Introduction and Context

Our love/hate relationship with transparency reports

We publish this report with a plethora of disclaimers, including our concern with the frequent and often redundant use of the words “transparent” and “sustainable”.  We want to avoid grand claims: we see transparency reports as a necessary reference document and tool for industry accountability. We do not treat this report as a slick piece of marketing. Rather, we hope it can be used  for exactly what it purports to be: a detailed representation of the money and labour involved in producing each kilogram of coffee we roast.  

We do not claim to have a “direct” relationship with every coffee producer we work with, nor can we perfectly verify what happens at every single step of the supply chain. We trust experienced intermediaries – exporters and importers – who help to bring coffee from equatorial hillsides to our doorstep in Neukölln, Berlin. Our aim is to engage and communicate with coffee producers as directly and frequently as possible, while relying on the sourcing and logistical expertise of our partners. Being a small company, we acknowledge our limitations, including that we cannot take on the financial risk and logistical challenges involved in truly direct trade.  We are grateful for our ethically-driven partners who enable our small roastery to source special coffees at prices that can help sustainably fund livelihoods. Thanks to Falcon, Clima, Raw Material, Azahar, Sancoffee, Algrano, Olam Specialty and all our trading partners for their willingness to share the numbers behind this report.

We share as much information as we can, because we believe that coffee buyers (like roasteries) must also honour the values of transparency and sustainability that the specialty coffee industry increasingly demands from coffee growers. We think that a more equitable coffee industry can only be achieved through mutual respect and a willingness to take some risks. Sharing numbers is a way for us to be accountable to you, the coffee drinker, and to the people we buy coffee from. We also have a responsibility to do our best to explain what all these numbers actually mean.

 

 

In a complex and confusing industry, it’s tempting to compare coffees and prices with one another, even when they come from different places with different supply chains. We encourage you to avoid these comparisons and focus on the information unique to each coffee. In our report we have provided FOB – freight on board – prices for all of the coffees we purchased, alongside farmgate prices when they were available. FOB prices should show how much of a coffee’s value was retained in its country of origin, but may not be a useful metric for determining if a producer was paid fairly for their coffee. Similarly, farmgate prices can refer to the price paid for either unprocessed cherry or parchment: two very different products that involve vastly different amounts of labour. When publishing this transparency report, a challenge we faced is that we know very little about how payments are distributed to individual members of large cooperatives, particularly in Kenya or Ethiopia. In these instances we are unable to offer a reliable farmgate price. Comparing one coffee lot with another can be a little bit like comparing apples with oranges, or more accurately, comparing cherries with beans. For this reason, we have included two additional columns in our pricing table. These columns detail whether the farmgate price was for cherry or parchment, as well as provide more information about each coffee's specific supply chain.

We also try to resist the temptation to benchmark our coffees against the C Price. The C is a metric for an essentially imaginary commodity. The C price is the price paid for “coffee futures” which are agreements to buy and sell large quantities of coffee in the future. These contracts can be traded without any intention of purchasing actual coffee beans.The C market treats  every single coffee as having the same inherent value and production cost, which starkly contrasts the realities of the specialty coffee industry. Nonetheless, it continues to impact the prices roasteries pay, particularly when buying coffee from Brazil. You can read more about the C Price and its influence on the coffee industry in our Glossary of Terms, but we will rarely refer to it in our report.

Specialty coffee in 2022

In 2022 global events impacted the coffees we could source, the price we paid for them, and the way we could roast them. Events and trends that influenced the supply and price of the coffee included, but are not limited to:


  1. Extreme weather patterns induced by climate change, including a brutal combination of droughts and frosts in Brazil, which reduced supply and drove up global prices. Increased and unseasonal rainfall (particularly in Colombia) also impacted the stability and longevity of green coffee beans, making them harder to roast.  
  2. A very strong domestic market in Colombia, which meant that many Colombian producers could demand higher prices. While we delight in strong domestic markets and higher returns for farmers, in this case, higher coffee prices did not necessarily lead to higher income for many farmers. In 2022, the cost-of-living and cost-of-production increased for many producers, mainly due to an international fertiliser shortage caused by Russia’s invasion of Ukraine. 
  3. The continuing impact of COVID-19, including ongoing shipping disruptions and difficulties, as well as a shortage of labour at the farm level.
  4. The value of the Euro declined against the US Dollar, bottoming at below parity for the first time in two decades in July. Since coffee is conventionally traded in USD, we predominantly contract the majority of our coffees in dollars. In most years this works in our favour; for instance, a coffee that costs 14 USD/kg might cost 12,50 EUR/kg when the Euro is strong. However, the weak Euro in 2022 meant we paid closer to 14 EUR/kg for this hypothetical coffee, up to 11% more than usual.

In short, green coffee became more expensive in 2022. This was part of a longer trajectory of price increases since 2020, which has continued into 2023. The four key coffees we purchase, Cafeina, Koromii, Hernan Montano, and Villamaria Decaf saw an average price increase of 19% between 2020 and 2022. On average these prices increased by a further 22% between 2022 and 2023, making a total increase of 45% over four years. Additionally, our roastery’s electricity, gas, transport and wage costs also increased in 2022, contributing to higher average production costs. 

2022 at Vote

In response to increasing costs, we increased the wholesale price on our entire coffee range by 15% in October 2022. Raising prices was not a decision that we took lightly. We strongly believe that a decent coffee should be accessible to our own local community. However, in 2022, our average weighted wholesale price fell below the average weighted cost of producing a kilogram of roasted coffee, meaning that raising prices was a necessary step to sustain our business.


 

Our reflections and goals for the future

Here are some goals that we’d like to work towards in the future:

More accurately predicting and contracting the volume of coffee that we need. 

In 2022, we ultimately had more coffee in our warehouse than we could sell at a reasonable rate. This was partly due to an excess of coffee that we had leftover from 2020 and 2021, when demand fluctuated wildly due to lockdowns. Logistics issues often meant that several coffees arrived months later than planned, meaning that we had large volumes of coffee arrive at the wrong time of the year. Sadly, we were forced to reduce the volume that we had contracted on certain coffees, including the Koromii. Cancelling and reducing reservations is something that we would like to avoid completely at all costs in future. 

In 2022, we were able to predict product demand more accurately, something which has only improved further in 2023. We hope to plan more accurately in future, so that we can honour our commitments to partners and sell coffee at the peak of its quality and freshness. One way that we can work towards this is by selling more coffee! We’re a little marketing-shy at Vote, but we do ultimately understand that buying and selling more coffee is the best way that we can offer tangible, sustained support to producers and our local employees alike.

Sharing the burden of risk arising from climate change’s impact on coffee quality. 

With climate change accelerating, we are encountering more instances where unseasonal weather during coffee processing has detrimentally impacted coffee quality. An example of this is in Timor Leste, where our partners at Raw Material inform us that the harvest and post-harvest seasons have been characterised by heavy rain or extremely hot weather.
While we always ensure that the coffees we purchase meet certain minimum quality standards, we believe that we have a responsibility to help producers who are affected by climate change. We see our role as three-fold:

  1. Providing specific and constructive feedback about coffee quality and always asking questions about quality, rather than simply rejecting samples.
  2. Consistently investing in the same producers or supply-chains year after year, and asking how we can contribute to building infrastructure – such as shade canopies in Timor Leste – that will help make coffee production more climate resilient.
  3. Further developing our roasting and brewing skills to ensure that we can extract the maximum potential out of higher-moisture or potentially less stable coffees. 

It is commonly understood that the world’s most vulnerable population, particularly in the Global South, are disproportionately impacted by the effects of climate change. In many ways, specialty coffee is a luxury good that is shipped across the entire world for us to enjoy. Situated in industrialised Germany, we need to do our small bit to mitigate the imminent financial and environmental precarity faced by approximately 12.5 million small-scale coffee farms worldwide. 

THANK YOU.

It’s hard to express sincerity in a written report, but we are genuinely grateful to all of our partners. We are so thankful that when we barrage our importing partners with questions about the coffee supply chain, they do not provide us with cursory answers, but share their reflections and deep empirical knowledge. Thank you to the baristas, home-enthusiasts and cafe-owners who vote to use our coffee every day. We might overwhelm you with excessive amounts of information (sorry) but we’re not ones for hollow marketing slogans or empty platitudes. In an industry that can seem opaque – even to us – we hope and aim to be transparent: what you see is what you get. In turn, we rely on your honest feedback to improve. Please share it with us liberally.

Every day, we get to work with caffeinated seeds that have been grown inside the nutrient-rich home of a cherry, then fermented, dried, shipped halfway across the world, cupped, roasted, ground, brewed and finally poured into your cup. We’re glad and lucky that we get to be part of this complicated and sometimes, seemingly miraculous transformation from green seed to brown bean. We also enjoy keeping you up to date with roastery life and the changes that we witness in the coffee industry - it is one of the most enriching parts of our job. If you have any questions, please never hesitate to get in touch.

Recommended Reading


State of the Smallholder Coffee Farmer:   An Initiative Towards a More Equitable and Democratic Information Landscape

Specialty Coffee Assoc, The Information Landscape: what we know (and what we don't) about smallholder coffee producers

Azahar, A Sustainable Coffee Buyer's Guide

2022 Specialty Coffee Transaction Guide

Kim Elena Ionescu | Pathways between Farm and Consumer: Mapping Specialty Coffee 

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