SEATTLE COFFEE WORKS 2020 AUTHENTICITY REPORT

Statement of Authenticity

At Seattle Coffee Works, we recognize that producing premium coffee requires talented and passionate people along the entire supply chain. In order to sustain thriving relationships with coffee farmers and maintain a consistent team of coffee professionals in Seattle, we do our best to ensure that everyone’s wage reflects the quality of the final product, your coffee.

Full price transparency holds us accountable, tracks our progress, and serves as a valuable metric for farmers, consumers, and fellow members of the coffee community. Farmers can use price transparency to incentivize improvements in coffee quality and the quality of life for their employees. Consumers can use this report to see how their purchasing power impacts the livelihoods of coffee workers worldwide.

We appreciate our peers in the coffee community who operate transparently, and we hope to contribute to the effort of increasing equity in the coffee industry by revealing how we manage our business.

This report shows how much we pay for each pound of green coffee and what percent of that coffee is purchased directly from farmers. It also details how we provide living wages to our coffee professionals in Seattle.

Seattle Coffee Works Green Coffee Purchasing Season: 2019

Country / Farm

Trade Type

Since

SCA Score

Total Pounds

Farmer’s Net Proceed

Farmgate to FOB

FINAL FOB to Farmer

Estimated FOB to Landed USA

USA Landed

Central America

Guatemala Rosma Nativa Washed 2019

Direct

2015

89.0

9,888

3.20

0.65

3.85

0.16

4.01

Guatemala Rosma Nativa Natural 2019

Direct

2015

89.0

761

4.62

0.88

5.50

0.16

5.66

Guatemala La Esperanza Nativa Washed 2019

Direct

2013

89.0

10,648

3.20

0.65

3.85

0.16

4.01

Guatemala La Esperanza Nativa Natural 2019

Direct

2013

89.0

761

4.62

0.88

5.50

0.16

5.66

Guatemala La Esperanza Pacamara Washed 2019

Direct

2013

91.0

761

4.37

0.88

5.25

0.16

5.41

Honduras Emilia Lempira/Catuai Washed 2019

Direct

2018

n/a

761

2.89

0.61

3.50

0.35

3.85

Honduras La Pila Catuai/Parainema Washed 2019

Direct

2018

88.5

761

2.89

0.61

3.50

0.35

3.85

Nicaragua Finca Santa Teresa Java Washed 2019

Direct

2019

87.5

761

2.94

0.56

3.50

0.60

4.10

El Salvador Divisadero Caturra Natural 2019

Direct

2016

90.0

761

3.33

0.52

3.85

0.33

4.18

South America

Colombia Villa Laura Washed 2019

Direct

2016

89.0

5,402

3.11

0.39

3.50

0.25

3.75

Colombia Finca Santa Isabel 2019

Direct

2017

88.0

3,859

3.11

0.39

3.50

0.25

3.75

Ecuador Finca El Manantial 2019

Direct

2018

88.25

2,090

2.94

0.56

3.50

0.25

3.75

East Africa

Kenya Rukira AA 2019

Relationship

2015

93.0

661

n/a

n/a

5.30

0.50

5.80

Kenya Kiriga AB 2019

Direct

2015

88.0

3,968

4.25

0.63

4.25

0.50

4.75

Kenya Githiru AA 2019

Relationship

2019

92.0

661

n/a

n/a

5.30

0.50

5.80

Kenya Thageini PB 2019

Relationship

2018

91.5

661

n/a

n/a

3.90

0.50

4.40

Ethiopia Yirgacheffe Dumerso Natural 2019

Relationship

2015

91.0

6,614

3.60

0.50

4.10

0.31

4.41

Ethiopia Limmu Wabe Sombo Natural 2019

Direct

2018

91.25

5,291

3.00

0.50

3.50

0.31

3.81

Ethiopia Yirgacheffee Geremwe Addisu Natural 2019

Relationship

2019

92.5

1,323

3.60

0.50

4.10

0.31

4.41

Ethiopia Yirgacheffe Dumerso Washed 2019

Relationship

2015

90.75

1,323

3.60

0.50

4.10

0.31

4.41

Ethiopia Guji Bochesi Washed  2019

Relationship

2018

89.75

1,323

3.60

0.50

4.10

0.31

4.41

Asia Pacific

Bali Kintamani 2019

Conventional

2013

89.5

1,323

n/a

n/a

n/a

n/a

3.70

Decaf

Our Best Decaf (two lots)

Conventional

n/a

88.0

2,646

n/a

n/a

n/a

n/a

3.69

TOTALS, AVERAGES & PERCENTAGES

Total in pounds

% of total pounds

Total in $ (FOB)

Weighted Average $/lb (FOB)

DIRECT

46,471

74%

$177,452

3.82

RELATIONSHIP

12,567

20%

$52,978

4.22

Total Direct and Relationship

59,038

94%

$230,430

3.90

CONVENTIONAL

3,968

6%

$14,657

3.69

TOTAL ALL

63,006

$245,087

3.89


For the 2019-20 growing season, we averaged $3.90 per pound Free On Board (FOB) for the 94%$ of the coffee we purchased directly from farmers and cooperatives. The minimum direct-trade price we paid was $3.50 FOB.

For the two coffees we buy conventionally, Bali Kintamani and Swiss-water Decaf, we know only the price we pay for “Free on Truck” (FOT), i.e. a price that includes all import costs into the United States. We conservatively estimate that the typical differential between FOB and FOT is at least $0.25 per pound. It is likely higher, making the difference between what we pay for our direct-trade lots and for our conventional lots greater.

Price Benchmarks

Determining an industry standard to benchmark what we pay farmers for their coffee can be challenging. Below are commonly referenced prices for conventionally purchased and direct/relationship traded coffees:

1) At the New York Mercantile Exchange, Grade 3 coffee futures for 2019-20 sales ranged from $0.89 to $1.46 per pound with an average (last price) of $1.05 per pound. (Coffee Futures pricing from mid-2019 through mid-2020).1

2) The 2019 minimum Fairtrade price of coffee, which adds a premium to the prices listed at the New York Mercantile Exchange, fluctuated between $1.19 and $1.76 per pound.2

3) For the 2018-19 sourcing season, the median price for high-end specialty coffee was at $2.80 per pound as indexed in the Specialty Coffee Transaction Guide.3

Seattle Coffee Works is a small, independent company with no outside investors. Our business structure allows team members to grow into new roles and responsibilities within the company.

In order to provide outstanding and enjoyable experiences for coffee drinkers, we hire talented individuals with diverse skill sets, and support personal and professional development.

True Living Wage

As team members grow and develop, so do their wages. As of May 2017, we eliminated the practice of tipping, allowing full-time senior employees to earn consistent wages up to $24.50 dollars an hour, while our starting wage is $17.00 per hour. 

In their first year, new members of our team can expect at least $44,000 per year.

Benefits Beyond Wages

Seattle Coffee Works offer benefits to our team members including:

Commitment to Coffee Education – Employment at Seattle Coffee Works promises ongoing opportunities for team members to develop coffee mastery. Becoming a certified barista with Seattle Coffee Works requires participation in a 6-9 month training program covering topics from hospitality to espresso to Slow Bar preparation.

Annual Trip to Coffee Farms – Since 2014, we have sent 7 groups of team members (more than 30 team members in all) for a week-long trip to Guatemala to visit Direct Trade partner farms, a dry mill and coffee exporter, and other coffee trading partners in Guatemala. Participation in the trip is considered paid work, and the company covers all transportation, lodging, and per diem costs.

Frequently Asked Questions

Why does Direct Trade Matter?

Direct Trade has provided us the opportunity to establish meaningful relationships with people across the globe and is a business model that has benefited everyone involved. We are not a charity. We have high standards, and the premiums we pay our farmers are well deserved, commensurate with the quality of their product.

As quality improves, so do prices, and through a mutual collaboration, both will continue to grow.

We believe that when incentives are aligned and businesses are well managed, it is possible for farmers, pickers, roasters, and baristas to live well – while providing customers an affordable price for an excellent drink. We have seen that it is possible to pay farmers nearly $4 per pound and still offer a cup of coffee for under $3.

What is the difference between Direct & Relationship Trade?

Ideally, when purchasing green coffee, we visit each farm at least once per year, arriving at a fair price in a personal discussion with each farmer. This is what we define as ‘Direct Trade’. We use the term ‘Relationship Trade’ when we only have the means to visit a farm every couple of years and we rely on email to negotiate a price. In some regions, farmers typically have small plots of a few acres or less, so they form cooperatives that are collectively responsible for processing coffee and negotiating a price. When we visit cooperatives and negotiate prices with their representatives, we consider this to be ‘Relationship Trade’ because we do not have the opportunity to meet each of the farmers.

What Determines Each Coffee’s Price?

Price depends on quality and quantity. To determine quality, we adhere to a coffee grading system set by the Specialty Coffee Association (SCA), an international nonprofit that sets and maintains quality standards for the specialty coffee industry. Prior to and after purchase, our green coffee buying team holds cuppings scoring each coffee on a scale up to 100. These scores determine the baseline price of how much we pay per pound of green coffee.

88.0 points: $3.50/lb. FOB

89.0 points: $3.85/lb. FOB (or a $0.35 premium)

90.0 points: $4.10/lb. FOB (or a $0.60 premium)

For coffees we have previously purchased that consistently exceed a score of 90+ points, we typically pay higher prices, for example our Kenyan coffees generally start at $4.00 or higher.

What is Second Pay?

Occasionally, and most often when purchasing from new lots, our initial coffee score prior to purchase may be slightly different from the score after purchase. In the event our expectations are exceeded, and the coffee scores higher, we pay our farmers a second time (or, Second Pay). If a coffee scores lower after purchase, that is our mistake. The price remains what was previously negotiated. By following this pricing system, and engaging in direct trade payments to the farmers, we far exceed the prices paid by most other roasters, while providing incentive to producers to continue improving their coffee.

What Does FOB Stand For?

Free On Board (FOB) is the designation for the price of coffee prior to export from its country of origin. Although FOB does not account for the small margin taken by exporters and dry milling at origin, this is fairly good measure of how much money reaches the coffee farmer. It provides a standard baseline for price comparison across direct, fair, and conventional methods. Comparing FOB prices, we often pay farmers three, four, or even more times the amount of money that they would have received if they sold their coffee through the conventional coffee auction.

How does Seattle Coffee Works collaborate with farmers?

Our green coffee buyer, Oscar Garcia, is both a Q-Grader and Q-Processing Professional certified. While visiting farms he can roast and taste coffee on-site, consulting farmers on how to adjust processing methods to improve quality. Oscar also introduces new methods of washing and drying coffee that may be better suited to climate conditions or can add diversity to the flavor profiles of each farm’s coffee.

Who provides your import services?

For most of our coffee, together with our farm partners, we’ve taken complete control of the entire supply chain. That means, our farmer partners prepare the coffee for export, using pay-for-service third-party vendors in the country of origin, and we import the coffee directly to the port of Seattle, also using third-party logistics services, most importantly a directly booked shipping line and an import broker to help us with the intensive paper work of importation.
On occasion, for small lots, we continue to rely on our US-based importer friends, including: Royal Coffee (Oakland, CA), Olam Specialty Coffee (Healdsburg, CA), LIST + BEISLER (New York), Tusa Specialty Coffee (Baltimore, MD), InterAmerican (Houston, TX), Sustainable Harvest (Portland, OR), on a fee-for-service basis.

Has green coffee purchasing improved over the years?

While maintaining an average FOB of $4.00 per pound, the percentage of coffee we purchase through Direct and Relationship trade has grown from 88% in 2018 to 94% in 2020.

Thank You

As coffee professionals at Seattle Coffee Works, our vision is to make coffee better in terms of quality, equity, sustainability, and transparency. This Authenticity Report represents a step toward increasing transparency and equity in the specialty coffee industry.

Special thanks to our partners and friends at:

  • Wabe Sombo Farm, Ethiopia
  • Finca La Esperanza, Guatemala
  • Finca Rosma, Guatemala

…for your contributions to this report.

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Contributors: Oscar Garcia and Sebastian Simsch, Green Coffee Buyers; Pipo Bui, Editor
We strive to make this report as accurate as possible. We apologize for any omissions or errors. For more information, or to learn about how your business can participate in authenticity reporting, please contact us at service@seattlecoffeeworks.com
Symbol drawings credit: Ship - BomSymbols/NounProject; Globe - David/NounProject; Travel Symbol - Tom Walsh/NounProject; Seattle tower - Joni Trythall/NounProject; Education - Dinosoft Labs/NounProject

All photos are by Oscar Garcia or Pipo Bui, with the active consent of the people depicted.
© Seattle Coffee Works • August 2020 • 2020 Authenticity Report