Serving People Serving Coffee Since 2005
Issue link: http://baristamagazine.epubxp.com/i/853621
F O A M : N E W S + T R E N D S ROASTING COMPANIES KICK OFF INITIATIVES FOR INCREASED TRANSPARENCY, PRICES TO FARMERS LOW PRICES PAID TO COFFEE FARMERS is an ongoing struggle in our specialty-coffee industry, and it's an issue that many supply-chain actors have tried to combat through a variety of approaches. In recent months, two quality-minded roasters have introduced new tactics geared toward providing better transparency and creating a dialogue around the prices being paid to farmers. Earlier this year, Viroqua, Wis.–based Kickapoo Coffee announced on its website a companywide mandate to pay a minimum price guarantee of $2.75 FOB per pound of green coffee. (FOB stands for Free on Board, which is commonly used to approximate the fi nal price to farmers.) A short time later, Springdale, Ark.–based Onyx Coffee Lab introduced a transparency section for each coffee sold on its website listing how Onyx scored and bought the coffee, what they paid for it, and what coffee mar- ket prices were at that time. In both cases, the roasters are revealing the specifi cs of their pric- ing in order to bring attention to the questionable economics of coffee production, which includes many coffee farmers currently earning per-pound prices that are lower than the cost of production. At Kick- apoo, Caleb Nicholes—who co-owns the company with T.J. Seman- chin—says the company decided to implement a price minimum not just to pay a higher wage to farmers, but also to contradict a worrying trend they observed. "The coffees that we get today are far superior than ever before in the history of coffee, and the prices that we pay on average are far lower than they've ever been," Caleb says. "Those are two lines moving in the opposite directions of where they should be going, and that is a problem." By instituting a price minimum and publishing a post to its website explaining its intentions, Kickapoo intended to jumpstart conversations around farmer livelihoods, acceptable prices for green coffee, and trans- parent sourcing. In the months following Kickapoo's announcement, Caleb says the company has been inundated with feedback—some supportive, some curious, and some even critical. "It was neat to see the amount of industry interest, as well as to see some spinoff conversations happening as a result," he says. "It was good to see people questioning and challenging us, and really thinking through what these prices mean to the whole supply chain." Caleb says that while the $2.75 minimum FOB price—which Kicka- poo says is among the highest published minimum prices in specialty coffee—is an important starting point, the roaster would ideally like to drill down even deeper to what is being paid to farmers. Caleb says that the FOB number is the price paid to exporters, and it may not be directly tied to the price paid to farmers. While Kickapoo tries to work with exporters that value transparency and give farmers solid returns, Caleb says the company would eventually like to gain enough transpar- ency in its supply chain to strive for a minimum "farm-gate price," or the amount going directly to farmers. "I think that number is really the gold standard," he says. "There's just a lot that can happen between the exporter and the farmer as far as the fl ow of money is concerned." Until that extra transparency can happen, Caleb says Kickapoo will stick with the minimum FOB price, and will increase the minimum as they're able to. Over at Onyx Coffee Lab, Jon Allen—who co-owns the company with his wife, Andrea—says they are committed to paying high pric- es for green coffee from an ethics and sustainability standpoint, and PHOTOS COURTESY OF KICKAPOO COFFEE Kickapoo Coff ee co-owner Caleb Nicholes, pictured, says the company instituted a $2.75 FOB minimum price in an eff ort to jumpstart industry conversation around the prices paid to coff ee farmers, and to contradict a trend of farmers being paid less money as the quality of their coff ee increases. 22 barista magazine