We think a lot about coffee!  Our daily ritual usually takes some of the guess work out of what the process looks like but when we take the first sip, certain thoughts come to mind.  It stirs the emotions and reminds us that we can conquer the day ahead.  We may then be thinking of our “to do” list and now have the energy necessary to accomplish great things.  Some of us may also need that morning cup to fully engage with others in a meaningful way.  But once we get settled in, how it tastes is definitely on the list of important reasons to get out of bed.

Usually not on the list of conscious thought is how do the flavor attributes of this important part of our day relate to the economics of taste.  We know there is value in the basics of drinking coffee in the morning.  It helps awaken our senses, makes us more productive, and for some-more relatable.  But we also find value in how the coffee tastes.  To help put this in perspective, it’s important to understand how value is assessed in coffee’s flavor attributes.

In specialty coffee, we use a cupping scale (among other things) to assign a score.  To be considered specialty the coffee needs to score an 80 or above based on certain flavor attributes.  These include fragrance/aroma, overall flavor, aftertaste, sweetness, acidity, and body/mouthfeel.  There are other factors that go into a coffee’s “specialty” status but this is the foundation of making the distinction.  The definition of specialty coffee has evolved to encompass not only flavor attributes but the contributions of participants in adding value to the final product.  This includes you as well!

The value (price) of a coffee typically increases with a coffee’s complexity in the cup.  If there are objectively identifiable flavor attributes, “that tastes like blackberry jam!” vs. “that tastes like berries”, you would expect a higher scoring coffee. This higher score should also increase the value to potential buyers looking for interesting and memorable coffees. Using our example, if something reminds me of picking blackberries as a kid with my grandmother, I now have a psychological connection between flavor (taste+aroma) and a fond memory. Which would increase the value!

Coffee cupping (a standardized method of sensory evaluation) is practiced at each step along the way from producers to roasters to objectively assess value between supply chain participants.  When a coffee is defined as specialty on the cupping table, the conventional model price is derived from the Arabica “US Coffee C Futures” commodity price plus a differential (premium).  These coffees are typically purchased through specialty importers and involve numerous participants including the producer, coffee mills (wet and dry), exporters, importers, and other intermediaries who all get compensated for their services.  Another pricing model is called direct trade and is based on a mutually beneficial relationship between producers and roasters.  At Vantage Coffee Roasters, we are excited to be venturing into the latter.  Both models are necessary for logistical reasons, but direct trade typically benefits the producer (as well as the roaster) in different ways.  Most importantly, relationship coffees are more sustainable for individual producers.  Although it takes time to build strong relationships, knowing you have a specific buyer for your coffee every year reduces the risk of being tied to market fluctuations and the volatile price changes they create on a macro level.  If the “C” market goes up (as it has over the last year), you get the benefit of higher prices for your coffee.  In a market downturn, the opposite occurs.  Using direct trade, we can agree on a price point that fairly compensates the producer for their efforts regardless of outside market forces.  We will venture into that discussion on a future post.  In the meantime, enjoy your coffee!