Community, Not Commodity: Navigating necessary changes in coffee

Andrew Gough, owner at Reverie Coffee Roasters, discusses coffee pricing and why people must always remain the focus of any business enterprise.

What goes through your mind when you crave a cup of coffee? Do you have a daily ritual, or are you the zombie-like/get-out-of-my-way, kind of coffee consumer? Have you taken time to really consider the thoughts that make your decision to brew a cup at home or pop into your local coffee shop on the way to work? Perhaps you are fueling up your car at the filling station and the ad for a steamy cup of coffee warms you enough to run inside to snag a cup.

For me, as a business owner that, at the surface, is in the business for roasting and selling coffee in many forms, it seems damned important to know what makes people tick when it comes to their cup of coffee. As of 2022, coffee is consumed daily for about two-thirds of Americans, a trend that is tracked annually by the National Coffee Association. Coffee is an important part of the daily lives of people worldwide, and it's a growing trend right here in our backyard.

So, when economic factors, such as the commodity price in coffee suddenly takes a sharp turn up, people start to notice. Coffee bean and drink prices begin to rise, conversations start to take place in the news and social media, and assumptions begin to be made for what could cause this thing we LOVE and depend on to start to cost so much. Maybe too much, for some (which is a shame!). And it’s a real problem depending on where you stand in the coffee value chain.

Before moving forward, I wanted to make a few assumptions to establish a baseline understanding for every stakeholder involved in the conversation.

• Most people reading this will likely come from The Consumer side of the value chain. If you are a business owner selling or serving coffee, you are also The Consumer.

• Reverie (and every other coffee roaster and cafe operator) is who I consider The Middle People.

• Our support systems, including the green coffee importers and suppliers that transport coffee to us, are also The Middle People.

• Farmers that grow the coffee we purchase are just that…The Farmers.

A Crisis, or a chance to change?

Green coffee prices have risen to historic prices the last few months. We’re experiencing the highest pricing change in the 11+ years Reverie has been roasting coffee, and the highest prices in recorded history. The commodity price of coffee increased over 50% since early October 2024, and about 100% in the last year. To many, we’re knee deep in a crisis. But is there a silver lining to the price of coffee being higher than ever?

This is not a story about price. This is actually a story about people. I chose to approach the topic this way because it is too easy to try to understand a complicated situation such as this if we only consider it from your unique position. And if you only are aware of one position, you will miss out on the more complete story about coffee and the price we pay. And if we are unable to see the value of people in the orchestration of what is truly a remarkable feat - the growing > harvesting > milling > sorting > transporting > storing > roasting > distributing > brewing - we can possibly think twice, or at least more intelligently, about changing your routines and habits when something like a coffee price crisis suddenly emerges.

Coffee pricing index

The truth in the matter, the coffee price crisis didn’t just happen overnight. The current trend in the coffee price index rising began in the late summer of 2023 and has rapidly risen the last few months to the highest levels the market has ever seen in the history of the industry since it was first measured over 70 years ago. So, what is this market index?

The C Market, or C Market Index (C = Central, not coffee, but everyone thinks it does), is essentially the stock market for green (unroasted) Arabica coffee prices. It was introduced into the industry as a way to help stabilize the fluctuating price coffee buyers pay for the beans grown around the center of the globe. As investors became savvier, the opportunity to increase the investment opportunity in coffee grew on a global scale. And while the price market for coffee may have become stable over time, the effect of the C Market has created problems that continue to impact people to this day. And it a very difficult way.

A fluctuating market

One major flaw in the C Market Index is its utilization of one major coffee producing country as the baseline for pricing in the entire global industry. What could possibly be the benefit of this? My uneducated assumption would simply be in the impact of Supply vs Demand. Brazil has historically grown about 40% of the world’s supply of green coffee annually, therefore the gold standard for most coffee pricing is based on this one country alone. It’s also important to know that the 2nd largest coffee producing country is Vietnam (about 15% global coffee production), though it grows more Robusta coffee than Arabica. Robusta is the lower-quality cousin to Arabica, the primary coffee we consume here in America.

While the green coffee market has many variables that can influence the price of coffee, supply and demand may be the simplest to understand. The last year and a half we’ve experienced a steady rise in the price of coffee due in part to back-to-back weather events caused by the El Niño and La Niña effect (temperature change in oceans). The predictable weather patterns the last few years have affected the investors feelings about the probability for ideal harvests, which has driven up the price in anticipation for a shortage. Brazil has reported devastating drought conditions for the last year, and in 2024, Typhoon Yagi hit the northern part of Vietnam, killing 60 people and decimating the region with floods and ruining thousands of hectares of coffee plants. All of this adds to the instability of supplies, but also the investor sentiments about the near future of coffee.

And the production forecast for the remainder of 2025 is tepid, at best. There must be two significant events that happen in order to soften the market. Brazil must have a great harvest in early summer (and ideally a bit of rain on the way), and then a favorable report of the next crop flowers setting in late summer/early fall. Only after these two events occurring can we hope for changing pricing. But that may not matter depending on what we do today. More on that later.

As a coffee buyer, the prices Reverie has paid since 2023 has steadily risen to its historical highs. And while we continually aim to provide better value in our products through the offerings we choose to roast, we are constantly being challenged by the perceptions and concerns of the customers who choose to buy our coffee. When the cost of our supplies rise, we begin to get nervous and worry about if or when we may be faced with the difficult decision to raise prices. This is the worry of most business owners. Will my customers leave if they are sensitive to the price of coffee? The last time we increased our prices to our wholesale customers was in June 2023. Before that, it was probably 2016. It was so long ago I don’t even remember.

The reality of the C Market Index and its relationship to the farmers is often blurry unless you are in the industry or an aware and conscious consumer. The tool that was designed to stabilize the coffee market has an unintended consequence. And this is where we begin to expose the disconnect between the commodity and the community.

The disconnection is all about equity. The C Market Index is closely related to the price that farmers receive for the coffee beans they contribute to the supply. When the market price fluctuates up or down, they are essentially fiddling with the price they may be receiving depending on market conditions (and a bunch of other factors) on a given date when the supplies are valued based on the market rate. Plainly put, when the prices go down, they receive less per pound, and when they go up, they receive more for every pound they harvest. This sounds all fine and dandy, until you consider that the average price of green coffee has historically been less than the cost to produce it.

Source: ANACAFE, 2021

For example, in Guatemala, the estimated cost to produce a pound of coffee in 2021 was around $2.40 per pound green equivalent (USDA REPORT). During harvest in 2021, average green coffee market index price ranged from $2.20 to $2.50 per pound. It was $1.10 to $1.50 the same period the year before. It’s easy to see a problem here.

What this simply means is it often costs more for smallholder farmers to produce the coffee than they receive. And there’s rarely a guarantee for what they will receive for the work they do. This is in essence a reality industry insiders have always known. Farmer equity is the heart of many coffee professional’s motivation to improve the industry we love. But when it comes to changing systems deeply seeded in inequities, it’s hard to make a major, meaningful impact when we’re talking about billions of dollars, millions of farmers, thousands of roasters, institutional investors profit objectives, and massive gaps between our honest desires and our actual abilities.

Focusing inward, as a roaster, we operate under the hope that someday we may be successful enough to certify every dollar we spend to purchase green coffee is done so in the most ethical and sustainable way possible. But for many roasters, it just isn’t simple. While I have only heard guesses, it’s estimated that 92% of the world’s supply of coffee is purchased according to or by influence of the C Market Index. The historical purchasing environment is not feasible for all roasters to cut out the middlemen and go straight to the source. But that may be changing for many, and for sure, it will be for Reverie. There’s nothing like a good ol’ crisis to help waft up the winds of change.

is coffee too expensive, or is it STILL really cheap?

Source: Macrotrends

The price of the C Market Index placed the value of green coffee at $.66 in late 1973. Adjusted for inflation, the price today should be around $4.70 per pound today. Another view of the market put the price of coffee at $2.83 in 1967, adjusted to nearly $25 per pound in 2025 based on 3.9% average inflation. Either way you look at this, the results demonstrate that even with instability of the market over shorter periods of time, the relative price of coffee has not increased consistently to keep up with the cost of living or production. Further, the advancement of coffee farming production for most of the growing world has not improved to provide a bottom line in hardly any way. Farming practices have hardly changed through the generations; it is still a very laborious process (except for the massive commercial farms that is the Brazilian coffee market).

what goes into buying coffee?

Volume, cash availability and storage are just three practical factors that go into purchasing decisions. Flavor, quality, traceability, attributes (organic, Fair Trade, Bird Friendly, etc) and marketability are a few intrinsic values that can influence our purchases habits. Product availability, the timing and predictability of our future needs impact our purchase demand. Economic factors, such as the value of the US vs Brazilian Dollar, current pricing market and supply/demand, adjacent investment crops (for example, corn, soy, wheat) add to the complexities. Our customers and the coffees we think they want. The demands of the customers vary by values or desires, their business needs, their understanding and probably many more variables unique to their experience.

Coffee farmer, Don Pedro, poses for photograph in Yepocapa, Guatemala. Photo courtesy Collaborative Origins.

the silver lining

For every identified need on our end of the value chain, we cannot forget that the farmers at the complete opposite side of the equation are still people. They have families, employees, communities, their cultural heritage, and so much more. These dedicated people continually produce coffee for our consumption (more often than not at a loss). Are we okay knowing that we (consumers) may be contributing to a problem that is simply not sustainable? At Reverie, we really aren’t. And because we put people at the top of all else, we need to remember every person in the value chain, not just those closest to us.

Farmers harvesting coffee right now are likely receiving the highest payments for the coffee they produce. This is actually a great thing. Without their hard work and dedication, there will be no coffee. There is no crop insurance. There is limited, if any at all, financing to cover expenses (not that they could afford it). Coffee farmers cannot change crops at a moment’s notice, as we have seen happen here in the States. 2024 wheat harvests in Kansas were reported to have been the best crops farmers ever had in 30+ years, only be tilled under, skipping harvest because the price of wheat was below the production costs to harvest. Coffee farmers don’t have these options. But they continue, more often without guarantees and assurances, a whole lot of risk, and a long history of losses.

The Journey to better

What we have learned over the last 12 years in business is that every customer we serve, from our wholesale coffee distribution department to the retail customers in our cafes, is that everyone embodies a different set of values when considering where to spend their dollars. And nobody is the same. Sometimes their values change depending on what’s happening in the market or their lives at any moment. This presents the challenge every business faces.

An interesting observation is that customers often choose to join us on our business journey for one reason, but hey may leave us for another. They may choose Reverie based on our community minded reputation and quality product and change suddenly because of a price increase. When we begin to examine our values and the perceived values of all the stakeholders we serve, we must understand we cannot be everything to everyone.

And we cannot take the position of only serving the needs of one group of stakeholders without creating challenges for the others. I think this is how many businesses get caught up in situations that put undue pressure on the other parts of their business, leading to unexpected friction and uneasiness that is felt among the teams.

When we sat down to discuss the rapidly rising costs in the coffees we source, our team collaborated to think deeper about our values as a business and those of the people we serve. We thought about the entire value chain, from farmer to customer, including our employees and suppliers. Where are we aligned, and perhaps what may need to be evaluated. This is an ongoing process, requiring a relatively deep dive into our psyche. And the truth of the matter is that we will likely always be evaluating our values as we journey towards better because there’s always room to improve.

What we are undergoing is a truly important step towards achieving our larger company vision. And once the vision for the future is brought into the present-day analysis, we realize that people are at the center of every step of this process. And with people being the most important thing to us, our farming partners, our customers and suppliers, the most important values begin to take shape and stand out and shine.

The right way to build a business relationship with your stakeholders is to focus on outcomes as the guiding light. If we are putting people first, including our staff, we must not take risks that put their work opportunity and income source at risk. Our customers appreciate efficiency and transparency. And the farmers need commitment and consistency. And these are just a few of the dozens of values we all seek to provide for each other. Because it turns out that the farmers, customers, suppliers and staff all provide something back to Reverie. We’re completing a circle of support, further solidifying that we are all in service to each other. To our people.

As we navigate this particularly interesting time of high prices in coffee, our short-term goal is to stabilize the risks of a business financial crisis, we are choosing to address the cost issue by raising prices about halfway to what they need to be right away. But the long play here is to re-think how we purchase coffee to be able to provide stability in future product pricing and supplies in the future.

What if?

What if there was a way to provide coffee at a fair price for customers who recognize the value our business brings to their workplace or lives, but also do it in a transparent way and builds equity in farmers who will certainly be back in a financial crisis as soon as the commodity market softens?

What if customers were committed to Reverie’s purpose and our shared vision of a future free of poverty and insecurities, where fairness governs the actions of everyone, and exclusiveness is a word from the past?

What if we could do what is best for us all, and not just for ourselves?

In Closing

This post took more time to write than I expected. It seems that about every day or so there was a new challenge to navigate all the while dealing with the routine tasks of running a business with 30+ coffee professionals, over 200 commercial customers, and thousands of fans that come into the store or order online every week. It’s kind of like cleaning the house with a toddler playing nearby or trying to brush your teeth while eating Oreo cookies…. sometimes things change faster than we can take action.

But the good of this difficult situation, for us, is that we’re many steps closer to re-emerging with a much clearer picture of the needs for our stakeholders, which will give us the foresight to be prepared for future storms that are certain to come. We will have the clarity to make the best decision quickly because each member of our team will be empowered to provide the best possible outcome for their customers and teammates. And we will be able to take sizable steps towards improving our coffee program, leading to better quality products in a more ethical and sustainable way. The present may be a bit turbulent, but the future is setting up to be stable and rewarding for all that choose to join us.

And I hope you choose to stick around with us, as we (and every other local coffee business) need your support now more than ever. However, I know our customers and commitment. I know our staff and all they contribute at work every day. And I know where we are headed together, poco poco (little by little), on the journey to better, for the betterment of the people we serve. As long as we continue to value community over commodity, we are going to get through this. Thanks for coming along for the ride.

If you have any questions about the current coffee market, coffee pricing in general or in our cafes or wholesale department, please don’t hesitate to contact us. We are here for you.

Thank you-

Andrew Gough
Owner, Reverie Coffee Roasters