Transparency report 2021
At Caffènation we believe that transparency is the way to change the world to a better place. 2021 kept us all stuck once more in this worldwide pandemic and it seemed to be the right time to reflect on the way we act, live and work. More coffee roasters are getting engaged to be more transparent and strive for an honest way of doing business with every party at origin. Globally, in the world of coffee, we stand to believe that the farmer is the most important person in the whole chain. Not your happy go-to barista at the bar around the corner, not the roaster behind the scenes and not even our friendly coffee traders. Being coffee farmers, they put in the hardest labour and expertise, but they are most often left with the lowest income. Sadly there is still a negative development on the other end of the chain. Market price for greens beans is variable and very often strangely low…
To be able to keep drinking a good cup of coffee, we need to make a change and create financial sustainability for those farmers. This change needs to be collective, something we decide on together. A pretty good start is to be transparant about our good intentions. Just saying you pay a lot or you pay the fair trade price is not enough. This is why we thought it would be a very logic step for Caffènation to be the first Belgian (coffee) company to sign the Pledge and join those who think and act alike. It is with these intentions we made our first Transparency report and we want to present it in a clear and transparent way to you. With good intentions and sustainable promises, this way it’ s no longer the loudest screamer who gets the attention, but the fairest person in the room.
In this first report, we want to show you more about our green coffees, which type of coffees we buy and whom we buy them from. In addition to this report, we want to join a project that we believe in. The Pledge is a project where specialty roasters produce a report each year for all the coffee they have bought. The report details the FOB prices ( see later for more explanation) that have been paid, and thus demonstrates that the purchasing system is sustainable for producers in the countries of origin.
By looking at all our purchased coffees, and the FOB price paid for them, we reach an overview. With this overview we get an idea of where we want to make a difference and where we want to improve the future.
F.O.B. & REFERENCES FOR A FAIR PRICE
F.O.B. price means “free on board”, which means the price for the coffee packed and stacked in a container at the port of origin. It is not the exact price that the producer receives for the coffee but, without a doubt, it is an excellent indicator to know if they have received a “fair price” for it. The price is stated as the price per pound (lb) which is equal to 453 grams (around 1 pound) of green coffee.
The reason why we use this F.O.B. and not - for example - the Farm Gate price (price paid to farmer) is because this is the most common way of communicating price and it is the decided way of communicating prices in The Pledge.
Specialty coffee roasters should not be guided by the reference price of commercial coffee on the stock exchange (C-market) since we do not play in the same league and it is an unfair price for a producer. This price is mostly around $ 1/lb FOB however the cost of growing specialty coffee is usually between $1,30 - $ 1,40/lb. Fairtrade prices go around $ 1,45 - $1,50/lb.
With that reference, it would be very easy to say that we pay much more for our coffee. As you can see in the report, our average payment is $ 5,73/lb. So, we can say we paid 573% more than the market reference in 2021.
This reference is a good way of showing how to be fair to the coffee producer. Since we don’t treat them as market numbers, we all know the hard work they have to do for producing quality coffee.
Thank god, now there is a project carried out thanks to hundreds of companies that have bet on transparency within the world of specialty coffee. It’s called The Specialty Coffee Transaction Guide. It’s a study where we can find the average payment in 3 years (2017-2020) of contracts for the sale of specialty coffees.
This study tells us that the average sale price in those 3 years is $ 2,71/lb. The vast ma-jority of the coffees that we bought during 2021 continue above this figure. But, with-out a doubt, we must continue to improve our choices when buying a coffee lot. En-couraging the importer to share the FOB price of the lot and therefore ensure that the price paid can maintain the sustainability of the producer. A big goal for the future.
TYPES OF GREENS
At Caffènation we choose to buy our coffees through an importer or by semi-direct trade. Most of our lots of green coffee we get through Sucafina Specialty in Antwerp and Nordic Approach in Oslo, among others. For our Kenyan coffees we travel to origin every year. We go to cup and choose our coffees for the following year. Because we don’t know the producers directly, we choose to get our greens in Belgium through an importer. This is what we call semi-direct trade ourselves. We choose this kind of process, due to paperwork, but especially because of the good relationship with our importers. For our Kenyan coffees we work with our friends at Kenyacof and for our Ethiopian coffees we work with exporter Tropiq. Due to the pandemic we were not able to travel to Kenya in 2021. However we can promise to tell you more about our trip early 2022 in next year’s report.
CONCLUSIONS & FUTURE PLANS
- DIFFERENT COFFEES : 35
- TRANSPARANT COFFEES : 29
- PERCENTAGE OF TRANSPARANT COFFEES / TOTAL VOLUME OF COFFEE : 82 %
Our percentage of transparency on the FOB price has been 82% in 2021, not bad at all, but we want to aim higher in the coming years. We would love to bring you a report fully filled with all the numbers, prices and producers of every single coffee we roast. Something we hope to achieve alongside, and with a little help from our importers and exporters.
In addition we want to bring this information about transparency of our coffees to our costumers, our partners and everybody interested. And this on a regular base. There-fore we publish every coffee we roast on our Wordpress site. There we already talk about the FOB price, producers and type of coffee, before putting it in our yearly re-port.
Go and have a look yourself at : caffenationfiltercoffees.wordpress.com