bluebird transparency report
Why transparency?
When I started Bluebird, I had no idea how unsustainable the coffee supply chain is. I was aware of the term specialty coffee and I assumed that as a consumer, if I was buying specialty coffee, I was helping farmers get paid more as generally the coffee was more expensive. The roastery selling the coffee was also usually marketing it as sustainable. When I learned that most of that coffee was super cheap, yet tasty coffee, that was still traded on c-price, I became pretty negative about the whole industry. Soon after that I travelled to Europe and I had the opportunity to spend some time talking to some fantastic roasters and business owners who were sold out to transparent trade. Why? To make the industry better by setting a new benchmark pricing system. One that is better for farmers and producers.
The reason we have decided to Trade Transparent is to be a part of the solution. The South African market is very price sensitive meaning that although we are paying the same $ price for our coffee, we cannot sell it for what our European colleagues can. We just run lower margins and get on with it.
Importantly, this is not a marketing strategy. Our company is doing pretty well without having to differentiate ourselves in this way. This is merely who we are, how we operate and we are happy to share these figures with you.
If you have questions, please email me on dario@bluebirdcoffeeroastery.co.za and I will make every effort to get back to you.
Understanding the numbers
C – Price: Coffee is a commodity traded on the C-market at prices determined by supply and demand, with little consideration for the costs of production in various countries. As I write this, the C-price for coffee is $0.94/lbs($2.07/kg) which is far below the cost of production in most producing countries. This leads to acceleration in the poverty cycle and in many cases, farmers are pulling their coffee trees and planting profitable crops. Unfortunately the vast vast majority of coffee sold in SA is traded on C-price.
FOB: Free on board is a shipping term that represents coffee packed into a container on a ship. Essentially, this is the amount of money that is paid at origin. FOB is only one specific incoterm but it is the industry standard for transparent pricing. Where possible we display farm gate prices. The problem here is that some farmers sell cherry, others wash and dry their coffee and sell it as parchment and other are paid for milled coffee ready for export. FOB remains the best standard for the Transparency movement.
Do we pay FOB? Nope. FOB is a snap shot price at origin before shipping, clearing, costs and profits for various exporters and importers, warehousing and finance costs. In some direct trade cases we pay just FOB plus shipping and clearing(Volcan Azul) and in others there are more links in the chain. As we grow and gain buying power, we aim to trade everything direct.
Quality: Coffee is graded by professional coffee tasters, called Q-Graders, on a 100 point scale. Instead of giving exact numbers, we hope to keep our quality scale relatable by using categories: Very Good (83 – 85), Excellent (86 – 88) and Outstanding (88+)
I am a very impatient human. I am most impatient with myself… raise your hand if you can relate 🙂 I am bootstrapping my way through the process of building this business. I believe deeply in what I am doing and I am pouring my personal time, money and energy into building a company that does good. We are a young roastery, but I want to be further ahead. Not in terms of profitability or sales volumes, but in the relationships we are developing at origin. I want to trade 100% direct, 100% transparent. This stuff fires me up!
If you’ve taken the time to read all of this, thank you. We don’t know much, but what we do know is that we cannot allow ourselves to profit at the cost of others. Whether its our coffee, bread, milk, meat or clothes, lets shop consciously and strive to do better every day!
Cheers, Dario
