Typically, there are two main ways to price coffee: Differential pricing; and Fixed or Outright pricing

There are advantages and disadvantages to both these methods for each component of the supply chain.

With the recent fall in the market price of coffee, many of us in the coffee industry have worried about the consequences that low prices – prices well below costs of production – will have on the millions of small– and medium–sized coffee growers that supply over 50% of the world’s coffee. In an effort to better understand the problem we are facing, I decided to dig deeper into the profitability of coffee farming in Latin America over the last decade.  

For the 2017-18 harvest, the International Coffee Organization (ICO) estimated global production of green coffee at 158 million 60kg bags, an excess of 2.4 million bags compared to annual global consumption. For the 2018-19 harvest, the gap is expected to widen even further due to bumper crops in Brazil and Vietnam.

“The goal is to Move Coffee Forward, by creating the best sustainable supply chain.” – Alejandro Cadena