We Are Raising Our Coffee Prices (but it’s not for reasons you may think)

We are raising our coffee prices, but it’s not because of current inflation or because of higher commodity coffee pricing. We are raising our prices because we need to pay our specialty coffee partners more and nurture our current channels to ensure we can continue to purchase high quality coffee for decades to come.

It’s 2021, and unless you are avoiding all media – and we wouldn’t blame you for this – you have surely heard about inflation in our economy.  The pandemic shut down production and logistical operations worldwide leading to many bottlenecks and roadblocks as economies have staggered back open. A spike in American consumer demand as a result of government stimulus and a desire to return to normalcy has led to inflationary levels that many of us have never experienced in our adult lives. If there is a silver lining to this mayhem, it’s that most of us in the developed world should now better understand just how goods from abroad actually get delivered to our front doorsteps.  It’s not actually Amazon magic; many human hands are still primarily involved in the production and trade of goods. Machines and AI have yet to supplant everything in our global economy. So when large populations must quarantine because of a deadly virus or decide not to return to work for whatever reason, the previously seamless movement of billions of products gets disrupted.  Never has there ever been a greater case for buying local.

Commodity coffee prices soared this past summer when Brazil experienced a few back-to-back cold snaps, preceded by a drought. As we outlined in our previous post about fair trade and organic certifications, the number one most influential factor in commodity coffee pricing is the weather in Brazil. Moreover, fertilizer prices have soared as have freight associated with supplies used in the production process. With a predicted drop in the supply of global coffee because of this weather, investors in the futures market have raised the price of coffee.  Higher priced coffee + supply chain disruptions = coffee purveyors charging more for coffee. In fact, the price of coffee has grown by an estimated 53%.  Check out this read if you want more details.

But guess what?  Higher coffee prices can be a good thing. The historically low – abysmally low - coffee prices that we have witnessed in the past 5 years have led to many growers abandoning their coffee fields and switching their crops to other commodities.  Younger generations  of coffee growing families have fled the sector instead opting for professions and opportunities that avoid the instability associated with a price that is out of their control and weather patterns that are increasingly placing the viability of coffee production at risk.

We are raising our coffee prices, but it’s not because of current inflation or because of higher commodity coffee pricing.  We are raising our prices because we need to pay our specialty coffee partners more and nurture our current channels to ensure we can continue to purchase high quality coffee for decades to come.  Increasing our coffee prices aims to tackle some of the challenges associated with scaled supply chain economics that has never benefited the producer on the ground. We feel strongly that working with our community here via education, transparency, and open dialogue, we can leverage our position to invest more in our partners overseas. In paying our partners more, they are afforded the opportunity to invest more in themselves, their families, and their farms.  They, and the younger generations that will follow, will have an incentive to continue to grow coffee, to employ best practices associated with the best tasting specialty coffee, to take risks, to purchase what might be necessary to stave off climate-related catastrophes, and to continue to partner with Snowy Owl Coffee because we will be a source of stability in an inherently unstable and risky trade.

Historic C and Fair Trade Coffee Prices: 2015-2021

Source: MacroTrends

Current prices paid for Snowy Owl Coffee blend inputs (Costa Rica, Colombia, Congo) and single origin coffees.

Our business sits on the balance between two very different markets- green coffee and roasted coffee. We serve a customer that can afford a $3.50 cup of coffee and a grower who is lucky if he or she receives $3.50 per lb of green coffee grown, picked, processed, and bagged. As a consumer we might not think about global coffee production when we purchase a cappuccino or a bottomless cup of coffee at a diner. It might even be hard to conceptualize what are the questions we should be asking: Should we be buying organic?  Fair Trade? Bird-friendly? Do I even have time to think about this? Coffee is complex. But helping people is a simple decision. And we know that in raising our prices, our ability to keep paying more for delicious coffee – and helping our partners – is solidified.

Sustainability has become a buzz word in the coffee industry, and we have a lot of work to do on all fronts; social, economic, and environmental. But economic feasibility for specialty coffee producers is attainable, and that begins with specialty coffee roasters, like Snowy Owl Coffee, committing to pay even more for our green coffee and demonstrating to our partners on the ground that we are here with them for the long-haul. In an era of growing awareness of just how many human hands overseas provide us with the goods we enjoy every day, we publicly declare our commitment to paying more, and dialoguing with our customers about why we want to pay more, irrespective of the economic forces that may play out over the next 20 years.

Ethiopia Kolla Bocha

We're very excited about our new single origin offering, Kolla Bolcha, via our wonderful partners at Red Fox Coffee Merchants. An exceptional Ethiopian coffee, Kolla Bolcha came about partially because of the investment of the nonprofit organization Technoserve. Ten years ago, the Agaro region where Kolla Bolcha is grown was not known for high-quality coffee. What changed?

With the help of Technoserve, the farmers in Agaro were able to purchase a Penagos coffee pulper and began to adopt a washed process for their beans, rather than the natural process they used previously. The end result of the collaboration between the Ethiopian farmers and Technoserve is the coffee we enjoy today.

The farmers of the Agaro region are far from the only coffee growers who have benefitted from the assistance of Technoserve, which is why we'd like to highlight this exceptional organization and give consumers an awareness of who they are and what they do.

Technoserve was founded by American businessman and philanthropist Ed Bullard in 1968, while he was volunteering in Ghana. He realized that by providing underprivileged producers with access to funding and information (i.e. giving them access to the privileges he himself enjoyed) they would be fully capable of producing high-value products on their own. 

Ed's intuition proved to be correct. Since the organization's founding, Technoserve has improved the lives of hundreds of thousands of producers in developing countries through training, funding, and market access. The organization has focused much of its effort toward empowering women in particular.

So successful has Technoserve been at achieving its mission, that in February of 2020, it was awarded the National Coffee Association's Charity of the Year award. Additionally, major nonprofit watchdogs Charity Navigator and GuideStar have consistently rated Technoserve highly. Technoserve also partners and coordinates with other aid organizations, notably USAID.

Snowy Owl is proud to recognize the efforts of Technoserve and to serve coffee that has been facilitated in part through their efforts.