Why is my gourmet coffee so expensive?

February 02, 2012


Did you know that green coffee beans are trading near their 16-year high?



Here's all the gory details in a spreadsheet from the International Coffee Organization.



For instance, in 1998 a blended pound of green beans from around the world purchased on the spot market, containing both Arabica and Robusta, cost $1.08.95



In January 2012 the same blended pound costs $1.89



At least that's lower than the high in April 2011 of $2.31.



Coffee roasters tell me -- and I talk with many throughout the say -- that these coffee prices are crazy.



Just note that your artisanal microroaster pays a lot more for the coffee than the prices above.  First, they purchase much higher quality coffee than what's on the spot market.  Second, there are usually many middlemen involved.  And third, they are much smaller buyers than say Starbucks, Keurig and Folgers, so they can't get the best prices.



There is a silver lining to all this for us as coffee drinkers.  Many roasters tell me that they've been forced to find new sources for new beans.  And that they are increasingly searching out unique coffees so that they can command a higher price in the bag.  Roasters are essentially forced to innovate to get higher margins.



A key problem that I don't fully understand is why the actual growers in Colombia, Brazil, Sumatra etc. claim that they're being paid as little as ever for their green beans.



That's a topic of a later blog entry.



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