Understanding coffee transparency: From farm gate and FOB to the roastery

Information is available, but it is not always shared

In short, transparency means telling the entire story of the coffee openly. Not just where it comes from, but also the conditions under which it was grown, at what price, and with what impact on people and the environment. It goes beyond labels and seeks to create a deeper connection from the beginning to the end of the coffee chain.

For centuries, the coffee trade was not transparent. Because where transparency is lacking, accountability is also missing. Coffee was a classic colonial product produced through slave labor. Well into the 20th century, people were forced into coffee production. And to this day, people in certain regions produce coffee out of a lack of alternatives and are trapped in structures of dependency. But there is another way: when people work transparently and communicate openly about it.

Is there actually more demand for transparently traded coffee?

Not directly.

There is a clear upward trend for Fairtrade coffees. In Germany, sales increased by 13% in 2024, reaching a market share of 5.3%. In Switzerland, 18% of all coffee sold bears the Fairtrade label, and sales rose by 22% in 2024.

From the Fairtrade Impact Report 2024/25

However, the latest study by DKV shows: A clear majority of respondents have little interest in the specific background of coffee production. Taste, strength, and price continue to dominate general purchasing behavior. Only 42% of participants considered the topic of “sustainable production” to be important to very important, while 67% considered price to be important.

Perhaps the topic of transparency is more suited to the micro-roastery and specialty coffee market, as there is often the assumption that: small roasteries are automatically more transparent, high-quality coffee is inherently more sustainable, and stating the exact origin creates enough proximity and trust.

However, I would not confirm any of these three ideas.

The size and quality focus of a roastery play no role in how transparently someone works. Stating the exact origin is today merely a communication decision – the information is available at most roasteries. The equation "high quality = high sustainability" also does not hold up.

I have drunk qualitatively fantastic coffees from farms that use massive amounts of glyphosate and neglect worker rights. And I have drunk really bad coffee from farms that, in terms of sustainable coffee production, could be a compass for many others.

Is transparency sustainable? Untangling the concepts

It is clear by now: the concept of transparency is mixed with ideas of sustainable production, fair payment, and good partnerships. This makes the term overloaded and imprecise.

Transparency is not a concept, but an instrument to be able to achieve the stated goals in the first place. Just as a PV system is an instrument to make a light bulb glow, transparency enables us to see things. Nothing more. Companies that use transparency as a tool can go far beyond just seeing and, with a clear view, initiate changes.

A new way of seeing is required. La Capilla, Coscomatepec, Mexico

A transparent attitude creates the foundation for being able to act more sustainably in the first place. It is the basis for trust, long-term relationships, and authenticity. And that is exactly why transparency is more important today than ever: it is the foundation for good and stable relationships at every interface of the chain.

How the market forces transparency: The price in transition

Coffee is always traded because it is a cash crop. An agricultural crop planted for sale or export purposes, and thus for profit, intended to bring cash (money) through the crop (planted culture).

The way coffee is sold and bought—i.e., traded—differs based on who is negotiating with whom and on what basis they agree on a price. A large cooperative in Brazil does not look for small roasteries as buyers who only purchase bags and not containers, while a large trader does not include micro-producers in their portfolio due to the complexity of small volumes.

The C-Price is always part of a price negotiation between buyer and seller. When the price of green coffee reached one record high after another in the autumn of 2024, it became clear to the world that specialty roasteries are also affected by this C-Price. It is not that quality-oriented roasteries are immune to this; on the contrary, everyone is in the same boat. And that is a good thing.

However, the C-Price is not the true cost price for green coffee. It reflects supply and demand, which is determined by actual coffee availability, volume estimates, and speculation.

The C-Price is public, and coffee producers are often much more familiar with the smallest fluctuations than many roasteries. Because: if the price goes up, producers wait to sell. If it then goes down, they tend to sell.

A new negotiation culture through high prices

Since the higher coffee prices, many buyers have had to engage more with the C-Price. It became clear that no one acts independently of it, no matter how stable a relationship with coffee producers is. And that is why the C-Price moved so strongly to the center of negotiations, leading to a new understanding of prices.

For years, specialty roasteries in particular have said that the C-Price is far too low for a producer to make a living. Now it is high, and this poses a challenge for roasteries because they have to raise prices, which fuels concerns about losing customers.

So, in recent months, I have experienced how many buyers and sellers have discussed prices and individual cents more intensely than ever before. Roasteries (buyers) had to calculate how much they need to raise prices, while sellers (traders, producers, cooperatives) have argued how high local prices are, how little their margin represents, and how high the risk for loans is.

Information exchange in both directions. Apas visiting us in Basel

The high C-Price has thus ensured more transparency in price finding. Sellers and buyers have communicated their figures more openly than ever before. And this knowledge is now available. I am convinced that, as an industry, we will not fall back into a pre-2024 era because the strong price pressure brought with it a shift in knowledge that is now decisive. From now on, price negotiations will be more transparent.

Not nearly transparent enough: On the way to the true cost price

“Open book” was the motto for many buyers in recent months, and they shared their figures with sellers. That was unimaginable a few months ago. The buyers' worries forced them to communicate more transparently. And yet, the true cost price remains untouched. The selling price that takes into account all costs of production, including so-called externalized costs such as environmental pollution.

Home-produced organic fertilizer at Apas in Brazil

This must be the next step to obtain truly transparent pricing. This includes recording what a good income for producers actually is. A “good income” cannot be determined by roasteries or a C-Price.

In a perfect world, producers would decide what they need, but the C-Price remains the reference. However, to get a more realistic understanding of how the C-Price should be classified, tools like the Living Income Benchmark by Fairtrade are helpful. They can help obtain contextualized figures on what plausible wages could be in certain regions of the world. Furthermore, it would require knowledge of production costs, a margin, plus external costs to be able to calculate a comprehensive price for green coffee.

This is a long road, and more transparency is needed for everyone involved in the coffee chain to be able to answer these questions. Transparency is indispensable for correct pricing. Beyond that, we must ask ourselves:

who does transparency actually benefit?

For whom is transparency crucial? Different perspectives

Of course, there are limits to transparency.

When we talk about transparency in the coffee chain, we imply trade practices, paid prices, cultivation methods, perhaps employment conditions, and environmental impacts. Usually, these are topics that concern farming.

Roasteries that demand a lot of transparency from traders and producers are invited to show just as much transparency themselves. A guiding principle here could be:

The degree of transparency I demand from you, I will also give to you.

And with that, you set the limits of transparency for yourself, because there might be topics you do not like to talk about. And so, birds of a feather flock together along the chain.

What do the individual players in the chain get out of transparency?

Let's assume that the greatest possible degree of transparency is applied to a specific coffee chain, everyone feels comfortable with it, and information flows in both directions—from seed to cup and from cup to seed. Often there is an information asymmetry. But if this is broken down, there are opportunities for all parties involved.

If the information asymmetry is broken down, there are opportunities for everyone:

Producers:

• Empowerment through knowledge about the value of their product and the possibility of negotiating fair prices beyond production costs.
• Access to direct, long-term partnerships that enable stability and investment in sustainable cultivation methods.
• Improvement of working conditions and fair wages for farm workers who are often underpaid.

Green coffee importers:

• Their important role as bridge-builders between producers and roasters, managing logistics and quality assurance.
• The opportunity to strengthen trust throughout the chain through their own transparency (e.g., about their margins and services).
• Risk management through detailed knowledge of origin and production conditions.

Coffee roasters:

• Building a strong brand and credibility through authentic stories and traceable origin.
• Improving purchasing strategies through deeper insights into the producers' cost structures and optimization of the supply chain.
• Differentiation in the market and attracting conscious customers who value ethical consumption.

Customers:

• The possibility to make informed purchasing decisions that correspond to their personal values (e.g., environmental protection, social justice).
• Understanding the "true price" of coffee, which reflects the social and ecological costs along the value chain ("True Pricing").
• Appreciation of the product and the work behind every cup of coffee through detailed origin information.

Interpreting transparency correctly. The necessity of contextual knowledge

Anyone comparing two 87-point coffees, one from Kenya and one from Brazil, knows that these 87 points taste different. The coffees from Kenya and Brazil taste fundamentally different but can have high ratings for individual flavor attributes and thus reach 87 points.

Same score, different reason, we often say at tastings.

But if I were only to communicate the 87 points without the context of origin, variety, processing, etc., it tells me that the coffee is likely very good. But I still don't know what it tastes like, what purpose it might fit, and who else might like it.

Just as little are naked numbers and facts helpful in the transparency debate. An isolated FOB price, the type of harvest and processing, ownership structures in the chain—all information that says little without context. Two examples of this:

Don Roque produces high-quality coffee; the yield per hectare is under 1 ton

High price for a good coffee:

Micro-producers in the mountain region of Oaxaca, Mexico, are often completely dependent on their small harvest. This makes the coffee exclusive and more expensive. A higher price is necessary here for their survival and is determined by scarcity, not solely by the quality in the cup.

Lower price for a super coffee:

A fantastic lot from a Colombian producer with over 100 hectares of land was rated higher in quality but was identical in price to the Oaxaca coffee. Due to size, efficiency, and modern fermentation in large tanks, the coffee could be produced more cheaply.

The prices were identical but had no direct relation to sensory properties; rather, they related to economies of scale and cultivation methods. Without context, a price is just a number.

What do price specifications like FOB really say?

Initiatives like "The Pledge" invited roasteries in 2018 to share FOB prices to bring transparency to price finding. This was an important step in the right direction, creating a small stir in the specialty world. To this day, many roasteries share their purchase prices on an FOB basis.

"FOB is just the beginning”, says the vision from 2019. Only when all prices in the coffee chain become transparent does it give the possibility to calculate a Living Income Price or even the true cost price.

The FOB price (free on board) means that the exporter bears all costs until loading onto the ship. Once the coffee is on the ship, the subsequent costs pass to the import side. An exporter can, but does not have to be, the producer themselves.

Before and after this, other costs are incurred, which are reflected in different price models:

Salary for pickers

Does not appear in classic price models but is calculated into the farmgate price. There is a point of reference for this, the “living wage” approach, which differs from “living income”: While the “living wage” reflects the employment relationship, the “living income” is the reference for self-employed earnings. Therefore, the “living wage” approach serves to determine the salary for pickers, and the “living income” for farm owners.

Ex-Farmgate

The price a producer receives for the coffee directly from the farm.

FOT (Free on Truck)

The price after the coffee has been transported from the dry mill to the port, where it changes hands.

FOB (Free on Board)

The price when the coffee is loaded onto the ship. The exporter bears all costs up to this point.

DDP (Delivered Duty Paid)

The price for the coffee when it arrives at the roastery's doorstep, cleared and taxed.

The mentioned costs are so-called Incoterms: definitions that establish who bears which costs and when the goods are handed over. Furthermore, Incoterms provide information on whether the goods are further transported by the buyer or the seller.

Every coffee chain has its peculiarities and often never functions identically.

The Incoterms are based on coffee supply chains that are often similar but differ in detail. A few peculiarities can be:

• it is not a single producer, but they are part of an organization (e.g., cooperative)
• individual producers generally do not own a dry mill, i.e., the facility where the coffee is made export-ready
• the service of the dry mill can be purchased, or the dry mill buys the coffee and exports it
• cooperatives or exporters (traders) generally own dry mills
• the exporter always needs a counterpart, the importer, who then buys the coffee. These can be subsidiaries or independent companies.

Therefore, the questions:

What does the FOB price actually say?

Not much without context.

The basic idea of FOB communication is that at some point you have enough transparency to be able to calculate the living income. But neither the FOB price nor the ex-farmgate price is sufficient for this. It requires more precise calculations that deal with the individual living conditions on the ground.

In this case, without context, the FOB price is simply a number. And just because a roastery communicates this price, it cannot be assumed that it would be a good price for producers.

I see again and again that roasteries state the FOB price with the additional info that the price paid is many times higher than the C-Price (the stock market reference price). I believe this means two things:

• the will to communicate transparently what is needed, which is commendable
• the intention to drive a different form of communication, which is incomplete if not contextualized

Context is king - as long as the FOB price stands alone, it does not mean much. Only the collection of further data points provides a more complete picture of how the coffee was traded.

An FOB price of 10 USD per pound of green coffee seems high. But if the ex-farmgate price was only 5 USD, it means that the costs for processing, logistics, and export margin doubled the price—a huge markup. Just because a roastery communicates the FOB price, it is no guarantee of a fair price for producers.

Here are the FOB prices we pay for our green coffees.

Is transparent also fair?

As mentioned at the beginning, transparency is an instrument that helps us understand what is happening in a long trade chain. Where a product is loaded with monetary and ideal values, whose contribution to the chain improves the product, and what we can learn from that.

Transparency is necessary, but by itself, it is not an explanation for a deeper understanding of a supply chain. Just as transparent information without subsequent action is no guarantee of fairness.

An ethical dilemma can arise when we find ourselves in an information asymmetry; when one part of the coffee chain knows more about the market and more about the other part than vice versa. The goal should therefore be that the benefits of transparency also reach the producers so that solutions can be worked on together.

The future of transparency

Coffee companies that are required to report to third parties, e.g., a label organization like Fairtrade or Rainforest Alliance, or also shareholders, must per se work more transparently than many smaller companies, and they often show a higher degree of precision.

Whether this info is then also shared with customers and producers is another story. However, the exercise of learning more about one's own chain has long been done, especially by larger companies. Who ultimately benefits from this is unclear.

So, for change to happen at all, transparency is needed across the entire supply chain. Above all, however, it requires a self-understanding of how we position ourselves as companies, private individuals, and institutions regarding transparency. If it represents the guardrail for our actions, we think of it in both directions ("I share as much as I ask for"), and we see it as a creative means for change processes, then it is a powerful tool for a sustainable coffee chain.