The Price of Coffee
Hello Friends,
We are writing to let you know that our two core offerings, Chit Chat and Deep Thought, will see a price increase this week. Both coffees have been the same price since we started offering them four years ago. Like many businesses, we’ve seen significant increases in our material costs over the last 24 months. In order to better reflect the real cost of green coffee and rising freight and packaging costs, Chit Chat and Deep Thought will now be $17 for 12 oz bags and $90 for 5 lb bags, compared to their previous price of $16 and $87 respectively.
Additionally, our seasonally rotating core Single Origin offerings Mexico Pluma de Oaxaca and Peru Altiplano, plus our Decaf Colombia offerings, will fluctuate based on their market prices like our other Single Origins, rather than being set to a fixed price.
Given our commitment to transparency, it’s critical that our pricing reflects the real cost of green coffee. The entire value chain has seen significant upheaval over the last two years. That means that not only have we all seen increased pricing at home, but producers and sourcing partners have seen increases abroad. The new pricing model allows us to maintain the same quality you’ve come to expect from us while we continue to build long-term relationships with our producer partners.
These are complex and difficult times for all and we are thankful for your continued support.
Keep scrolling down if you're interested in a little further explanation of our stance on coffee prices and the current context of the market.
With appreciation,
The Carrier Team
A note from our coffee buyer:
We don’t mind paying more for coffee. It’s honestly our opinion that coffee has been traded at an unsustainably low price for a long time. Until the past year the commodity price of coffee has hovered around an average of $1.30/lb. It had never broken $1.60 and fell even as low as $0.90. It’s worth noting that these prices are indicating the exportable price, only a portion of which goes to the farmers themselves. It’s also worth noting that in almost all cases this is below the cost of production for the average Latin American producer. FairTrade certification, while difficult and expensive to attain, helps a little, but only guarantees a $0.20 premium and a $1.40 minimum floor. When prices are that low it doesn’t help much at all.
For this reason we have always leaned hard into paying more than the market and FairTrade prices, and in building relationships through fixed pricing models rather than pegging prices to Wall Street. Producers should be paid equitable prices for a good quality product, with better qualities earning higher returns. We confidently display our pricing and transparency model on our labels, and welcome questions, feedback, and even criticism.
In the last six months price volatility has upended the market for both commercial and specialty coffee. The commodity price spiked to $2.40 almost overnight. Truthfully we still think this is a low price, and it’s not like producers are reaping any benefits either. Unfortunately, costs of production have also spiked as prices rise for labor and other goods and services. Profitability for the producer has not become any easier, and many specialty coffee producers are finding it more profitable to deliver an unfinished product to commercial buyers for the market price (and a faster turnaround), rather than spend more time and inputs on higher quality. In response to these realities, specialty buyers like ourselves and our partners must respond with higher offers, and are reckoning with shortages in the supply of specialty qualities.
To complicate matters further, our logistics partners are dealing with unprecedented shipping container shortages and outrageous price gouging. Not only are containers extremely hard to book, leading to delays and uncertainty in arrival timing of new crops, we’ve also heard reports of containers costing as much as 10x the historical price when one can finally be found. Naturally these additional costs are passed on to us, and inevitably must be absorbed downstream by the consumer.
Don’t hesitate to reach out directly for further discussion on these complex issues.