everyone wins when candid pricing meets forward planning
We use cost-plus pricing, which adds a fixed 10-45c margin over final costs. This is fixed based on timing – when a coffee gets contracted by the roaster.
Pre-Shipment: When roasters contract before or during the harvest, we select coffees for them as they arrive at origin warehouses, and then send samples for approval. This is the best option for those with repeat relationships, who have traveled to origin with us, who take part in annual planning or otherwise engage their reps early in the harvest.
Forward Offers: Once a lot sets sail it gets published on our forward offer list. These are confirmed offers with a set price, vetted profile and scheduled ETA…they just haven’t arrived yet. You can sign-up for samples upon arrival, or reserve with a forward contract subject approval of arrival sample.
Current Offers: Once a coffee lands and clears customs it moves to our current offer menu. These “spot” offers have been approved upon arrival and are ready to ship immediately.
Contracts are managed by sales reps. Read below, and contact your sales rep to learn more.
A contract is a commitment to purchase a number of bags at an agreed-upon price over a defined period of time.
There is no minimum size for contracts; good planning allows anyone to get ahead of the harvest and bring in more intentional coffees. After contracting, coffees can then be released as needed – usually for up 9-12 months from the coffee’s arrival in the US.
Contracts always depend on sample approval. You can request samples from our Forward and Spot Offer Lists, or ask your Sales Rep about what’s currently in-harvest.
Prices on our offer list are quoted Free on Truck (FOT) from the warehouse indicated. This means that the price listed includes fees charged by the warehouse for loading onto an outbound truck, but not the cost of transport to you.
GrainPro or Ecotact bag liners come standard for all offers unless requested otherwise. Harvest year is current calendar, unless indicated otherwise. Older inventories are automatically discounted.
Past that, it’s quite simple. Prices includes all costs directly associated with a coffee up until it is released from the warehouse…plus our margin of 10-45c.
The total markup between exporter and roaster covers these 6 items:
Let’s review. The offer price you see is a coffee’s export price plus costs directly associated with transport, capital, operations, supplier support …and a margin for ourselves.
So the only variables in pricing are (a) when you contract with us, and (b) the size of lot being imported. The earlier you book, the less risk we carry and the more volume we can commit to producers. The larger the volumes, the more we can spread fixed costs, making full containers cheaper than micro-lots.
The table below breaks this down by time of contract.
|Contract Timing||Cost over FOB||Margin||Total Markup over FOB|
We buy good coffee and pay good prices.
Our average FOB export price between January 2019 and May 2020 was $2.41 per pound across all pounds imported (or $2.78 per pound average across all lots/contracts irrespective of lot size).
The max price paid in this set was $12.00, the minimum was $1.70, and the most common price was $3.25.
FOB export price doesn’t mean much without proper context. For example, NYBOT in the date range for the above hovered around $1.00. We look at the FOB export price only as an indicator of how competitive a coffee is on the world market. Higher quality and more unique coffees command higher prices over time. But price is only part of the picture.
As a point of reference, the export prices we paid between January 2019 and May 2020 averaged $1.32 per pound higher than the C market price at time of contracting (or average $1.69 over C per pound across all lots/contracts irrespective of lot size).
When it comes to pricing every situation is different and deserving of special consideration. Our goal is to help farmers to maximize their harvest, to buy as much coffee as we can sell, at the highest prices we can sell them for, with as much of this going to the farm-gate as possible. And this looks different everywhere we go. However, wherever we go, there are some principles that remain the same:
We approach pricing as an open conversation, one that includes all stakeholders. We do not apply a single pricing rule across the producing world. Nor do we rely solely on negotiations to get us to the right price. While it is often complicated, it’s always worthwhile, and we are happy to talk about how pricing works for whatever supply-chain matters to you.