• Coffee prices at Friends Roastery

    by  • May 24, 2012 • Fireside Chat • 0 Comments

    When we began roasting in 2003, I was surprised to find that the best single origin specialty coffees were just pennies more than their lesser pedigreed (albeit still specialty grade) cousins. After years as a fine wine buyer in San Francisco, it was natural for me to gravitate towards the high end stuff. Besides, as neophyte roasters, we reasoned that if we started with the best beans and a great roaster (Yo, Diedrich!) if our coffees didn’t taste good, it was our fault and we could adjust and learn from our mistakes. In this way, working in a bit of a vacuum, we learned our craft and grew our cafe in Salem.

    However, changes were brewing in the specialty coffee sector. Consider this: coffee is the number two traded commodity in the world, next to oil. As a commodity, its price is impacted by supply and demand, and various market machinations. We’ve enjoyed record low prices for coffee for several decades due primarily to overproduction. As prices fell and remained historically low, farmers had no choice but to plant something else, or cut costs of production, impacting quality. This is the situation the specialty coffee sector (which deals in only the top grade of coffee) has attempted to resolve: how to improve quality in the cup when coffee prices cannot justify the additional labor and cost of inputs required to attain specialty grade? Add to that the challenges of working with different cultures, different languages, etc. It’s a complex and fascinating business, at least to me.

    Taking a cue from the fine wine sector, leaders of the specialty coffee sector (still in its adolescence, by the way) chased quality and signaled they would pay for it. (Hey, if someone was willing to pay $50 and up for a bottle of fine wine, why shouldn’t they pay significantly more for high quality coffee?) In a ten year quest for higher cup quality, specialty coffee importers and roasters tested price elasticity by upping the amounts they (and their customers) were willing to pay for the good shit. Auctions and other marketing efforts like The Cup of Excellence program rewarded growers with record prices, making headlines. Growers saw that they could command much more for great coffees than what the C indicated because coffees at this level were no longer a commodity, but aspirational. As a result, quality innovations burgeoned and farmers pursued best practices because there was profit in it.

    Now, as a coffee buyer, it’s more challenging to balance affordability and quality in our whole bean offerings. From our strong holiday sales, our customers have indicated that they approve of our direction. The long and short of it is that if you’re willing to pay for it, you can drink coffee that has never been better. As a roaster, Friends Roastery wants to go there with you, because we think a great cup of coffee is one of life’s greatest pleasures, and despite the price increases, still an affordable one.

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