Should cafes charge more to offer fair trade coffe

Mr_Nang

Been reading a little on some university forums lately and found an interesting thread.

Should cafes charge more to offer fair trade coffee?

tommy

tough call, if the increase were relatively substantial ie $0.50 per coffee, then i would imagine many customers would go to the competition. in many ways advertising "fair trade" coffee is a selling point for some i guess...

sketchy

Hi I don't think the extra cost of fair trade coffee needs to be pasted on to the customer as it is only about 0.02c per cup dearer. LE

askthecoffeeguy

As the owner of a cafe which sells FairTrade coffee in a university environment, I would have to say that the decision is entirely a personal one, based upon mitigating factors, such as coffee sales as a percentage of turnover, cost of sales, and comparative value for money. If, as I do, you endeavour to source quality ingredients, regardless of cost, then their may may other factors that influence your cost structure. However, even though FairTrade coffee, in my experience at least, is between 20 and 30 per cent more expensive to buy than other quality, commercially available brands (although, it can be 40 to 50 per cent more expensive than 'entry level' commercial coffee), I have chosen to keep my introductory prices purposely low, at $2.80 for a regular (standard latte glass or 8oz takeaway), when the recommended retail for same is $3.20 (in Melbourne - although more in Sydney) - and this price is also less expensive than that of my nearest competitor, who purchases a commercial brand, for a lot less than what I pay. The thing to consider, is not just how much that coffee costs you for a single shot of extraction, but what happens when customers order double shots, and, in the case of 12oz and 16oz coffees, triple, or even quadruple shots. i have also been known to add a six shot restricted pour to a large long black, but do I charge the customer extra for this?  No, I do not. Nor do I charge extra for organic soy (as some places do) - but I do charge extra for Bonsoy, which, I guess, is fair enough, given how much it costs. I wonder, in fact, how many cafe owners sit down, before they open their business, and work out how many coffees they have to sell to just break even, and what average per head spend per customer is required, in order to run as a viable entity. My guess is that many would be surprised by how much it actually costs to run and maintain a cafe on a daily basis. The other major concern when it comes to costings is quality control, and how to maintain it. It's fine and dandy charging top dollar for a coffee, but if the consistency is not there, that customer is definitely not coming back. All in all each venue has to be taken on it's individual merits, and the issue of whether the coffee is FairTrade or not, is in my opinion at least, only one factor in a whole host of considerations. ACG

nzroaster

To those who don't know already, I think that the Fair Trade Brand is corrupt and a marketing tool. I'm not saying that it is a bad idea, just that its not the only socially responsible system out there. I do, however, buy fair trade & rainforest alliance greens. Once again I feel it is a choice. Just to let everyone know, fair trade coffee is no more expensive to buy than other co-op grown beans of high quality so maybe you should chat to your roaster if they are charging you more. Came across this in support of my opinion: http://www.ft.com/cms/s/d191adbc-3f4d-11db-a37c-0000779e2340.html

FreshCoffee2

No. Regardz, FC.

askthecoffeeguy

I would imagine that the issues raised in the above article are of concern to the entire industry, and not just to the FT movement. Pity they didn't interview some of the farmers I have spoken to, who have seen their entire community benefit from the FT initiative. Its a shame really that we seem to be more concerned with bringing down inequalities within what is admittedly a flawed system, rather than addressing the positive impact that these initiative have upon many communities. Also, I don't see many of the knockers offering a solution to these problems. Unlike a mate of mine, who saw the room for improvement for FairTrade production in Papa New Guinea, and decided to move there to work with the local community at a grass roots level. I guess that's what you call putting your money where your mouth is, instead of indiscriminately slagging off at a situation you are not prepared to personally address. ACG

nzroaster

I am not trying to bring down Fair Trade. The issue that I have with it is that it is a brand name, and from an consumer point of view it is used to sell product. It is not the only "fairly traded" brand around, but because of the name it is being pushed as the only one. That is where I have the issue. As a roaster I buy beans from Fair Trade, Rainforest Alliance, private co-ops. All of these systems work to get more money to the farmers, all do. All have flaws/hidden agendas/positive outcomes. I'm not saying that the system does not work, just that it the only system that is marketed this way.

askthecoffeeguy

I agree that there are inherent faults in any system, and I can understand your concerns as a roaster, that unless you are registered as FT in your roasting process, then their is little flow-on financial benefit. I have heard also that FT spend an inordinate amount on advertising and marketing, to get their message across. Yet perhaps this is necessary to counter the marketing appeal of the big coffee houses, who have the financial clout to swamp the market with their saturation advertising. All I can say, from my own experience as an end-used, is that the benefit to my business (not to mention the impact this has on the community where my beans are sourced from) - has been tremendous. By responding to customer demand (to go FT in the first place), I have created a niche for myself in a competitive marketplace, one which (I would hope), draws return trade to my business, and which has contributed to the company's ongoing success. ACG

Mr_Nang

I see no problem in charging more provided the additional revenue generated above the addditional expense (if any) is directed back toward supporting appropriate sustainability / community support programs. This would show that the action is motivated by a credible intent.

Lukey

I see no problem in chargin more provided the additional revenue generated above the addditional expense (if any) is directed back toward supporting appropriate sustainability / community support programs. This would show that the action is motivated by a credible intent.

well put nathan, if i went into a place where they showed a mission statement along those lines(and of course the coffee was good) it would make me feel that i'm contibuting( as little as it may be) to benifit the growers. luke

askthecoffeeguy

At the end of the day, market forces determine what you can charge for your coffee, and customers decide with their feet. As surprising as this may sound (given that I have been known to occasionally get on the bandwagon), I do not actively promote the fact that the coffee I serve is FairTrade - what I do promote is that it is quality coffee, made well with consistency.   And if my customers want to know more about the process, I am happy to inform them, and have promotional material to this effect. It is fair to say though, that my coffee sales have effectively doubled since I introduced FairTrade coffee, partially because of the coffee change, but also in a large part due to our commitment to quality control and extensive staff training. Although, I have to ask the question:  why the issue with pricing with regard to FT coffee?  Surely the same concern applies to non FT as well? After all, two cafes serving exactly the same product can and do vary markedly in terms of their overheads, and cost structure, and this is often reflected in the price of the end product. I believe that this is a concern for the industry as a whole, and not just FT. From personal experience, at my joint we have gradually increased the price of our coffee over time, to reflect increased overheads, including more and better trained (including better remunerated) staff, which also has a direct impact on the price you pay for a cuppa. As for myself, I would rather pay more for a well made and great tasting coffee, regardless of whether it is FT or not, if it is made well by staff who care about the job that they do, than less for an inferior product. ACG