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

Information exists, but it's not always shared

In short, transparency means openly telling the entire story of the coffee. Not just where it comes from, but also under what conditions 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.

Coffee trade was not transparent for centuries. Because where transparency is lacking, accountability is also lacking. 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 due to lack of alternatives and are trapped in dependent structures. But it can be different: when work is done transparently and communicated about openly.

Is There Greater Demand for Transparently Traded Coffee?

Not directly.

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

From the Fairtrade Impact Report 2024/25

However, the latest study by the DKV shows: A clear majority of respondents are barely interested in the precise details of coffee production. Taste, strength, and price continue to dominate general purchasing behavior. Only 42% of participants considered "sustainable production" important to very important, while 67% considered price important.

Perhaps transparency is more of a topic for the specialty coffee market, as there's often the assumption that: small roasteries are automatically more transparent, quality coffee is inherently more sustainable, and mentioning the exact origin creates enough proximity and trust.

However, I wouldn't confirm any of these three ideas.

The size and quality orientation of a roastery play no role in how transparently someone operates. Stating the exact origin is merely a communication decision today – most roasteries have the information available. The equation "high quality = high sustainability" also doesn't add up.

I've tasted qualitatively fantastic coffees from farms that massively use glyphosate and neglect workers' rights. And I've tasted really poor coffee from farms that could serve as a compass for many others in terms of sustainable coffee production.

Is Transparency Sustainable? Untangling the Terms

It's already clear by this point that the concept of transparency is conflated with ideas of sustainable production, fair payment, and good partnerships. This overloads the term and makes it imprecise.

Transparency is not a concept but a tool to achieve the mentioned goals at all. Just as a solar panel is a tool 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 seeing and initiate change with clear vision.

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

A transparent approach creates the foundation to act more sustainably at all. It's the basis for trust, long-term relationships, and authenticity. And that's exactly why transparency is more important today than ever: it's the foundation for good and stable relationships at every point in the chain.

How the Market Enforces Transparency: The Changing Price

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

The way coffee is sold and bought – traded – differs in who negotiates with whom and on what basis prices are determined. A large cooperative in Brazil doesn't seek small roasteries as buyers who only buy bags rather than containers, while a major trader won't include small-scale producers in their portfolio for reasons of granularity.

The C-Price is always part of a price negotiation between buyer and seller. When raw coffee prices reached all-time highs in fall 2024, the world became clear that specialty roasteries are also affected by this C-Price. It's not that quality-oriented roasteries are immune to it; on the contrary: everyone is in the same boat. And that's good.

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

The C-Price is public, and coffee producers often know its smallest fluctuations much better than many roasteries. Because: when the price goes up, producers wait to sell. When it drops again, they tend to sell.

A New Negotiation Culture Through High Prices

Especially since higher coffee prices, many buyers had to engage even more with the C-Price. It became clear that no one acts independently of it, regardless of how stable a relationship with coffee producers is. And that's why the C-Price moved so strongly to the center of negotiations that a new understanding of prices emerged.

For years, especially specialty roasteries have said that the C-Price is far too low for producers to live from. Now it's high, and that presents roasteries with a challenge because they need to raise prices, which fuels concerns about losing customers.

So in recent months, I witnessed how many buyers and sellers discussed prices and individual cents more intensely than ever before. Roasteries (buyers) had to calculate how much they need to go up in price, sellers (traders, producers, cooperatives) argued about how high local prices are, how small their margin is, and how high the risk for loans is.

Information exchange in both directions. Apas visiting us in Basel

The high C-Price has brought more transparency to price-setting. Sellers and buyers have communicated their figures more openly than ever before. And this knowledge now exists. I'm convinced that as an industry we won't fall back into a pre-2024 era because the strong price pressure brought a knowledge shift that is now defining. Price negotiations will become more transparent from here on.

Still Far From Transparent Enough: Moving Toward True-Cost Pricing

"Open book" was the motto for many buyers in recent months, and they shared their figures with sellers. That was unthinkable just months ago. The concerns of buyers forced them to communicate more transparently. And yet the true-cost price remains untouched. The selling price that accounts for all production costs, including so-called externalized costs like environmental damage.

Homemade organic fertilizer at Apas in Brazil

That must be the next step to achieve truly transparent pricing. This includes determining what constitutes a good income for producers. 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 fits in, tools like the Living Income Benchmark from Fairtrade help. It can help obtain contextualized figures about what reasonable wages in certain parts of the world could be. Furthermore, there would need to be knowledge of production costs, a margin, plus external costs to calculate a comprehensive price for raw coffee.

This is a long road and requires more transparency for all participants in the coffee chain to answer these questions. Transparency is indispensable for proper price formation. Beyond that, we need to ask ourselves:

who actually benefits from transparency?

For Whom Is Transparency Decisive? Different Perspectives

Of course, there are limits to transparency.

When we talk about transparency in the coffee chain, we imply trading practices, prices paid, cultivation methods, perhaps working conditions and environmental impacts. Most of these are topics concerning cultivation.

Roasteries that demand much transparency from traders and producers are invited to show the same amount of transparency themselves. As a principle, this could apply:

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

And with that, you set your own limits on transparency, because there might be topics you don't like to discuss. So like finds like along the chain.

What Do Individual Actors in the Chain Get Out of Transparency?

Let's assume that the greatest possible degree of transparency is applied to a particular coffee chain, everyone is comfortable with it, and information exchange goes both ways – from seed to cup and from cup to seed. Information asymmetry often prevails. But when broken, there are opportunities for all participants.

When information asymmetry is broken, there are opportunities for everyone:

Producers:

• Empowerment through knowledge about the value of their product and the ability to negotiate fair prices beyond production costs.
• Access to direct, long-term partnerships that enable stability and investments 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 the origin and production conditions.

Coffee Roasters:

• Building a strong brand and credibility through authentic stories and traceable origins.
• Improving purchasing strategies through deeper insights into producers' cost structures and optimizing the supply chain.
• Differentiation in competition and attracting a conscious customer base that values ethical consumption.

Customers:

• The ability to make informed purchasing decisions that align with their personal values (e.g., environmental protection, social justice).
• Understanding the "true price" of coffee, which reflects the social and ecological costs throughout 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 Context Knowledge

If you compare two 87-point coffees, one from Kenya and one from Brazil, you know that these 87 points taste different. 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 only communicated the 87 points without the context of origin, variety, processing, etc., that tells me the coffee is probably very good. I still don't know how it tastes, what purpose it suits, and who else might enjoy it.

Likewise, bare numbers and facts are unhelpful in the transparency debate. An FOB price viewed in isolation, the type of harvest and processing, ownership structures along the chain – all information that says little without context. Two examples of this:

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

High Price for Good Coffee:

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

Low Price for Excellent Coffee:

A fantastic lot from a Colombian producer with over 100 hectares of land was rated qualitatively higher but was priced identically to the Oaxaca coffee. Through 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 qualities; instead, 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 formation. That was an important step in the right direction, causing a small ripple through the specialty coffee world. To this day, many roasteries share their purchasing prices on an FOB basis.

"FOB is just the beginning," states the 2019 vision. Only when all prices along the coffee chain become transparent does it become possible to calculate a Living Income Price or even a true-cost price.

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

Before and after, additional costs occur, which are represented in different pricing models:

Picker Wages

Doesn't appear in classical pricing models but is factored into the farmgate price. There's a guideline for this, the "Living Wage" approach, which differs from "Living Income": While "living wage" represents employment relationships, "living income" is the reference for self-employment. The "living wage" approach is used to determine picker wages; for farm owners, it's "living income".

Ex-Farmgate

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

FOT (Free on Truck)

The price after coffee is transported from the dry mill to the port and ownership changes hands.

FOB (Free on Board)

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

DDP (Delivered Duty Paid)

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

The mentioned costs are so-called Incoterms: definitions that determine who bears which costs and when goods are transferred. Additionally, Incoterms provide information about whether the goods are forwarded by the buyer or seller.

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

Coffee supply chains are based on Incoterms that often resemble each other but differ in detail. Some peculiarities can be:

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

Hence the questions:

So what does the FOB price actually say?

Without context, not much.

The basic idea of FOB communication is that eventually you have enough transparency to calculate Living Income. But neither the FOB price nor the ex-farmgate price suffices for that. It requires more precise calculations that engage with individual life circumstances on the ground.

In that case, the FOB price without context is simply a number. And just because a roastery communicates this price doesn't mean it can be assumed to be a fair price for producers.

I repeatedly see roasteries stating the FOB price with additional info that the paid price is x times higher than the C-Price (the exchange reference price). I believe this means two things:

• the will to communicate transparently, which is necessary and commendable
• the intention to communicate differently, but which is incomplete without context

Context is king – as long as the FOB price stands alone, it doesn't mean much. Only gathering additional data points provides a more complete picture of how the coffee was traded.

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

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

Is Transparent Also Fair?

As mentioned at the outset, transparency is a tool that helps us understand what happens in a long trading chain. Where a product is loaded with monetary and ideological values, whose contribution along the chain improves the product, and what we can further learn from it.

Transparency is necessary, but standalone, it's not an explanation for deeper understanding of a supply chain. Likewise, transparent information without subsequent action is no guarantee of fairness.

An ethical dilemma can arise when we're 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 reach producers too, so solutions can be worked on together.

The Future of Transparency

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

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

For change to happen at all, transparency across entire supply chains is needed. First and foremost, it requires an understanding of how we, as companies, individuals, and institutions, approach transparency. If it represents our guiding principle, we think of it bidirectionally ("I share as much as I ask"), and we see it as a creative means for change processes, then it's a powerful tool for a future-proof coffee chain.