The real cost of a cup of coffee

Years ago I was invited to join the "Philosophy of Food" class at Western University and share some of my thoughts on the economic and community impact of our food choices. One of the questions I was asked was how I see the organic and local food segment growing in the future. I mentioned that the organic food segment is the fastest growing segment in the grocery market and that I think the trend will continue. One concern that I mentioned and have been thinking about since is the potential for this healthy local food option to be priced totally out of reach for a large portion of our community that desperately needs access to healthy food choices. Organics are priced higher than conventional for some very good reasons but the trendiness could keep the price climbing once more of the large grocery chains get on board and market to their more affluent customers. Everyone deserves access to healthy, fresh food. I know that there are broader issues here too but have to start the conversation somewhere.

Pricing products is always a tough decision for any business. Here is a quick peek behind the curtain in the coffee industry. Green coffee is a global commodity and as such is traded on the commodity futures market in the U.S. Green bean prices fluctuate depending on global events like war, depression, oil prices, drought etc. The price in a year can change very fast. There is a cycle of high and low prices that one can notice if you look at 5 to 10 year trends. Organic and Fairtrade beans are priced at a premium compared to the C-Market price of the futures market.

Finished product price is also determined on the local market, and other input costs. There are many examples in business of companies entering a market and failing because they have priced their product incorrectly. I have been a part of many fluctuations in the base cost of coffee. I have chosen my pricing because I think it is fair for the quality of the beans I use and the market.

One of the points I stressed in the class was the power of our purchasing choices. In our culture, where we choose to spend our money can affect the economy very powerfully. That money is yours, you earned it, it is your energy and reward. Spend it where it will make the most difference.