I’m trying to pun here or find some analogy. Is it working? Is it misleading? Can you look past it or forgive me if I wasn’t as witty or insightful as I should be? I’m a semi-thoughtful coffee roaster that only has a BA in Music (from 20 years ago) and not an MFA in writing. Why even do this to myself? Gross. Please… don’t look at me.
Still, I think there’s some thing there and so I’m standing by it.
We’re in the middle of a massive sea change; a watershed moment (wink wink wink wink). And like, to a certain extent, the changing physical landscape that we live in because of climate change, American businesses (especially specialty coffee) have to reckon with the threats and new realities of living/working in an environment that does not resemble where we were 7 months ago, thanks to a reckless, short-sighted, and fundamentally selfish Trump administration. I’ll leave out the bit about how everyone that is smarter than me seems to think we’re changing into an autocracy faster than most democratic countries that have previously shifted into autocracies. That’s not totally the point and depending on the minute of the day I might still be optimistic that this thing can be remedied; that a subservient majority of our Legislative branch (a coequal branch of government, equal to a president or a judicial system) that has allowed so much bad stuff to happen to our country and to the people it allegedly represents (and is paid by) could grow a spine and stand up to insane shit coming from the executive and department heads. But, in the meantime, we the people need to live our lives and make ends meet. Moreover, we exist in a world, not on a screen. The coffee we drink is real, not content. And these are times to be in the world; to be in community. To enjoy the fruit of many people’s labors, to make use of the caffeine, to do something, even if it’s as simple as saying “hi,” buying a cup from a local shop, and drinking it there with people.
But that coffee is getting more expensive. We (customers and coffee purveyors) need to reckon with that. Because I want everyone at the coffee party. But with stagnant pay and a housing shortage that keeps the cost of safely existing in the world increasingly more expensive, maybe the party needs to change or we need to shift the focus of the party to still let everyone that we can in.
So, first, let’s chat about the C market: the global commodity exchange market that more or less dictates the daily value of a commodity and in this case coffee. There’s a lot behind it, but generally speaking when demand for a product is low, supply could become abundant and that would lower the value of coffee (*that’s true of everything like housing, btw). When the opposite is true, if demand is high that price goes up. Or if there’s a bad harvest, that crop is more limited, and the price might go up. Generally speaking, most specialty coffee buyers promise to pay (or “contract”) a certain amount over the daily C market rate for coffee that is higher in quality or perhaps had more work go into it’s preparation. I’m sure some might point out that this is a gross over generalization. But the point of this post isn’t examining the intricacies in market economics.
With that in mind, let’s talk about where the cost of coffee is now.
All of the following is from a weekly newsletter I send to wholesale accounts. While some of this is geared toward folks who own or help operate cafes/markets, I still think it’s worth reading even if you’re not in the business of hawking coffee. Maybe it’ll even open a mind to what a business is thinking about, worried about, or dealing with.
FOR THOSE KEEPING TRACK, THE C IS STILL VERY HIGH.
At the current moment, maybe the only thing to note is that the C seems to have settled around $3.85 per pound, which is high. For reference, the highest the market's been in the last few years was $4.01 in April, but the months before it found peaks and averages kind of around $3.90 a pound. When I agreed to purchase La Colina (which in years past cost a lot less than where it is now), it was around that March-February time. So, if that's any indication of where things will be 6 months from now... things are going to remain expensive, especially if we all have to pay Trump Taxes (tariffs). All of that could change but I don't entirely believe that it will. Investors know that large companies aren't buying huge amounts of future contracts in coffee because of the outrageous Trump Taxes placed on goods from Brazil and India. Those two countries produce a lot of cheap, non-specialty grade coffee that large corporations (and small roasters, too) use/stock up on to keep prices cheap on grocery store shelves or at the gas station/deli coffee counter. Thus investors are betting that they can squeeze the sector again, that they will eventually run out of coffee and will need to purchase coffee at a very high price. It all sucks and reinforces itself. It's crazy that, of all the things a human could be working on these days, this is where folks decide to invest/prioritize their energy. Are we doomed? lol. I don't know. It's all disappointing. The upshot is that perhaps farmers are getting paid better when the C is high.
SOME RELATED THOUGHTS ON BUSINESS/MY EXPERIENCES/POTENTIALLY ME LOSING MY MIND IN FRONT OF YOUR VERY OWN EYES.
These last seven years have been an interesting time for me. My business started in earnest in 2018 and a lot has changed. When I began, I genuinely wanted to offer great coffee that was priced approachable for folks. But over the last few years, that premise (if it was ever real to begin with) has become increasingly harder to do.
I've worked in some elite cafes and companies, specifically in the 2010s. Being able to work at these places seemed like a dream come true. I worked my tail off to get to what appeared to be coffee Valhala. But those dreams became complicated pretty much immediately when I noticed who wasn't invited to the coffee party. As a result and as I look back, frankly, these were some of my least favorite places to be a barista. The chit chat that I enjoyed with working class people, neighbors and artists at smaller cafes was suddenly replaced by taking orders from tech startup folk*, who mostly came in to schmooze a VC investor and not talk with me. A lot of chambray shirts and thick rimmed glasses, not a lot of direct eye contact, and a ton of people forgetting that they even ordered anything, which really got to me. It wasn't particularly satisfying on any level and felt like a lot of effort going into forgotten coffees. So, if I could find compelling coffees that weren't insanely expensive, keep my margins smaller, and roast them the best I could, I thought I'd be able to get folks that I wanted on the other end of the counter back into my sphere. This was the impetus for Blind Tiger.
Sadly, from crisis to crisis, since the Covid-19 pandemic started, this wonderful idea started to feel untenable, point black, and unsustainable. Coffee just got so expensive. (At the same time, anyone that knows a farmer knows they're not paid enough to do good, sustainable work, and when coffee gets more expensive vis-à-vis the c-market, they at least get more money.)
So, how do we move forward when everything's so expensive and unpredictable, especially if prices in most minds are unapproachable and we have to make ends meet on the playing field we're currently on? I don't know. There's probably so many creative ways to do it. But, I currently feel like no one in power right now is taking a paycut. I don't think you should either. I don't think cheap coffee is the way and quite frankly doesn't even seem possible these days. I also think you can't out compete the internet.
But I think you can lean into the fact that you're real and you're better positioned to make a great experience manifest immediately than any of those corporate titans. Lean into doing a great thing. Lean into the fact that you make great food, great coffee, and that your space is inviting... that it's actually therapeutic to be in a place with other people. Maybe it's a great time to reconsider anything and everything. Ya know, who says coffee needs to be 12 or 16 ounces? Maybe it can be less (*duh, of course it can be). If it was, maybe the cost of entry perhaps can be less or maintained. Serve it for-here.
This is where we were but here's where we are now. Businesses grow, change, and reorient all the time, even outside of societal upheavals and economic changes.
Enjoy the thing. Embrace and incentivize a fantastic time in the shop. I used to make such a big deal about never walking a coffee over to a table and choose to just yell a drink name until someone grabbed it. That was stupid, in retrospect. If you can, if someone's not there, walk a drink over and smile. Do interesting things. Have more community events. How about a loyalty to-go cup? Prufrock in London used to do this thing where the customer would buy these neat re-useable cups to get coffee to go with. Upon their next visit, they didn't have to worry about cleaning the cup because the cafe just had a set of sanitized loyalty cups waiting for use, that they could just swap them out every interaction. Worried about fee's from CC companies? Let's get some customer accounts going where they deposit funds in a lump sums. These are old ideas and maybe there's a great reason for why they're not in use, but maybe not, too.
Need to change the prices, take a big swing and price something as what it would be with a tip and do away with tips! Getting hung up on a tip is such a burden to have hanging over a barista. Free them, pay them.
What are your passions and interests? Is there a way that your place could express those and ditch other things that don't really make ends meet? If ever there was a time to do something, maybe now is the best time to do it.
Business is really hard right now and maybe even downright scary. These times are uncertain. We're all being squeezed and it sucks. Leaning into being great, being authentic, doing the best you can, empowering your staff to take a stake in the service (paying them, lol), fostering/growing your community, and getting those folks out of blankly accepting a dumb, new learned habit of buying things off of Amazon or DD or whatever, might be the way through. Things are going to cost what they cost. Make it worth it. Be fantastic.
*As I comment on the tech thing, I mean no offense and am not attempting to belittle anyone here if they are or do tech work. People have a lot of reasons to want to work where they work. I don't doubt that folks feel driven to do some work. And earning a living is crucial. But I can only relate to you that this time in my career felt like a wholesale negative and demeaning experience for me (and for a lot of co-workers). And as we all look back about Silicon Valley in those years, I know I'm not the only one that found that place to be riddled with problems and snake oil sales-folk. Even if this wasn't the case, I believe that I wasn't the right server for this demographic and that we were likely doomed to have bad impressions of one another, lol.