About C-Market Value, Pt. II

By Jeremiah Frazier, Wholesale Account Manager

First and foremost, we need more specialty producers. As brokers and buyers, it would be prudent to encourage specialty grade production where climates allow, folding in c-market producers. We can accomplish this through stronger institutions: institutions that work with producers and buyers to accomplish compromise (over the politics of trade rhetoric), and that educate producers on both agricultural practice and marketing! Farmers have to be able to market their coffee to potential buyers without restraint. Incorporating destination marketing will also encourage tourism and educate consumers about the farm aspect of our industry, leading to an increase in consumer threshold. If we are just “cherry picking” (no pun intended) the best coffee from the best producers, we are not providing a sustainable model for future generations. As consumption grows, so will the number of buyers looking for the “best” coffee to offer their customers.

At the cafe level, it’s important to connect consumers with farmers, creating a bridge from origin to the café. Tell the story, and not just the romantic novel scripted by flavor notes, but a hardline biography that illustrates the trials and hardships of our trade. Consumer threshold needs to parallel specialty growth and cost.

This is by no means an adequate representation of the entirety of the situation. I have no answers about what these institutions should look like and how they should perform, or who will fund them, or how to keep them unbiased. I have no answers for producers who have been operating in the c-market who want to participate in the specialty market. I have no solution for increasing consumer awareness and threshold.

When we take everything into consideration including trade differentials, US dollar value, projected volumes from Brazil, climate change, leaf rust, inflation at origin, and mill pricing, we begin to see a more complete picture the coffee industry as a whole.

Despite the dark clouds on the horizon, there is a ray of hope! Currently, there are several organizations working on genetic hybrids that can combat leaf rust and withstand climate changes. The US market is beginning to stabilize after its 9-year bull run. Nations like Vietnam and China are dedicating considerable resources to Robusta production (not my preferred cup, but the quality is getting better). Producers and buyers are negotiating long-term contracts. The quality of hybrids is increasing, as well as the quality of specialty grade. We live in the best time for a great cup of coffee.

After writing this, my fears for our industry have lessened to mere concerns about our industry. After speaking to several brokers and professional coffee buyers, it seems the current state of our industry is exactly that: the “current” state. I remain hopeful that smarter people than I are working on a better future for our industry.

Take away points:

  • We need to be better stewards of our industry, educating ourselves and staff about the entire industry, not just the specialty aspect.
  • We need to look at our industry as a whole to find a sustainable solution. Including all markets and past performance, all positions in the supply chain.
  • Even though we operate at two different levels, both markets are entangled with each other. If either fails, the other will be forced to carry the burden.
  • To keep markets fair for farmers and buyers, a tertiary model that accommodates all parties and qualities must be initiated to protect prices for both producers and buyers.

We can make a difference! We can make every experience across our counters and cafes a genuine one. We can continue to educate our consumers about the current state of both markets and how that will influence the cost of their daily coffee. We can seek out producers who are not participating in the specialty market and help them grow! We can purchase with integrity!