The Evolution of Transparency Reporting
The specialty coffee industry has undergone a dramatic shift toward pricing transparency over the past decade, driven by growing consumer awareness and ethical concerns about farmer compensation. The 2024 Specialty Coffee Transaction Guide, compiled by researchers at Emory University’s Goizueta Business School, draws upon data supplied by 123 companies from all over the world, summarizing more than 100,000 contracts representing 2 billion pounds of green specialty coffee. This represents a monumental data collection effort that provides actionable pricing benchmarks for an industry historically reliant on volatile commodity pricing.
As a company that strives to source coffee sustainability and have a positive impact on the world, we see transparency as an indispensable tool and driver for our goals. This sentiment from Counter Culture Coffee reflects a broader industry recognition that pricing transparency serves multiple stakeholders simultaneously. The data reveals pricing trends that directly challenge traditional commodity-based pricing models. Over the most recent three harvest years, the median FOB price was $3.48, a $0.73 per pound increase over the median price in the previous three years. Across the adjacent three-year periods, the median FOB price for “regular” specialty coffees (scored at 80-83.9 points) rose $0.70 per pound, from $2.23 to $2.93.
The Transparency Pledge Movement
A coalition of progressive coffee companies has formalized their commitment to transparency through “The Pledge,” establishing standardized reporting requirements that go beyond marketing claims. Seventeen companies and counting — predominantly roasters plus one importer (United States-based Coop Coffees) — have signed “The Pledge: A Common Code for Transparency in Coffee Buying.” In doing so, each company has committed to creating transparent purchasing reports that are publicly and easily accessible, and include the following information: name of the producer; FOB price paid; the coffee quality score and/or grade; volume of coffee purchased; length of the relationship between the buyer and the producer; and the percentage of transparent coffees in relation to total volume for a given year.
Signatory individuals and companies must commit to a goal of increasing transparency reporting until all coffees bought by an individual company are reported with all information stated in this Commitment. Ensure a sustainable supply of coffee by working towards a living income for producers so they will continue to invest in the future of their businesses. The movement has gained international traction with participating companies from North America, Europe, and Australia. Notable signatories include established roasters like Counter Culture, Coffee Collective, Tim Wendelboe, and Seattle Coffee Works, alongside importers and smaller specialty roasters.
FOB vs. Farmgate: The Critical Distinction
The industry’s reliance on Free On Board (FOB) pricing as the transparency standard reveals both progress and limitations. Traditionally, as little as 60% of the FOB price can arrive in the farmer’s hands. The remaining 40% will be for the costs of in-country transportation, warehousing, wet milling (if applicable), dry milling, and other in-country non-farm expenses. This significant discrepancy has prompted calls for farmgate pricing transparency, which directly reflects what farmers receive for their coffee.
This “farmgate” price, as it’s known, is one of the least transparent details in coffee, and specialty coffee is no exception. The challenge stems from coffee’s complex supply chain where coffee changes hands multiple times, tracing it back to the farm can be a challenge. Those involved in the supply chain, including exporters, importers, millers, and cooperatives, will have to provide pricing information.
A coffee guide published by the International Trade Centre shows producing regions have different transmission ratios of value from FOB to farmgate. For example, Brazil and Vietnam have a ratio of up to 90%, meaning producers receive 90% of FOB price, while Ethiopia has a rate lower than 50%.
Tools Reshaping Price Discovery
The Specialty Coffee Transaction Guide has emerged as the industry’s most comprehensive pricing resource, offering an alternative to commodity market benchmarks. “Producers and exporters we have spoken with generally use it as an alternative reference to the C price to begin conversations about pricing based on the specific kind of coffee they have, thinking about cup score, lot size, and origin,” 2024 SCTG research associate and Cheap Coffee Author Karl Wienhold told DCN. “Importers and roasters have told us they use it mainly to benchmark and give context to customers and other stakeholders when they share price information, recognizing a specific reference as a more relevant comparison than the C price.”
The report also drills down even further by cup quality, dividing all coffees scored 80 and above into six different categories. A similar approach is taken to lot size as well as origin. This granular approach allows market participants to understand pricing variations based on quality metrics rather than relying solely on volatile commodity prices. Technology platforms like iFinca are attempting to bridge the farmgate transparency gap through blockchain verification, though adoption remains limited.
Market Impact and Implementation Challenges
The transparency movement faces significant practical challenges despite growing adoption. For roasters, achieving transparency beyond the exporter’s price into the internal markets of coffee-producing countries can be incredibly challenging to do, and to understand. For producers, it can be difficult to explain and sensitive for everyone involved. Exchange rates, local economic conditions, and varying supply chain configurations all complicate efforts to establish consistent transparency standards.
Market data shows that transparency initiatives are gaining traction amid unprecedented commodity price volatility. Coffee’s commodity price (C Market) began 2024 at $1.94 per pound and grew steadily and precipitously to previously unknown heights and unknown outcomes ending the year at a $3.71. This volatility underscores why “We live in the belief that pricing for green specialty coffees could be as unrelated to the New York C price as are the associated retail prices,” SCTG Founder Peter Roberts told Daily Coffee News. “Every year, the Specialty Coffee Transaction Guide offers buyers and sellers an opportunity to think about, negotiate, and set prices for green specialty coffees using more relevant price benchmarks.”
Future Implications for Industry Development
The transparency movement represents more than ethical marketing—it’s reshaping fundamental business practices and pricing mechanisms across the supply chain. “I really hope that The Pledge can inspire more roasters to not only be transparent about their green coffee prices but also that farmers can use the information provided in the various transparency reports to have better leverage when negotiating the price of their coffee. To truly build sustainable relationships along the coffee value chain, we need transparency.” This farmer empowerment aspect may prove to be the movement’s most significant long-term impact.
As more companies adopt transparency reporting and data collection improves, the industry is developing pricing infrastructure that could fundamentally alter coffee trading dynamics. Transparent reporting enables actors along the supply chain to make informed choices. This will help the industry to raise prices paid to farmers and provide living incomes in coffee producing countries. However, success will depend on widespread adoption, standardized reporting methods, and continued investment in systems that capture accurate farmgate pricing data across diverse producing regions.