This is a proud and exciting time at Royal as we have submitted contract data to Emory University for the third iteration of the Guide. That’s right, Royal Coffee is now a data donor for the Specialty Coffee Transaction Guide. Being a data donor entails providing green coffee contract information to Emory University. They then anonymize this data and analyze the green coffee contracts to create better context for specialty coffee prices, taking into consideration country, region, lot size, cup quality and price. The reasons we decided to participate are illuminated in the blog and podcasts below, but a quick summary is this:
1. The price crisis. We face a price crisis in coffee that threatens not just the livelihoods of the millions of small farmers around the globe, but also the foreseeable supply of differentiated specialty coffees on which our companies and industry depend.
2. Timing. The Specialty Coffee Transaction Guide versions 1 and 2 has been looking primarily at the top tranche of the specialty industry. As a known consequence of the progressive firms who made up the initial data donors, the prices, quantity of data, and contract details have skewed to the high side, potentially distorting the picture particularly where people at origin might use it. Emory and the SCA have themselves recognized this and sought out buyers like Royal who deal not just in boutique specialty but also in significant volumes of the 80-84 point coffees which make up the majority of production from most specialty farms and the majority of contracts signed throughout the world. We will update you when the third version of The Specialty Coffee Transaction Guide, which will include our data, is available.
3. Equitable returns to producers. Transparency itself is not a goal, it is a tool to achieve a goal: more equitable returns to producers. At Royal, we are committed to finding ways for this contract data to ultimately be of the greatest and most impactful use. Our position at the center of the market gives us some unique insights which we feel will be invaluable pushing forward. More to come, so stay tuned.
For now please utilize the resources below to educate yourselves, your employees, and your clients on this most-critical of industry issues.
Royal Coffee Blog: Thoughts on The Pledge & Price Transparency
by Max Nicholas-Fulmer with Chris Kornman
It started last week: a sudden and noticeable uptick in clients asking for FOB prices on coffees they’d already bought from Royal, some over a year old. It did not take long for our crack trading staff to surmise this might have something to do with The Pledge, a nascent movement among a small but rapidly growing group of roasters towards price transparency back to the FOB level.
The Crown Podcast Episode 03: Price Transparency & Where We Can Go From Here
Richard Sandlin sits with Counter Culture Coffee’s Coffee Manager, Katie Cargulio, Royal Coffee’s CEO, Max Nicholas-Fulmer and The Crown’s Education and Lab Manager, Chris Kornman to discuss a wide array of topics centered on the Specialty Coffee Transaction Guide, The Pledge, Fair Trade, Counter Culture Coffee’s Transparency Report, Meister’s Interview with Chad Trewick on The Discomfort Zone Podcast, price transparency, equitable trade, the “C” Market, and a lot more.
The Crown Podcast Episode 06: Working Towards Transparency Panel – The Specialty Coffee Transaction Guide
Join Max Nicholas-Fulmer for a panel discussion with Royal Coffee’s Jeri Idso, Mayra Orellana-Powell, Emory University’s Peter W. Roberts, Reciprocafé’s Chad Trewick & Capricornio Coffees’s Luiz Saldanha centered around The Specialty Coffee Transaction Guide.
About The Specialty Coffee Transaction Guide
There are big questions facing specialty coffee sellers and buyers.
According to numerous studies in different coffee-producing countries, prices paid for green specialty coffees often do not cover the full cost of production, let alone support thriving livelihoods for farmers and their families. Unless price discovery moves beyond an exclusive reliance on commodity price references, farmers cannot expect these prices to evolve in ways that make them excited about remaining in the industry. As such, more and more farms will struggle to find a next generation to take over. This makes buyers increasingly concerned about future supplies of the different coffees that are needed to push the industry forward.