How the world's coffee market works and how is Good Beans trying to change that?

How the world's coffee market works and how is Good Beans trying to change that?

Why are we doing this?

For close to 150 years the coffee industry in El Salvador hasn’t changed that much. To be fair, it hasn’t changed much in most producing countries. Coffee seeds are planted, trees are grown and taken care of, and eventually (in about 3-4 years) the first fruits of years of labor are harvested. While it depends on the specific variety, most Arabica trees will produce enough coffee cherries to get a little over 1 lb (around 500 grams) of dried, green coffee. In El Salvador we call that “oro” or gold. At one point it was.

For the past 150 years the coffee industry in El Salvador has basically looked like this. Once the coffee cherries are ripe at the end of the rainy season the harvest season in El Salvador begins. Coffee matures at different rates depending on the altitude and other microclimate conditions, but in general it’s haversted from late October to late January every year. The lower elevations mature first, the higher elevations later. As the coffee cherries don’t mature at the same rate, even within the same tree, it’s an arduous manual process taking weeks. Coffee pickers visit each tree and remove only the ripest red cherries and leave the yellow and green ones to continue growing, and then they do another pass a week later and pick the ripe ones, and this process continues for a few weeks until everything is picked. 

The best, ripest cherries without any defects are what’s known locally as the corte gourmet and these produce the finest coffees. There’s a market for all the coffee the tree produces, but the best cherries get the best price. These best cherries are where all our coffees at Good Beans come from, as we’re a specialty coffee roaster and shop, but even the semi-ripe cherries and the unripe ones get sold and often end up in lower quality supermarket blends and processed further into cheaper coffees. 

Once the coffee cherries are harvested and then they undergo some level of processing at a Beneficio, or coffee mill.  Natural (or dry) process coffees are when the cherries are dried whole under the sun and wind of the Salvadoran summers. The entire cherry dries onto the bean, on clay patios or African beds (raised structures to allow for better air circulation) and are then, once dried, the actual beans are mechanically separated in a process called “trilla” by a machine, the trilladora. This is the most basic way of processing coffee, but when done well, will lead to a delicious and fruity cup. When done poorly, it can lead to off flavors and molds on the outside of the cherries that develop when the moisture content is still high. It’s natural, and as such many variables are outside human control, a poorly timed out-of-season storm can interfere with the process but with over a century of experience the best farmers have learned to mitigate these eventualities. 

Some other coffees undergo all sorts of different processes. One of the most common worldwide is the washed process in which the beans are mechanically separated using water from the pulp, mucilage and skin of the cherry and are then dried. This process is very common, albeit water-intensive, due to it’s repeatability and consistency in the end product. Some coffees are honey processed, in which the skin and a good amount the mucilage is mechanically removed from the cherry before drying leading to different flavors, or semi-washed which uses low amounts of water in the honey process to remove most, but not all, of the mucilage before drying. Fermentations can take place depending on the process and the desired end results. 

At the end of any of these processes you obtain the dry, green (unroasted) coffee or oro. 

In one manzana of land, about 7000 m2, you can get anywhere from 5-20 quintales oro every year. 1 quintal oro is 100 lbs of green, dried, coffee beans. 

For 150+ years farmers have collected their oro and exported it. If they’re a large farm and have over 40 hectares of coffee they can generally export it themselves, if they’re a small farm they sell it to a cooperative for export. Generally speaking you can fit up to 18 tons of green coffee in a shipping container and off it goes to a months long voyage at sea to arrive at a port in a consuming country where green coffee importers receive it and distribute it to roasters in the country or region. The coffee is then roasted and sold. 150 years ago it was mainly sold as factory-made coffee ground up in cans which consumers bought at their local reseller and brewed it at home in percolators. Nowadays it’s sold like that or in K-Cups, or bags, or Nespresso pods and many other ways, or in the case of the best coffees, at specialty roasters local to the consumer. 

So how much does the producing country get for the hard work? Nowadays (December 2023) about $1.70 per lb, this is what’s known as the C-Market price and it is set by the market in the NYSE ICE Intercontinental Exchange. The farmer gets less than that, but in general we can say that 1 tree produces in one year under $2 of value for a producing country. The best coffees get better prices, but even with the very best coffees it's very rare to see over $5/lb with most specialty green coffees trading under 2X the C-Market price. 

If you go to a specialty roaster in your local city or area you’ll see coffees being sold for upwards of $20-30/lb and even supermarket coffees are generally around the $10-15/lb range. Where does the rest of the money go? Intermediaries. Farmers sell to co-ops, who profit, co-ops sell to exporters who profit, exporters sell to importers, who profit, importers sell to distributors, who profit, distributors sell to roasters, who profit, roasters sell to coffee shops, who profit. Profit is great! But the distribution of the profit is heavily skewed to consuming countries and not producing countries and has been that way for centuries and it’s often done at the expense of the coffee growers who put in the most work and resources and get the least in return. 

For 150 years El Salvador, and most producing countries, have exported the least valuable product in the entire chain. Good Beans is our little grain of sand to try to change this by providing you, the consumer, the option to get your roasted coffee directly from the origin bypassing all traditional intermediaries. You get a better price and the producing country actually benefits from the coffee that’s grown here. 

Our coffee is planted in El Salvador, harvested in El Salvador, processed in El Salvador, roasted in El Salvador in a roaster manufactured in El Salvador, packed in bags made in El Salvador, with labels made and designed in El Salvador, shipped in a box made in El Salvador, by the Salvadoran post office to your door. Buying coffee directly removes the intermediaries and supports not only the coffee growers, but entire industries across El Salvador. From the grower, to the roaster, to the roasting machine manufacturer, to the bag manufacturer, to the cardboard industry and the logistics industry.

With our model instead of 1 tree producing under $2 of value for El Salvador, 1 tree can produce up to $20 of value supporting a variety of industries and paying taxes along the way. Help us change the 150 year old model by buying coffee proudly made 100% in El Salvador, miles from where it’s grown.

Back to blog