If you are used to drinking one or two cups of coffee every day, you have probably noticed that the cost of your caffeine habit can add up.
A bag of coffee can vary greatly in price, with some basic supermarket coffees costing less than $10 and a bag of single-origin beans from a specialty coffee shop costing more than $20.
It can be hard to figure out what’s the price that you should pay for coffee.
What are the different aspects that contribute to the price of the final bag of beans that you buy from the cafe? How much should you pay for green coffee beans?
And more importantly, does the $20 per bag ensure that the farmers get a fair share for their efforts?
Let’s answer all of these questions and look closely at the price of coffee beans. Hint - it’s not as straightforward as it looks.
Coffee Pricing Crisis?
The coffee is produced in over 30 countries all over the world, mostly in the countries located around the equator, such as Central America, Africa, and Asian Pacific.
Growing and harvesting can be hard on the farmers, who need to handle heavy loads, work all day in the hot conditions and handle exposure to agrochemicals.
The problem the coffee industry faces is that the farmers are often not properly compensated for their work getting less than the guaranteed minimum wage.
Because coffee is sold at low prices on a large scale and handled by big importers, farmers lack support and are forced to live in harsh conditions.
Sourcing Green Coffee Beans
Although there are many other factors that contribute to the final price of the beans that you get your hands on in your local store, the first step is to source wholesale green coffee beans for sale.
When sourcing the green coffee for sale, the roasters and cafes have two options:
1. Coffee Supplied Through An Importer
Getting your beans through an importer is a common practice within the coffee industry.
Sourcing coffee this way means the transport is easy to organize, the importers keep an eye on the quality of the beans making it more straightforward for the buyers to find the best price green coffee beans.
On the other hand, importers charge an additional price on top of the beans to make a profit and while they only act as the middlemen, they might benefit from the transaction more than the farmers themselves.
2. Coffee Sourced Directly From A Farm
Sourcing the green coffee beans directly through the farm provides more opportunities for transparency, relationship building, and lower prices.
Sourcing your coffee this way allows you to make sure that farmers are fairly compensated for their efforts and gives you an opportunity to support the community.
The trouble is that sourcing the beans from the farm comes with more difficulties when organizing the transportation and navigating the taxes as well as other associated costs.
How Much Do Green Coffee Beans Cost?
Let’s get about the specific numbers and break down the initial price of the green coffee beans for sale online or at your cafe.
The wholesale price for the green coffee beans can range anywhere from $1 to $6 per pound. This is the part that goes to the farmers.
While it is understandable that just like all the other profit-driven industries, coffee suppliers search for the best prices of green coffee beans, paying $1 for a pound of coffee encourages poverty and contributes to the problem.
Since not even the green coffee beans best brand is charging this little for coffee, where does the rest of the cost come from?
The additional costs associated with transport contribute around $0.5 per pound while the roasting adds around $5 to the cost.
This means that the roasting process, which includes packaging, administration, and the loss of water weight costs a lot more than the green beans themselves.
And still, this doesn’t include other fees associated with milling, quality control, export taxes, operational expenses, or banking fees.
How Much Pay For Coffee Beans?
When looking at the price breakdown, it’s easy to see that if your bag of coffee only costs $10, it contributes to the poverty of the farmers.
Even if you buy coffee that’s labeled as “direct trade”, you don’t know much much contribution goes directly to the farming communities.
But when buying bags of coffee from local cafes, they have a close relationship with the farmers, sourcing the beans directly, giving back to the community, and fighting for transparency and against poverty.
Buying coffee responsibly at a higher price from reliable suppliers has a positive impact and gives you the peace of mind that the farmers get more than a couple of dollars for their hours of work.
While you won’t probably find a retailer when searching for a “green coffee beans shop near me” on Google, it can be tempting to buy green coffee beans from Amazon or other wholesalers.
The green beans will come at a lower price, but without experience in the industry, it can be difficult to guarantee quality or fair contribution to the farmers.
And while the raw coffee beans price in India can be as low as $5 per kilo, you are still likely to pay around more than $15 in the Western countries.
Raw Arabica Coffee Beans For Sale
Since Arabica is grown in higher altitudes and has a lower yield than Robusta beans, it is considered a superior type of coffee bean from the two.
Arabica beans are highly desirable and 100% Arabica beans will inevitably come at a higher price point, whether they have been roasted or not.
The distinction between the two is not the only indicator of quality. Single-origin beans come with an SCA score that further determines the pricing. The higher score means better quality of coffee, which results in a higher price tag.
Organic Raw Coffee Beans Wholesale
What about organic coffee? Why is it more expensive?
If the coffee is labelled as organic, this means it has been produced without any use of pesticides, fertilizers, chemicals, or any other toxic ingredients.
Because of the high global demand for coffee, these additives are commonly used to maximize the production volume.
The additives have an impact on the farmers and communities who are exposed to the chemicals as well as the environment, leaving chemical residues in the air, water and releasing more carbon dioxide into the atmosphere.
Therefore, by choosing to buy organic coffee, you help to fight climate change as well as reduce the impact on the farming communities. Organic coffee is also better for you too and contains a higher amount of antioxidants than regular coffee.
How To Price Your Roasted Coffee?
As discussed, roasting can be the most expensive aspect that contributes to the price of your bag of beans.
This is because roasting is highly skilled process that requires machinery, training, storage as well as staffing costs.
On top of that, coffee shrinks during the roasting process as it loses water. This means that one pound of green coffee beans will not equal a pound of roasted coffee. This is one of the main reasons it can be difficult to figure how to price your roasted coffee.
To follow the generic formula, calculate the price of green beans upon landing, and them multiply that number by 1.25 to allow for the weight loss. This is going to be the actual cost of the raw coffee beans.
Other elements of the pricing will largely depend on the country. Locally roasted coffee in countries with strong economies and high living costs, such as Australia, will be much higher than coffee in Vietnam or even Greece.
How Does Starbucks Source Their Beans?
We know that buying your coffee from local specialty cafes is going to have a positive impact on the lives of the farmers as well as the environment.
But what about big coffee franchises such as Starbucks? Where do they source their coffee? Does Starbucks grow their own coffee beans?
Starbucks sources its beans from a variety of regions, including more than 30 countries in Latin America, Africa, and the Asian Pacific.
The good news for all the Starbucks lovers is that they take the quality of their beans seriously and make sure that their coffee is premium, Fair Trade, and ethically grown.
Since the coffee giant has a massive influence on the coffee industry, it is important that they are dedicated to making a positive change and even grow their own coffee beans.
The Starbucks coffee farm, Hacienda Alsacia, is located in Costa Rica, is 240-hectare big, produces sustainable coffee, drives innovation and also provides support to their other coffee-producing countries.
How Much Do You Spend On Coffee?
Is there more behind the price of your bag of beans than you have thought?
While spending $20 on your caffeine habit might not be easy, buying beans at a low cost contributes to the exploitation of the farmers and makes the cup of cheap coffee even harder to swallow.