Commodity and Speciality Coffee.

February 05, 2021

So far we got to know a bit more about coffee’s life cycle, processing methods as well as we had a bit of an insight into coffee species and varietals. I mentioned in the previous blog posts that the commercial coffee world is dominated by two species, arabica and robusta. 

Now, as much as you probably won’t see ‘100% robusta’ on a bag of coffee very often, you will definitely see ‘100% arabica’ and you will hear the speciality baristas talking about the high quality arabica beans that they use. 

I think it is time to explain - at least briefly- the meaning of commodity and speciality as this will help you to understand more about how the coffee industry works. 

Commodity products are what you see on the supermarket shelves.  The commodity coffee industry is made up of big businesses like Illy, Costa, Nescafe, Kenco etc. This part of the industry relies on arabica-robusta blends or low quality arabica. 

Commodity coffee is produced on a massive, industrial scale. The coffee cherries are usually grown in carefully managed rows of trees and harvested by big machines, so you can imagine that the careful selection of ripe and unripe fruit doesn’t play an important part. There is also less attention towards the coffee processing as well as green bean defects which directly affects the quality of the product. 

Commodity coffee is usually sold according to the ‘C-price’. This is the price set by the stock market (did you know that coffee is said to to be the second most trade commodity in the world?). The C-price is a price of coffee quoted in US dollars per pound in weight. The price is not related to the quality of the coffee and so the farmers income depends largely on the activity of people trading options and other financial products on stock exchanges around the world. 

The unfortunate thing is that when the C-price is low, the money the farmer gets for their coffee can barely cover the cost of the production and does not allow them to improve the farm facilities, not even mentioning the lack of improvement of the farmer’s family and workers' livelihoods. 

Due to the lack of traceability as well as the low quality green beans used, commodity coffee is roasted to a very dark profile which destroys the unique, inherited flavours from the cherry and instead takes on a burnt flavour from the roasting process itself. 

Where does the specialty industry differ from commodity? 

The key aspects of that gap between these two is the quality of the product and the fact that quality is related to the price paid for the coffee. When farmers have an incentive to produce high quality coffee, it allows them to invest in their farms and contribute to the sustainable growth of the coffee community. 

Speciality coffee is harvested by hand which guarantees the harvest of only the ripe cherries. Careful attention to the process as well as higher quality green beans, grown in a more biodiverse environment contribute to the quality of the end product. 

More money and time invested in production as well as in the roasting process means that you as a consumer end up paying more for a specialty coffee than for a bag of commodity beans. Speciality coffee roasters will try to avoid tainting the coffee with flavours imparted as a result of the roasting process. Instead, we try to develop the unique flavours within these high quality beans.  

So when next time you see a bag of coffee priced £3.50 on that supermarket shelf, let me ask you to stop for one minute and think about how this £3.50 pays all those people involved in the process. Farmers, pickers, the importers, green bean companies, roasters, and in the end remember that the supermarket you are making a good profit on that bag too. There are a lot of people to be fit in that £3.50, hey? 

So, can you as a consumer make a difference? 

Yes, you can. 

Getting to know where your coffee comes from is one of the steps. So where shall we start? Let’s have a brief look at different ways that speciality coffee is traded. 

When buying a bag of coffee we usually can see the little symbols on the packaging saying ‘Fair Trade Certified’ but do we know what that means? And are there any other ways of trading coffee? 

The aim of Fair Trade is to support coffee producing families' livelihood, by making sure that they are paid a fair amount of money for their job, where they can improve the farming systems but most importantly provide their families with food, clean water, education and health care. You can read more about it here. 

Unfortunately, Fair Trade doesn’t always work so well in practice and in some ways, it is less relevant within the speciality market, where farmers can expect to achieve higher prices for their coffee. We’re not going to go into that here but if you want to read more about this issue, you could start here.  

The specialty world started to adapt new ways of trading coffee, one of them which has been popular in recent years is Direct Trade.

Direct Trade happens when a roaster buys green coffee straight from the farmer. Direct Trade pays attention to the relationship between these two parties. It highlights transparency and traceability of coffee trading. When done properly it can be beneficial to both farmers and roasters. 

As a customer you feel that the money you paid for that cup or bag of coffee will be reinvested in the cycle of coffee production. I think it makes you more aware about the people who are behind a barista or a coffee roaster. There are some dark sides to Direct Trade too, we won’t be going much into that but I recommend reading an article on Perfect Daily Grind - What Does “Direct Trade” Really Mean? edited by Julio Guevara. 

In James Hoffman's book The World Atlas of Coffee, we can also read about 'Relationship Coffee', which he describes as ’’an ongoing relationship between producer and roaster.’’ These two parties will work closely in a collaboration to improve the quality as well as the pricing of the coffee. He refers that for such a trade to have a positive impact, the roaster has to buy a sufficient quantity of coffee. 

Most speciality coffee is traded through an ‘importer’. The importer will work year round to develop relationships at origin and the better ones will help growers improve the quality of their coffee and even arrange financing for the farms or help in other ways. The best importers work ethically and transparently, often with the same growing communities for many years. 

I hope now you have a better understanding of the coffee industry and that this knowledge will lead you to make better, more conscious choices in the future. 

Until next time, enjoy your daily brew! :)

Magdalena.

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