heavily traded products. And as die-hard coffee drinkers, we’re really happy about this! We can go just about anywhere and be able to have coffee in one form or another–maybe not delicious, but it’s there for our caffeine fix. However, working up close with such a heavily traded commodity, especially when narrowing our scope to exclusively specialty-grade coffees, means we are constantly having to navigate an ever-changing market that determines prices based on a long list of both seemingly small AND large scale factors, including, but in no way limited to production costs and labor, certification and quality assessments, climate conditions and unforeseen weather events, economical factors, political influences, market conditions, and general supply & demand. This specialty coffee market is known as the C Market (Fun fact: C stands for ‘center’ not ‘coffee’) . The C Market is a global exchange where Arabica* coffee is bought and sold everyday and sets the base price for coffee trading.
Currently, the coffee market is seeing record high prices, and is projected to continue climbing before potentially dropping. The C Market is experiencing this rise due to supply shortages in Brazil and Vietnam, two of the world’s largest coffee producing countries. Due to drought in Brazil and excessive rainfall in Vietnam, there is less coffee available and prices naturally rise. In addition, there are logistical bottlenecks at several origins, increasing transit times. At Farm Loop Coffee, we strictly buy specialty grade coffee and aim to buy from importers that value the farmer’s hard work and financial well-being by prioritizing fair and ethical wages. Due to these standards, we buy coffee that is above the C Market base price, but is controlled by the C Market base price, and therefore is greatly affected by this rise.
If you’re curious to read more in depth about what the C Market is, we’ve included links at the end of this post that you can reference.
How we are Responding to the Current Market at Farm Loop Coffee….
Our standards for coffee sourcing have not and will not change. Our mission has always been to bring something new and delicious to our community, while prioritizing ethics, sustainability, and relationships both near and far. We will continue to seek out the best single origins and blend components that highlight different producers and processing methods around the world. We will continue to work with our importing partners that value the relationships they have with their producers, the land, and reflect that in their transparency. With this commitment in mind, Farm Loop Coffee is seeing a dramatic increase in the price of green coffee, and we are now having to pay significantly more for these coffees. In order to maintain healthy business practices in a business that already doesn’t have large margins, we will be making the necessary adjustments and pricing our coffee according to these market changes. In addition, running a business in Alaska comes with plenty of additional challenges such as extra shipping costs, higher operation costs, availability of supplies etc. However, these pricing changes mean that we’re setting ourselves up to be able to continue to navigate running a business in Alaska in the face of an increasing market, and continue to serve you and the businesses we partner with in the years to come.
How we are Responding to the Current Market at Farm Loop Coffee….
We truly value each and every one of our customers, and are deeply thankful for your support over the past few years. Due to this significant increase in green coffee prices, we will be increasing all 12 oz. retail bags by $1 effective March 17th. We will also be transitioning to a ‘market price’ system where different coffees may be offered at different prices according to their market price. We’ve done this before in the past, and we will continue to keep the majority of our offerings at the ‘base price’ of $23 per 12 oz. bag. As a coffee roaster and green coffee buyer, we have absorbed costs as coffee prices have been rising. However, we simply cannot continue to absorb these prices without it starting to affect the way we operate as a business and before it begins impeding our goals as a company. We cannot effectively serve and support our customers if we aren’t able to first support ourselves, reinvest in the business, and continue to grow. And while a $1.00 increase is not covering the whole difference in the prices we’re seeing, we are looking to meet our customers and partners in the middle, as times are tough for a lot of people.
Future Forecast?
This isn’t the first time the C Market has spiked and it won’t be the last. Dependent on climatic conditions in growing regions in the coming seasons, future harvests may be more abundant. However, it’s a lot more complicated than that and this process does take time. Here at Farm Loop Coffee are committed to monitoring the C Market and evaluating our pricing accordingly. We will continue to be transparent with you on our pricing structure, and, as always, uphold our coffee sourcing standards.
All the Best,
Farm Loop Coffee Team (Zoe + Kindra <3)
