The specialty coffee industry has long prided itself on doing business differently. From its inception, the sector has championed transparent supply chains, meaningful relationships, and a commitment to quality. 

Yet as coffee price volatility continues, roasters face an increasingly complex challenge: how to maintain these values while ensuring their businesses remain commercially viable.

This tension between ethics and economics isn’t new, but it has intensified. Rising C prices, climate-related supply disruptions, unprecedented tariffs, and increased operational costs have forced many roasters to reevaluate their sourcing strategies. 

For some, this has meant compromising on the direct trade relationships that once defined their business model. For others, it has reinforced why these partnerships matter more than ever, not just as a moral imperative, but as a strategic advantage in an unpredictable market.

I spoke to Angela Suarez and Emilia Castellanos at Café Tío Conejo, Bryce Roszell at Open Seas Coffee, and Kevin O’Connor at The Tryst Trading Company to learn more.

You may also like our article on how high prices changed the meaning of direct trade.

Why direct trade is at the core of specialty coffee

The specialty coffee movement emerged from a fundamental belief that coffee could – and should – be traded in new ways. Unlike the commodity market’s impersonal transactions, direct trade prioritised transparency, traceability, and equitable partnerships that recognised the skill and labour behind exceptional coffee.

“Specialty coffee was built on the drive to do things differently,” explains Kevin, Head Beverage Manager for The Tryst Trading Company, a restaurant and café group based in Washington, DC, the US. This philosophy shaped the industry’s early development, creating a culture where quality and fairer compensation were intrinsically linked.

For producers, direct trade represented recognition that the commodity market had long denied them. 

“Direct trade is fundamental to specialty coffee because it’s the justification for producers like ourselves to be as sustainable as possible in all aspects,” says Angela, the owner of Café Tio Conejo, a specialty coffee farm in Caldas, Colombia. “It means that others recognise our hard work, something that might not be as transparent in other markets.”

How high coffee prices changed business

However, the persistent volatility of 2025 has shifted how the industry utilises direct trade. Coffee prices reached historic highs in February, placing unprecedented pressure on roasters’ margins. Climate change, the diminishing of suitable growing regions, and increasing production costs for farmers suggest that high prices are now the “new normal”. 

Adding to these challenges, the uncertainty surrounding US tariffs on coffee-producing regions has further complicated the situation for many supply chain actors. Although the Trump administration recently exempted most coffee imports, steep 40% tariffs remain in place for Brazil.

Initially a values-driven movement in coffee, direct trade increasingly functions as a practical business strategy. While the underlying principles remain unchanged, roasters now emphasise the role of direct trade in supply chain management and risk mitigation.

“When buying coffee directly, you drastically increase the stability of your buying strategies,” says Bryce, the owner, founder, and executive director of Open Seas Coffee, an award-winning specialty coffee roaster in Stevensville, Maryland, the US, that celebrated its tenth anniversary this year.

“You are committing to coffees while they are still growing, which brings predictability for your growing partners,” Bryce adds. “This, in turn, helps ensure access to a reliable supply of coffees that are much less affected by drastic price shifts, at fair prices for all involved.”

This oversight becomes essential when managing volatile markets. Direct relationships enable roasters to anticipate supply issues, collaborate on pricing with producers, and maintain consistency for their customers – advantages that traditional commodity trading can’t offer.

How direct trade has become an effective business strategy

Specialty coffee’s passion-driven origins remain central to its identity, yet roasters and producers need to balance idealism and pragmatism. Success depends on honouring foundational values while implementing sound business practices that ensure long-term viability.

Open Seas Coffee, for instance, embodies this balance through three core pillars: intentionality, interconnectedness, and a commitment to quality. These operational principles guide every business decision, from sourcing to customer service.

“I have never bought into the concept that business and ethics need to be mutually exclusive or that they are fighting one another,” Bryce says. “For a business to hold real significant value, it needs to be pushed forward by its core values towards mutually beneficial profitability. 

“Profitability that is gleaned out of benefiting one party at the cost of another is nothing more than doubling down oppressive cycles that lead to inequities,” he adds.

This philosophy challenges the assumption that ethical sourcing inherently reduces profit margins. Instead, it reframes sustainability as a competitive advantage that strengthens every link in the supply chain.

“When we construct long-lasting relationships and have standardised or narrowed down pricing for a couple of years, the fact that the stock market prices change daily doesn’t matter anymore,” Emilia explains. “With direct trade, if the coffee maintains its quality, the price is not the only thing in mind.”

The commercial benefits extend beyond price stability, helping foster brand loyalty. “We have committed to our community to offer high-quality coffee at everyday affordable prices, and Open Seas Coffee helps us keep that promise,” Kevin explains.

By embedding values into business strategy rather than treating them as separate concerns, roasters create resilient models that perform better during market uncertainty while strengthening partnerships across the supply chain.

Operating with intentionality

Intentionality in specialty coffee extends beyond marketing language. It must permeate every operational aspect of a business. This means viewing one’s position in the supply chain not as a transaction point but as a relational hub connecting producers, traders, roasters, café owners, and consumers.

Community building forms the foundation of this approach.

“As you pursue what creates standout coffees and how they are different from their peers, you naturally start asking the ‘why’ and ‘how’ questions, and those lead you to producers,” Bryce explains.

These relationships require genuine investment. Open Seas Coffee, for instance, implements intentionality by providing feedback to producers regardless of whether they purchase their coffee, connecting producers with other roasters when coffees aren’t the right fit, and cupping with wholesale clients to understand their specific needs.

“When other roasters turned us away on creating a custom blend in favour of an off-the-shelf product, Open Seas Coffee jumped at the opportunity,” Kevin recalls. “The intentionality and relationship building that they offer as a partner is unmatched.

“Through these relationships, we can adapt to changing conditions when sourcing coffee and allow flexibility when implementing our growth strategies,” he adds.

For producers, this intentionality manifests as genuine partnership rather than transactional buying. 

“Over the years, our relationship with Open Seas Coffee has remained the same as it has always been, if not better,” Angela says. “They have roasted our coffees for our own events while also buying green coffee from us for their wholesale partners.”

When roasters approach direct trade with authentic intentionality, viewing producers as partners rather than suppliers and café owners as collaborators rather than customers, they create supply chains that withstand market turbulence while delivering exceptional quality. 

These relationships require investment, transparency, and a willingness to share risk and reward equitably. However, the commercial benefits – from supply stability and quality consistency to brand differentiation and customer loyalty – make this approach not just ethically sound but economically sensible.

“By focusing on quality and working collaboratively towards that goal, it naturally decentralises the power dynamic and more evenly distributes it back to producers,” Bryce says. “It keeps us honest in that it allows producing partners to have a more marketable product and seek other buyers if we cease to be good partners.”

Ultimately, intentionality transforms how roasters conceptualise their role. Rather than simply purchasing coffee, they become facilitators of relationships that span the entire supply chain.

Price volatility and market uncertainty will continue to challenge roasters in making difficult decisions about their sourcing strategies and business models. Direct trade isn’t a luxury that businesses must sacrifice during difficult times; it’s a strategic asset that can provide stability, differentiation, and resilience.

The challenge for roasters isn’t choosing between values and profitability, but recognising the fundamental connection between these two elements. Companies that build their operations around meaningful relationships and shared sustainability can then secure their bottom lines.

Enjoyed this? Then read our article on what direct trade really means.

Photo credits: Open Seas Coffee

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Price volatility has been a defining factor of the coffee industry in 2025. 

In early February, the C price hit US$4.41/lb – its highest level on record – signalling a turning point for producers, roasters, and traders. Coffee prices have dipped, but remained comparatively high, in the months since.

However, following the US government’s decision to implement staggering 50% tariffs on Brazil, the C price jumped again, creeping back up to the record levels seen earlier in the year, but then sharply dropped following reports of a record harvest for Vietnam and possible tariff exemptions for coffee. Climate change, political instability, and global economic pressures are all exacerbating the situation.

Essentially, it’s unlikely that market volatility will slow down any time soon – and roasters need to be prepared. Understanding these dynamics and preparing for continued turbulence has become essential for sustainable business operations. Roasters who adapt strategically will be better positioned to thrive in the face of ongoing uncertainty. 

I spoke to Kenneth Barigye at Mountain Harvest Coffee and Matt Randell at Langdon Coffee Merchants to learn more.

You may also like our article on why roasters’ price increases are different now.

Why coffee prices have stayed so high in 2025

The coffee industry is navigating one of its most turbulent periods in recent history.

Record green coffee prices – driven by unfavourable weather and ongoing supply shortages in Brazil and Vietnam – have coincided with rising inflation and high interest rates. This has created a perfect storm of challenging market conditions for producers, traders, and roasters alike.

Climate-related disruptions are affecting coffee producers, in particular, worldwide, not just in Brazil and Vietnam.

“The most significant impact was caused by delayed rains, which disrupted the flowering of our coffee plants,” explains Kenneth, the managing director at Mountain Harvest Coffee, an exporter in Uganda. “Coffee relies on the first rains to trigger uniform flowering, so the delays led to uneven flowering, which caused staggered cherry development and ultimately uneven ripening at harvest on Mt Rwenzori.”

The consequences were substantial, with production costs increasing dramatically to compensate for harvest shortfalls.

“These late rains shortened the grain-filling period, and the mountain produced smaller beans, which meant we had to purchase 20% more coffee cherries to get 1kg of green coffee,” Kenneth tells me. “Some regions saw even more severe impacts, with Mt Elgon experiencing a 50% drop in production compared to the yield estimated at the beginning of the year.”

While there’s a narrative that higher prices mean higher profits, these climate-related challenges demonstrate that the reality is far more complex. Unpredictable weather, rising fertiliser costs, and labour shortages all add pressure to farmers’ operations, eating into margins and creating more instability.

Political volatility and ongoing trade tensions have also added further layers of complexity.

“Geopolitical conflicts such as the Russia-Ukraine war disrupted global shipping routes, increased insurance premiums, and raised fuel prices,” Kenneth says. “Combined with the global shortage of shipping containers – especially after the Suez Canal blockage – freight rates have risen dramatically.”

Unprecedented tariffs have disrupted traditional trading patterns, too. US President Donald Trump’s decision to roll out sweeping tariffs – including a staggering 50% on Brazil – is reshaping global coffee trade as we know it.

According to data from the Brazilian Coffee Exporters Council (Cecafé), the country shipped 21,679 60kg bags of specialty coffee to the US in August, representing a dramatic decline of 79.5% compared to the same month in 2024. 

The Brazilian Specialty Coffee Association also reported that contracts have been suspended, cancelled, or postponed at the request of US importers who can’t afford to cover the steep additional levies.

Given its sheer scale as the world’s biggest coffee producer, Brazil has a huge influence over the wider market – driving price volatility across the board.

Why the volatility of coffee prices won’t slow down anytime soon

Political instability, trade wars, and climate challenges are driving price volatility, which means there is little respite for the coffee industry in the years ahead. 

“Volatility is here to stay,” says Matt, the Head of Sales and Business Development at Langdon Coffee Merchants, a specialty green coffee importer with offices in the UK and Australia. “News that used to spread slowly now travels around the globe in seconds. Climate instability is also a new reality, and global demand for coffee is only increasing.”

Indeed, the most recent National Coffee Association 2025 National Data Trends report found that specialty coffee consumption is at an all-time high in the US; 48% of adults consumed specialty coffee in the past day. Meanwhile, in emerging markets like India, coffee consumption is growing at pace, reaching an estimated 91 tonnes in 2023.

But as global coffee stockpiles dwindle, the coffee supply chain is increasingly strained to keep up with growing demand, fuelling the peaks and troughs of the volatile C market.

Roasters, in particular, have needed to adapt drastically to keep their businesses viable and profitable, preparing them for the challenges ahead. This means investing in healthy supply chains that can withstand ongoing disruptions and building resilience through strategic partnerships and reliable access to diverse coffee sources.

Working closely with trusted importers and exporters is often one of the most effective ways to provide stability and leverage expertise. Traders like Langdon Coffee Merchants serve as a bridge between roasters and producers, offering comprehensive supply chain solutions that address market volatility through established relationships and market intelligence.

“We can benefit both the producer and roaster when we are intentional with our green coffee buying,” Matt explains. “Whether it’s a new take on supply chain dynamics, showcasing the best that an origin has to offer, or a laser-sharp focus on smallholder relationships that we have nurtured for a long time, we aim to create mutual value.”

A key aspect of this is providing access to a wide range of coffee origins, allowing producers and roasters to weather market turbulence. Langdon Coffee Merchants, for instance, gives roasters access to a diverse selection of coffees within stable, well-supported supply chains that ensure they can meet demand and manage quality and flavour standards.

How roasters can prepare for further price volatility

The coffee industry is entering a new era, shaped by consistently high prices and evolving market dynamics. For roasters, successfully navigating this volatility requires strategic preparation across multiple operational areas.

“Roasters enjoyed healthy margins off the back of a cheap market rate for the past 20 or so years, building big teams and large account management structures,” Matt explains. 

But now, with elevated market rates, roasters need to change their sourcing strategies or commit to ones they know work.

“We have advocated for shorter contracts, three to four months at a time, giving roasters a few bites at the cherry to come out with a weighted cost they are comfortable with,” Matt explains. “We also feel it is beneficial in this climate to be decisive, booking coffee that you know you will need, rather than waiting to beat the market.”

Traders like Langdon Coffee Merchants support both adaptive and established sourcing strategies through forward-purchase commitments and market insights that help roasters access trade finance and plan with greater confidence. These arrangements reduce exposure to sudden market swings while enabling more predictable pricing structures.

Long-term partnerships also create invaluable stability during turbulent periods. These working relationships foster two-way communication channels that enable producers and roasters to share their challenges and successes, promoting mutual understanding and collaboration.

“Despite these current challenges, our investment in long-term buyer relationships over the past seven years has proven invaluable,” says Kenneth. “We emphasise transparency, traceability, and consistent communication; our buyers understand the realities we face on the ground.”

Trust-based relationships often strengthen under pressure rather than weaken – a much-needed dynamic in today’s market. 

“Buyers appreciate our honesty, our efforts to maintain quality, and our commitment to farmers’ resilience, especially in difficult times like these,” Kenneth adds. “We work closely with buyers to adjust timelines, agree on fair pricing structures, and share the risk in ways that protect all of us.”

Market volatility makes sourcing flexibility essential for maintaining a consistent supply and meeting customer demands. Understanding origin-specific challenges then becomes crucial for effective diversification planning.

“Almost all of Uganda’s coffee exits through Mombasa Port, and this dependence means any port congestion, strikes, or political disruptions in Kenya immediately delay Ugandan exports,” Kenneth explains. “Additionally, over 80% of Uganda’s coffee comes from smallholder farmers, who often have 0.5 to 2 acres. This creates variability in quality, as not all farmers have access to training, post-harvest handling infrastructure, or inputs.”

However, for roasters, who are increasingly compelled to focus on product diversification and marketing strategies to compete in today’s competitive industry, maintaining such in-depth oversight over their supply chains is challenging. Intermediaries, such as exporters and importers, that focus on retaining value in the supply chain can help fill this gap.

“Our partnership with Langdon Coffee Merchants demonstrates that in times of uncertainty, long-term trust and shared values are the strongest safeguards for both producers and roasters,” Kenneth explains. “By working with trusted partners, we can turn global uncertainty into resilience – ensuring quality coffee and sustainable livelihoods for farmers.”

This approach enables roasters to offer unique products and authentic stories that help them differentiate, creating sustainable competitive advantages regardless of market conditions.

“Focus on the value you have beyond just the race to the bottom on price,” Matt advises. “We encourage long-term relationships and provide communication lines between producer and roaster, demonstrating the real value of their coffee.”

The coffee industry’s current volatility represents a fundamental shift requiring strategic adaptation. Roasters who develop strong partnerships, implement flexible sourcing strategies, and focus on value creation beyond price competition will be better positioned for long-term success.

Building trust-based relationships with reliable importers and producers fosters stability during turbulent periods, while also enabling access to diverse coffee sources. Market uncertainty will persist, but roasters who embrace strategic preparation can transform challenges into competitive advantages, ensuring business resilience regardless of future market conditions.

Enjoyed this? Then read our article on how high coffee prices changed the meaning of direct trade.

Photo credits: Langdon Coffee Merchants

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Consumers are paying closer attention to the environmental and ethical footprints of their purchases, especially coffee. Many rely on certifications to help guide their decisions, seeking out more sustainable coffee options – and research shows they’re often willing to pay premium prices for them.

For producers, this means certified coffee can be a viable means of entering new markets, increasing prices, and investing in long-term growth. Moreover, they also present opportunities to market coffee more effectively, demonstrating verifiably higher social, economic, and environmental standards.

However, not all certifications are equally beneficial for coffee producers. While some can guarantee higher prices and long-term buyers, others can carry costly administrative burdens that minimise impact.

I spoke to Ítalo Henrique, Bruna Costa, and Farlla Cristina Gomes Vieira at the Brazilian cooperative Expocacer to learn how they are addressing these challenges.

You may also like our article on what regenerative agriculture actually means.

The role of certifications in coffee

Certifications have long been an effective means of establishing higher social, economic, and environmental standards in the coffee industry. These principles aim to achieve goals such as protecting biodiversity in coffee-growing regions and helping producers earn a living wage – two factors that are more important than ever as the climate crisis worsens and price volatility persists.

Some examples of prominent certifications in the coffee industry include Fairtrade, UTZ (now part of Rainforest Alliance), country-level organic certifications such as USDA Organic, 4C (the Common Code for the Coffee Community), and Regenerative Organic Certified – a new scheme that supports regenerative agricultural practices.

In an ideal scenario, certification can guarantee a price premium and a better income for producers compared to selling coffee at low commodity prices in an increasingly volatile C market.

“Certification transforms coffee from a commodity to a product with a history and a purpose, and this creates added value in the supply chain,” says Ítalo Henrique, the Commercial Director at Expocacer, the Cerrado Coffee Growers’ Cooperative.

From an ecological perspective, certifications serve as a strategy to combat climate change and address the growing list of environmental challenges in coffee-growing regions. 

“Sustainably produced coffees are the only way to keep coffee production viable in the future,” says Bruna Costa, the director of Bossa Coffee Company, which represents Expocacer’s UK logistics hub. “The implementation of sustainable techniques helps mitigate issues related to climate change, which causes severe droughts in coffee-producing regions. For the past five years, especially, these have been severely challenging for farmers.”

Certifications are also effective marketing tools, as they offer producers a universal way to communicate their ethical and sustainable practices to roasters and consumers.

In some cases, sustainability labelling increases the value of coffee products and gives them a competitive edge in meeting the demand of more eco-conscious consumers. Studies have shown that certifications have helped increase retail prices for Fairtrade coffee in Italy by 30%, in Germany by 55%, and in the US by 15% to 30%.

This offers producers and cooperatives opportunities to enter new markets, particularly in Europe – the world’s largest market for certified coffee – that help them command higher prices.

But there are challenges to address with coffee certifications

There are clear benefits to certifications in the coffee industry, but there are also hurdles to navigate.

First and foremost, adhering to certifications is often costly for producers, many of whom find it increasingly difficult to justify the investment. Some programmes pose financial barriers in many coffee-growing regions, limiting farmer participation, especially among smallholders.

Certifications can cost farmers hundreds or thousands of dollars per year, depending on farm size, coffee volume, and country-level criteria. Growing certified coffee can also be logistically challenging, as verification processes commonly require extensive documentation, regular audits, and inspection fees. 

This administrative burden can divert farmers’ attention away from caring for their crops and deplete resources from limited funds. Some cooperatives and supply chain partners will bear these administrative and financial costs, but farmers are still responsible for transitioning their farms to meet certification requirements. This can be a years-long process in which farmers may experience lower yields and higher operational costs before earning any price premiums. 

Farmers who successfully obtain certification may also face a reality in which they are not paid enough to cover the cost of the extra labour and certification fees. With a weaker negotiating position against larger green coffee buyers, some producers can struggle to sell their certified coffee and may have to settle for lower prices closer to market rates.

Contributing to this problem is that green coffee buyers can pick and choose which of the growing number of certifications they want to label their coffee with. 

An oversaturation of sustainability and ethical labels means the impact of certification programmes can quickly become diluted. Both producers and consumers struggle to keep up with what each label means and which ones hold more value. 

Potential consumer confusion around certifications can exacerbate their “label fatigue” and “decision paralysis,” and possibly disincentivise them from buying certified coffee altogether. Many studies emphasise the importance of comprehensive consumer education regarding the meaning and value behind various certifications.  

In order for certification schemes to be expanded and sustained meaningfully, they must be beneficial and financially sustainable for producers. This entails lower participation costs, providing adequate support when applying for and adhering to certification schemes, and guaranteeing that returns exceed the costs of transitioning farming practices and potential yield declines.

Supply chain actors, such as Expocacer, are working to offer these solutions. In 2023, the cooperative introduced ECO, a self-verification system that enables producers to comply with environmental, social, and governance (ESG) standards. 

“The platform was created as an accessible certification, adding credibility supporting the continuous improvement and positioning the producers competitively in the global market,” Ítalo says. The cooperative currently works with 700 producers in Brazil, exporting to more than 30 countries across five continents. 

“ECO highlights the best practices and progress in the sustainable management of producers in the Cerrado Mineiro region through continuous improvement,” says Farlla Cristina Gomes Vieira, the Technical and Sustainability Manager at Expocacer. “This way, we reach the largest number of producers, as the protocol focuses on promoting innovative coffee production.”

How producers can use certifications to sell their coffee for more

Certifications are one of many tools producers can use to market their coffees more effectively to the growing customer base that demands traceable and verifiable sustainable coffee. 

“Consumers are more conscious of the social and environmental impact of their purchases, especially coffee,” Ítalo says. 

Multiple studies have found that increased transparency in environmentally sustainable coffee production significantly increases consumers’ likelihood of purchasing. Furthermore, consumers are willing to pay more for coffee with certifications that align with their values and provide credibility.  

“Buyers are increasingly seeking transparency and traceability in their supply chains, so certifications like ECO reassure that the coffee is produced with respect for the people and the environment,” Ítalo explains.

Bruna highlights the Brazilian farm AgroBeloni as an example of the producers that Expocacer works closely with: “Fernando and Elessandra Beloni, who pioneered regenerative agriculture, produce sustainable coffees and high-quality specialty-grade lots.”

However, no matter how skilled and successful producers are in their sustainable coffee farming, they still need more support in accessing certifications that reward their efforts.

One solution is to empower producers through self-verification systems, like ECO, which also takes into account region-specific capacity.

“By creating these local standards, we give the producers more autonomy, reduce costs, and bring them closer to global consumers who care about responsibility and traceability,” Ítalo says.

Credible coffee certifications must also undergo independent verification to confirm authenticity and ensure adherence to strict quality standards.

In addition to internal audits conducted by Expocacer, the ECO programme includes second-party audits carried out by an independent company, and the results are publicly disclosed in ESG reports. 

“The use of external auditors provided a level of independence and rigour comparable to that of a third-party audit,” Farlla says. “Our sustainability department works alongside coffee growers, offering support and training so they can adopt and demonstrate these necessary practices, strengthening our production chain.”

In 2024, the ECO protocol was validated by the Global Coffee Platform (GCP), a multi-stakeholder membership association that differentiates and vets coffee verification and certification schemes. The GCP developed a Coffee Sustainability Reference Code, which outlines principles of sustainability for coffee production and primary processing, including the elimination of child and forced labour, no deforestation, and no use of prohibited pesticides.

Certifications will continue to play a key role in the marketing of coffee – especially as consumers take more interest in sustainable, ethical, and environmentally-responsible products.

The opportunities for producers to receive higher prices and enter new markets through certified programmes are growing, but offering the right kind of support is a prerequisite for their success. By lowering barriers to entry and providing assistance with the transition to growing certified coffee, the responsibility of upholding strict – but necessary – standards is shared.

Enjoyed this? Then read our article on why soil health and regenerative agriculture became trends in specialty coffee.

Photo credits: Expocacer

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What began as a well-intentioned initiative to combat deforestation has evolved into a complex regulatory framework that has fundamentally altered how coffee businesses must approach supply chain management and compliance.

Then, EUDR was delayed by a year, granting industry professionals more time to comply with the rules and guidelines. A recent announcement provided further simplifications, seeking to reduce the administrative burden and facilitate implementation by 30%, according to the European Commission. 

I spoke with Holger Preibisch of the German Coffee Association, Giovanna Tobar at Cumbres, Kristin Lipps at 4C Services, Louisa Sutton at DRWakefield, and Mark Furniss at Enveritas to learn what coffee businesses need to know.

You may also like our article on why UK importers and roasters need to be prepared for EUDR.

The challenges of EUDR

The EUDR marks a significant turning point in international trade and environmental governance. It goes far beyond the traditional due diligence frameworks and introduces a whole new level of legal and logistical complexity. 

“EUDR is a paradigmatic shift in compliance architecture. Given the EU market’s size and influence, the legislation is likely to set a precedent, encouraging similar legislations in other jurisdictions, and pushing global supply chains towards greater transparency,” says Holger Preibisch, the CEO and General Secretary of the German Coffee Association.

The administrative burden imposed by the EUDR represents an unprecedented challenge for every level of the coffee supply chain. Producers, exporters, importers, and roasters face compliance requirements that demand extensive documentation, technological infrastructure, and financial resources that many in the industry lack. 

The regulation requires businesses to maintain comprehensive due diligence systems that collect detailed information about every aspect of their supply chains, from the precise geolocation of farming plots to evidence of legal production practices. 

Against the backdrop of persistently high coffee prices, rising operational costs, and the continuous threat of increased tariffs, the EUDR is a major challenge that could potentially destabilise already fragile profit margins across the coffee value chain. 

However, new measures could help suppliers, buyers, and roasters by reducing their administrative burden, amount of required paperwork, and costs.

New simplifications reduce the administrative burden

Under the new simplification measures, companies can submit annual due diligence statements, rather than submitting separate statements for each shipment or batch placed on the EU market. 

Large companies can reuse due diligence statements when goods that have previously been on the EU market are reimported, thereby reducing the amount of new information that must be submitted. Members of company groups can also appoint representatives to submit the due diligence reports on their behalf. 

“For exporters like us, this change is a big relief. Submitting a due diligence report with each shipment would have been operationally intensive and potentially very expensive,” says Giovanna Tobar, Sales Coordinator for Europe at Cumbres. “Now, with an annual statement, we can focus on maintaining solid internal systems and accurate geolocation data rather than drowning in paperwork.

“It also gives roasters and importers more predictability when planning purchases and logistics,” she adds.

Previously, each shipment required individual due diligence statements, resulting in exponential increases in administrative workload for companies handling multiple origins and frequent shipments. The shift to annual reporting allows businesses to consolidate compliance activities, streamline documentation processes, and reduce the per-transaction costs associated with EUDR compliance.

The timing of this administrative relief proves particularly significant given the current trade environment. With discussions of potential tariffs affecting various sectors and ongoing concerns about protectionist trade policies, any reduction in administrative burden provides welcome relief for businesses already navigating complex international trade requirements. 

The EU can play a crucial role by supporting coffee-producing countries in collecting geodata and establishing robust databases. Ensuring that producers maintain ownership of their data is essential for fostering trust and enabling the effective implementation of deforestation-free practices. 

“Further guidance and clarification on how compliance can be proven and how implementation is expected would help reduce uncertainties in the market,” says Kristin Lipps, the Senior Sustainability Manager at 4C Services.

“The reduced administrative burden can especially benefit downstream operators, located within the EU, who can now make easier use of previously submitted due diligence statements for goods that have already entered the EU market,” she adds.

Implications for the coffee value chain

The development raises critical questions about what lies ahead for the coffee industry as it continues to navigate the EUDR landscape. While the administrative simplifications represent positive progress, business operators must consider whether these changes truly make compliance easier for all participants in the coffee value chain, particularly those in producing countries who face the greatest challenges in meeting EUDR requirements.

For coffee roasters, the annual reporting system offers significant operational advantages. Instead of managing due diligence documentation for each shipment arrival, they can now develop comprehensive annual compliance reports that cover their entire sourcing portfolio. 

This approach enables more strategic planning, more effective resource allocation, and lower administrative overhead. However, roasters must ensure that annual reporting does not compromise the thoroughness of due diligence processes or create gaps in supply chain monitoring.

Traders and importers benefit substantially from reduced administrative burden, as these businesses typically handle high volumes of transactions across multiple origins. The ability to consolidate compliance reporting reduces both direct costs and the complexity of managing multiple simultaneous compliance processes. 

However, business operators still face complications.

“Since each consignment would still need to be accompanied by the due diligence material, the timing of submitting this to TRACES is of little relevance now. In some ways, an annual cadence complicates things. If there are discrepancies, it will be long after the event, which will make reconciliation more difficult,” says Mark Furniss, the Senior Director of Partnerships at Enveritas.

“Those importing beans to the EU should be very aware of their obligations. They must be able to trace all products back to the plots of production and be confident that the coffee is in compliance with the regulations. Failure to do so could result in significant fines,” he adds.

Coffee professionals in producing countries

The implications for coffee producers, particularly smallholder farmers, remain complex despite administrative simplifications. While reduced reporting frequency may lower the administrative burden on producer organisations, the fundamental challenges of implementing traceability systems, obtaining geolocation data, and documenting legal compliance persist. 

Coffee buyers and exporters in producing countries face mixed implications from these changes. Reduced administrative costs may lower the overall expense of EUDR compliance, potentially making European market access more financially viable for smaller operators. 

However, the core requirements for supply chain mapping, risk assessment, and mitigation measures remain unchanged, indicating that significant investments in compliance infrastructure are still necessary.

“The transition remains difficult across the entire value chain. Producers, particularly smallholders, continue to struggle with limited access to technology and the necessary digital expertise,” Holger explains. “Traders are in the middle, facing pressure from both suppliers and buyers to ensure compliance.

“Roasters and importers may benefit from increased supply chain transparency, but they, like all other actors, have to absorb significant upfront costs. These include investments in new systems, training, and legal adaptation,” he adds. “Importantly, this cost burden is not limited to roasters alone. Producers, cooperatives, exporters, and traders are all incurring similar expenses to meet regulatory requirements.”

For coffee consumers, these administrative changes should theoretically result in lower compliance costs at the end of the supply chain, potentially moderating price increases related to EUDR implementation. However, the extent to which administrative savings benefits consumers depends on competitive dynamics and market structures throughout the coffee value chain.

Persistent challenges and future considerations for the EUDR

Despite the welcome administrative simplifications, numerous challenges persist in EUDR implementation. The fundamental requirement for comprehensive supply chain mapping remains one of the most significant obstacles, particularly for businesses sourcing from regions with limited technological infrastructure. 

Business operators must obtain precise geolocation data for all farming plots, implement polygon mapping for areas exceeding four hectares, and maintain documentation proving legal production practices.

“Access to digital tools in rural areas, gaps in understanding at the farm level, and the cost of implementing traceability systems remain major hurdles, especially for smallholders,” says Giovanna.

“Another challenge is the lack of global alignment. While the EU is moving forward, other markets are not necessarily aligned, which creates tension for producers trying to meet multiple requirements,” he adds.

While administrative simplifications reduce paperwork burden, they do not address the underlying challenges of implementing traceability technology in remote farming communities or building the institutional capacity necessary for comprehensive compliance systems.

“Roasters exporting to the EU should begin collecting detailed location data now,” says Louisa Sutton, the compliance manager at DRWakefield. “Registration with the EU information portal and use of their training is also recommended.”

Financial barriers to compliance remain substantial despite reduced administrative costs. 

The initial investments in traceability technology, supply chain mapping, and risk assessment systems represent significant capital expenditures that many businesses, particularly smaller operators, struggle to accommodate.

The risk-based approach underlying EUDR compliance continues to pose challenges for businesses operating in regions classified as high-risk for deforestation. These classifications, while based on environmental data, may not accurately reflect the sustainability practices of individual producers or the progress made in forest conservation efforts.

“The coffee supply chain is long, complex, and unstable. The regulation imagines a short, simple, and stable supply chain. These two competing views are at the heart of the difficulties being encountered by the sector,” Mark says.

Looking forward, the coffee industry must continue advocating for practical implementation approaches that achieve environmental objectives without creating insurmountable barriers for sustainable producers. The administrative simplifications represent positive progress, but they constitute only one element of the comprehensive changes needed to ensure that EUDR implementation serves both environmental protection and equitable trade objectives.

The success of EUDR implementation ultimately depends on the coffee industry’s ability to develop collaborative approaches that support compliance while maintaining viable business models throughout the coffee value chain. 

Administrative simplifications provide valuable relief, but they must be complemented by continued investment in technology transfer, capacity building, and support for sustainable farming practices in producing countries.

As business operators navigate this evolving regulatory landscape, the key lies in viewing EUDR compliance not merely as a regulatory obligation but as an opportunity to strengthen supply chain sustainability, improve traceability systems, and build competitive advantages through verified environmental credentials. 

Enjoyed this? Then read our article on why roasters can’t be complacent about EUDR.

Photo credits: Cumbres, DRWakefield

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However, following a record high for global coffee prices in February 2025, what was once viewed primarily as a “social project” rapidly became an essential, smart business strategy.

For roasters, the traditional approach of purchasing coffee through importers at whatever the market demands became increasingly unsustainable. Without more control over supply chains, their vulnerability to market fluctuations was exposed.

I spoke with Dale Goulding at Green Coffee Collective and Raphael Studer of Algrano to learn more.

You may also like our article on why direct trade is about more than ethical business practices.

As coffee prices rise, direct trade becomes a financial strategy

Coffee prices reached historic highs in 2025, placing unprecedented pressure on roasters’ margins. This price volatility is unlikely to be a temporary blip; climate change, the diminishing of suitable growing regions, and increasing production costs suggest that elevated prices may become the new normal. 

Adding to these challenges, the implementation and uncertainty over US tariffs on certain coffee-producing regions have further complicated the cost equation for many roasters. These combined pressures are forcing a reconsideration of sourcing strategies across the industry.

“Roasters today face growing challenges driven by market volatility rather than simply high prices. Fluctuating coffee prices, shifting exchange rates (especially between the Euro and the US dollar), and the new US tariffs on green coffee imports create persistent insecurity. These strategies make financial planning extremely difficult,” explains Raphael Studer, the CEO of direct trade platform Algrano.  

“The larger the share of green coffee in a roaster’s earnings statement, the greater the impact on margins and overall business stability,” he adds.

When coffee prices surge, the value of established direct relationships with producers becomes apparent. Working directly with farms or cooperatives offers several advantages, including price stability through longer-term contracts, improved forecasting ability for future contracts, reduced vulnerability to market speculation, greater control over quality specifications, and opportunities to secure favourable prices before the market shifts. 

“Direct trade offers roasters valuable benefits like transparency, traceability, and relationship-building. Not only because they value these elements personally, but also because consumers increasingly expect a clear story behind their coffee, governments in Europe are pushing for more transparent supply chains, and producers themselves are eager to build direct relationships,” explains Raphael.

The valuable role of intermediaries in the coffee trade

The path to true direct trade, however, isn’t without its complexities.

Despite the appeal of eliminating middlemen, it is important to recognise that quality intermediaries still provide value in the coffee supply chain. The notion of roasters travelling to origin and personally selecting coffees directly from farmers has become somewhat romanticised in third wave coffee culture.

The logistics of international trade, financing, quality control, and shipping make truly direct relationships challenging for all parties involved. Even companies proudly advertising their direct trade credentials often rely on specialised partners to manage crucial aspects of the coffee journey.

“Direct trade, even when facilitated through managed platforms, isn’t a silver bullet,” says Dale Goulding, the co-founder of small-scale direct trade platform Green Coffee Collective. “Making a connection with a producer is only the beginning. Managing that relationship across time zones, languages, harvest schedules, logistics, and payments takes significant time and resources.

“Most roasters don’t have the bandwidth to handle all that consistently, especially at scale. There are also additional risks involved, including quality, delivery timelines, and volume,” he adds. “What looks great on paper can become a huge operational burden in practice. That’s why the strongest supply chains often have a mix of direct collaboration and trusted partners who help manage the complexity behind the scenes.”

The right kind and number of intermediaries can add immense value to roasters’ operations. Good sourcing partners help manage quality control, logistics, pre-financing, and communication, all of which free up both ends of the value chain to focus on key tasks.

Managing uncertainty in a consolidating green coffee market

A significant amount of consolidation is occurring in the green coffee trade sector. Mergers, acquisitions, and bankruptcies have reshaped the traditional coffee import landscape, creating uncertainty for roasters who rely on these channels. 

When an importing partner suddenly changes ownership, shifts focus, or exits the market entirely, a roaster’s carefully calibrated supply chain can be thrown into disarray. In this environment, having direct producer relationships provides a crucial element of stability.

“Consolidation often brings standardisation, longer lead times, and less room for flexibility or innovation. Roasters might find fewer options, and producers can struggle to get feedback or fair prices if they don’t meet strict volume or specifications requirements,” says Raphael.

“That’s why we prefer the term transparent trade over direct trade. The goal isn’t always to cut people out, it is to make sure everyone involved in the chain is visible, accountable, and working towards the same outcome,” he adds.

Investing the time and energy in building the direct trade relationships helps roasters create a buffer of sorts. They can maintain access to the coffees their business depends on, despite market uncertainty.

As direct trade increasingly proves its worth as a cost-management strategy, it’s essential to remember its origins. The direct trade movement originated as a means to ensure that producers received fair compensation and recognition for their quality, not merely as a clever business model for price stability.

“The appeal of direct trade isn’t just about storytelling. In today’s volatile coffee market, it can be a practical sourcing strategy,” Raphael says. “When roasters have a long-term partnership with the producers, they are more likely to secure consistent quality and pricing, even when the market fluctuates. Forecasting and budgeting become easier, and both sides can plan collaboratively for yield expectations, processing improvements, and even pre-harvest financing.

“When you can confidently stand behind the transparency of your supply chain, you are not just telling a good story; you are also building trust.”

The future of direct trade

As coffee prices remain volatile, more roasters are expected to adopt direct trade as a core business strategy, rather than just a marketing gimmick. This shift represents a maturation of the specialty coffee sector, where values-based practices are increasingly aligned with sound economic decisions.

For roasters, this means the investment would go beyond just telling a compelling story to consumers; it would be about creating a more resilient and adaptable business model in an increasingly volatile market. By developing genuine partnerships with producers facilitated by the right platforms, roasters can position themselves to weather price fluctuations more effectively than competitors who remain at the mercy of spot market prices and traditional import channels. 

“What matters most is collaboration. Producers have only so much capacity, and if they produce experimental lots that no one buys, they will need to offset that loss by charging more for their standard lots,” Dale tells me. “But if producers have a clearer view of what the market wants, they can plan better, reduce unnecessary costs, and ensure what’s produced actually sells. That benefits everyone in the chain.”

The specialty coffee businesses most likely to thrive in this new environment will be those that successfully balance commercial pragmatism with the genuine relationship-building that has always been at the heart of direct trade’s appeal.

“Making direct trade work consistently requires more than goodwill; it demands structure, the right tools, and real transparency. The opportunity today is bigger than ever: producers are facing the same volatility and uncertainty as roasters and are actively looking for stable, direct trade partners,” Raphael says. “In this environment, building resilient, transparent, and efficient supply chains isn’t just a nice-to-have; it is essential.

“Direct trade, when supported by the right infrastructure, gives both producers and roasters the ability to take control of their businesses and turn uncertainty into a competitive advantage,” he adds.

Volatile coffee prices are transforming direct trade from a primarily ethics-driven choice to an essential business strategy. While its roots in social responsibility remain important, especially for marketing authenticity, the financial benefits of direct producer relationships have never been clearer.

As the industry navigates these challenging market conditions, it is important to remember that the most resilient approach combines both the ethical foundations and economic advantages of direct trade.

“The real opportunity isn’t about choosing between ‘direct’ or ‘intermediated’ trade. It is about building transparent partnerships, one where producers and roasters understand each other’s needs and work together to meet them,” Dale concludes. “Trade is about trust, and whether that trust is built directly or facilitated through a sourcing partner, what matters is that it’s open, long-term, and focused on mutual success.”

Enjoyed this? Then read our article on why high coffee prices call for closer relationships in the supply chain.

Photo credits: Kat Melheim, Green Coffee Collective, Migoti Coffee, Mount Sunzu, Algrano

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According to a new UN FAO report, it will take almost a year for consumers to feel the effects of price spikes, most of which will impact cheaper coffee sold in supermarkets and convenience stores.

Specialty coffee operates outside the C market, but it is heavily influenced by broader market movements. While the price of commercial-grade coffee remains high, comparable to that of specialty coffee, could this create an opportunity for specialty coffee roasters to capture the attention of more customers? 

Or conversely, will more consumers opt for cheaper alternatives, curb their consumption, or stop buying coffee altogether?

I spoke to Albert Scalla at StoneX Group, Friso Miguel Spoor at Koffie Lente, and Sam Klein at Partners Coffee to learn more.

You may also like our article on why it’s never been more important to invest in coffee quality.

Understanding the volatility of coffee prices

The global coffee industry has recently navigated an extended period of high market prices. Over the last two years, green coffee costs have almost doubled, reaching an all-time high of US $4.41/lb in February 2025.

The situation is the result of a number of complex factors, but is primarily driven by ongoing supply shortages in Brazil and Vietnam, the world’s two largest coffee producers. Compounded by historically low global stockpiles, these disruptions in major producing countries have resulted in significant price hikes.

Sensing opportunity in this scarcity, commodity brokers and speculative investors have increasingly bet on continued price appreciation, which has further accelerated market volatility.

In recent weeks, following news of improved weather in Brazil and higher-than-expected harvest forecasts, coffee prices have stabilised just below US $3/lb. Although this is a sharp drop from the record highs seen earlier this year, it’s likely that the C price will remain at these levels – and could rise again.

Tensions in the Middle East remain high, which could impact key shipping routes through the Strait of Hormuz, driving up logistics costs. 

Additionally, the recent risk of frost in some of Brazil’s key coffee-growing regions could drive up prices, as traders and investors fuel a bullish market.

How the C price is affecting consumers

As the C price settles just below US $3/lb, it marks a significant increase on prices seen in July 2024, which reached a 52-week low of US $2.21/lb.

While many assert that this signifies a long overdue change, as coffee has historically been an undervalued commodity, price volatility affects all levels of the supply chain in various ways. For roasters and coffee brands, it means raising retail prices, and their customers feel the pinch.

The UN FAO report found that up to 80% of these price rises will be passed on to EU consumers within the next 11 months and to US consumers in just eight months. The residual effects of these price rises are expected to last for four years.

Brands like JM Smucker, which owns Folgers, Dunkin’ at Home and Café Bustelo, are warning of further retail coffee price increases in August, following earlier hikes in May, June, and October last year.

Some supermarkets and grocery retailers have pushed back, signalling that prices are reaching the limits of what consumers will tolerate. JDE Peet’s also faced backlash from European retailers for its price hikes, with some chains even refusing to stock its products during negotiations.

As major brands pass on costs to maintain their margins, we can expect to see a widespread shift in consumer behaviour.

Following trends in other markets that have experienced similar price shocks, consumers initially absorb increases. However, as prices remain high or continue to rise, they inevitably adjust their behaviour to cope with the elevated costs. This could include buying less of the brands they typically purchase, switching to cheaper alternatives or private label products, or stopping the purchase of these goods altogether.

Eggs in the US market are a prime example. Average prices for a carton of eggs have soared from US $1.49 in 2018 to US $5.18 in 2025. In response, over a third of US consumers said they have stopped buying eggs, and won’t begin to purchase them again until the price comes down to US $5 or less.

Specialty coffee also feels the effects

As the C market remains high, prices for commodity coffee have approached those of specialty coffee – potentially reshaping market dynamics.

Specialty coffee has consistently maintained a point of differentiation from commodity coffee. Quality, traceability, supply chain transparency, attention to detail, and craftsmanship have defined the specialty coffee industry since its inception, justifying the higher prices it commands.

Although specialty coffee operates outside the C market, with roasters and importers paying premiums for higher-quality lots, it is heavily influenced by broader market trends.

“When the C market rises, everything goes up, including the specialty market,” says Albert Scalla, the Senior Vice President of Trading at StoneX Group Inc. “The robusta market exploded last year because of a drop in production, which led to an increase in arabica prices, revealing how markets are interconnected.

“Coffee has been volatile in the past five years due to a number of variables, including Covid, climate change, high interest rates, freight challenges, consumption shifts, and inflation,” he adds. “Commodity prices are now where specialty prices once were two years ago.”

The implications of C price fluctuations can also vary between producing countries.

“The impact from a commodity price hike is always noticeable in specialty coffee,” says Friso Miguel Spoor, the founder of Koffie Lente. “Ethiopia set a uniform cherry price at the beginning of the season, for instance, which allows exporters to offer a relatively lower price compared to the price hike in the commodities. 

“However, in Central America, there are differences between the pricing approaches by exporters and coops and producers, depending on how steady their domestic markets are,” he adds. 

Could more people switch to specialty coffee as prices stay high?

The economic gap between commercial and specialty-grade coffees has narrowed, presenting an opportunity for specialty coffee roasters and brands to capture a larger market share. 

“When the market is high, all coffee starts to look expensive,” says Sam Klein, a green coffee buyer at Partners Coffee. “Why spend a lot of money on bad coffee when you could spend a little more on great coffee?

“If a coffee roasting company mostly buys commercial grades, they have fewer avenues to reduce costs than another company that mostly buys high-quality, differentiated coffees,” he adds. “And if your only value proposition is that your coffee is inexpensive, it could be difficult to compete when the market raises your costs.”

In late March 2025, Reuters reported that supermarket coffee prices could increase by 25% within weeks. Some supermarket chains, including Albert Heijn in the Netherlands, promised to absorb some of the additional costs, while others restocked coffee products at higher prices.

Shortly after two quick consecutive hikes, major Brazilian roaster 3 Coracoes raised its prices by over 14% in early March. According to ABIC, Brazilian supermarket coffee prices have already increased by 40% this year, with further increases anticipated.

With smaller, incremental hikes, such as US $0.25 or US $0.50 per cup, or by downsizing retail coffee bags to keep total purchase prices more manageable, specialty coffee roasters and shops could offer more value for money.

Offering accessible blends or cost-effective single origins could steer more commodity coffee drinkers towards specialty-grade products. With a smaller price margin than ever before, roasters can now effectively showcase a clear value proposition of quality and artisanal excellence.

But to maintain this point of differentiation and manage tight margins, many specialty coffee roasters are also increasing their prices, potentially discouraging consumers from making the switch.

Simultaneously, when the C price is high, there’s less incentive for producers to grow specialty coffee.

“When prices are high, it reduces the financial incentive for coffee producers to deliver high quality,” Sam tells me. “If you could do less work and still profit, why not do that? Cash flow also becomes a major challenge, particularly for exporters who need to pay producers but don’t have committed buyers for the coffee yet.”

Which direction will consumers go in?

Even as the C price dips, retailers are likely to keep passing costs on, and consumer behaviour will pivot.

“I don’t think higher commodity prices will necessarily drive more consumers toward specialty coffee, but I don’t think higher prices will destroy existing demand either,” Sam says. “Some consumers will react to higher prices and either switch to less expensive products or reduce consumption; others might look at how expensive more commercial coffee brands have gotten and decide the extra cost for specialty coffee is negligible.”

Examining other industries that have faced similar economic conditions, consumers are likely to seek out more affordable alternatives. 

A UC Berkeley study found that soda taxes drove down consumption in five major US cities. The research found that the retail prices of sugar-sweetened beverages increased by 33% over the two years following the implementation of the tax in each of the studied cities. During the same timeframe, there was a corresponding 33% decrease in purchases of these drinks, as consumers likely sought out cheaper alternatives.

In the coffee industry, more cost-effective private label brands may emerge as the top performers. A recent US study reveals that over the past four years, private brand sales have increased by nearly a quarter each year. 

Further price hikes could accelerate this trend. Coffee consumers could downgrade from roast and ground to instant, buy more blends and supermarket own-brand products, or simply drink less coffee.

Despite high coffee prices, consumption remains steady. Specialty coffee roasters could offer cost-effective, high-quality blends as a way for commodity drinkers to transition to specialty coffee without facing a significant economic hit. 

But consumers are likely to be hesitant to pay more for coffee, so specialty coffee brands will need to find a point of differentiation to communicate their value.

“It’s an interesting moment for specialty coffee. The specialty sector has often relied on low prices to make its value proposition: delivering better coffee to consumers in exchange for fairer prices to producers,” Sam concludes. “That still applies, even in the current commodity market, but the question to me becomes: will specialty coffee companies continue to believe in this mission when the cheap coffee is no longer available?”

Enjoyed this? Then read our article on how roasters can make high-quality lots stand out.

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For many, this is a welcome and long overdue change. Coffee has historically been, and in many cases still is, undervalued. Many producers, particularly smallholders, receive consistently low prices that don’t cover the costs of production, preventing them from earning a sustainable, livable income.

As the C price has risen, a narrative has emerged that higher market prices result in more money in producers’ pockets, but the reality is far more complex.

I spoke with Vanusia Nogueira at the International Coffee Organisation, Paul Stewart at TechnoServe, and Steven Thomas at Traffic USA to learn more.

You may also like our article on why record prices don’t necessarily make producers “price makers”.

A new era for the coffee industry

Last year was historic for the coffee industry. Following reports of dwindling supplies in Brazil and Vietnam, the world’s two biggest producers, as well as uncertainty about the EU’s deforestation regulations, arabica prices surged to their highest levels since the 1970s, marking a 70% increase.

The last record high for arabica futures was US $3.39/lb, following the severe 1977 frost in Brazil. This record, adjusted for inflation in 2025, is around US $17/lb. Although the C price is currently far from this adjusted number, it underscores the significance of its sharp upward trajectory over the last two years.

All the signs point to a new era for coffee: one where high, volatile prices are a lasting reality. Roasters and importers now operate on thinner margins than ever, forcing them to raise retail prices, which inevitably reshapes consumer behaviour. Many foresee a surge in at-home consumption as people shift towards more cost-effective ways to drink coffee.

On the other side of the supply chain, sustained high coffee prices appear lucrative, but the reality tells a different story. Many producers and exporters are moving cautiously. Current market volatility means that, should they commit to future sales at fixed prices, they expose themselves to financial or sourcing risks down the line.

Why coffee prices will stay high in 2025

According to a recent UN FAO report, coffee prices are unlikely to decline significantly this year.

Coffee is a sensitive crop that requires specific temperatures, rainfall, and soil conditions to produce good yields and quality. Coupled with rising global demand, the worsening climate crisis has caused production and stockpiles to dwindle rapidly.

Brazil recorded its hottest year ever in 2024, which included severe droughts and wildfires that slashed yields. The country’s National Supply Company (CONAB) adjusted its 2024/25 harvest estimate downward by 6.8%, and an intense cold front in August further damaged arabica-producing areas. These supply constraints have fuelled a bullish market.

Beyond production woes, logistical bottlenecks and geopolitical disruptions have exacerbated cost pressures. Supply chain instability, freight price spikes, and ongoing post-pandemic distribution challenges have made it increasingly expensive to move coffee to market. 

Additionally, heightened global trade tensions – particularly tariff escalations from the Trump administration – have introduced further unpredictability, impacting exporters and importers alike.

The increased costs aren’t limited to logistics alone. Coffee processors and exporters are also facing price hikes in essential production inputs, including fertilisers, pesticides, and packaging materials. The ripple effect of these expenses ultimately influences retail coffee prices, making it harder for smallholder producers to compete with large-scale operations that benefit from economies of scale.

“The transmission of higher coffee prices to producers varies depending on the region and coffee variety. According to data, for example, we can observe a trend of price transmission to producers in Brazil and India,” says Vanusia Nogueira, the executive director of the International Coffee Organisation. “The challenges that remain are the increase in production costs (such as fertilisers, labour, transport), intermediaries, climate, and productivity risks that may limit the benefit of higher prices.”

The illusion of higher prices benefiting coffee producers

Although the rise in coffee futures suggests higher profits for producers, farmgate prices – the actual amount producers receive for their coffee – often tell a different story. The traditional coffee supply chain is complex, involving multiple intermediaries that capture a significant share of the value. Many producers remain financially strained despite record-breaking C prices.

“High tariffs, market concentration, and long supply chains can limit producers’ share of the prices paid, while transparent pricing, direct trade, and strong farmer organisations help ensure fairer distribution,” Vanusia says. “Exchange rate fluctuations and speculation also impact farmgate prices.”

One critical issue affecting farmgate prices is the lack of transparency in pricing mechanisms. Price increases are rarely reflected in producers’ payments, particularly in regions where cooperatives or local buyers dictate pricing. 

Moreover, price distribution can vary significantly across different markets. 

“Farmers in Guatemala, Honduras, and El Salvador, for instance, have seen farmgate prices rise roughly in line with ICE futures – between 70% and 85% – over the last year,” says Paul Stewart, the Global Coffee Director at TechnoServe, a non-profit that develops business solutions to help alleviate poverty. 

“However, in Ethiopia, farmgate prices have actually declined year-over-year, despite record-breaking global prices,” he adds. “Production costs have also risen significantly, particularly in Central America, where harvesting and processing costs have increased by up to 40%.”

Pre-financing also poses issues for producers. Similar to the position that many importers and roasters are finding themselves in, exporters are increasingly unable to access the funds they need to purchase large volumes of coffee at the new, higher prices.

“In countries like Nicaragua, farmers have only seen farmgate prices rise by 39% year-over-year due to a lack of liquidity in the market. Buyers there simply don’t have the capital to offer competitive prices,” Paul continues. “In contrast, in Honduras, grouping smallholder farmers together allowed them to sign direct sales agreements with exporters, leading to better prices and access to fairer financing.”

Why direct trade isn’t a straightforward solution

A cornerstone of specialty coffee since its inception, direct trade is often touted as the solution to paying producers higher prices for coffee. 

Unlike conventional sourcing models that involve numerous middlemen, direct trade, in theory, facilitates stronger financial transparency between roasters and producers, ensuring a larger share of revenue reaches the latter.

In practice, however, direct trade can quickly become a vague premise with no universally agreed-upon definition, reduced to a marketing buzzword with little intention behind it.

When done right, direct trade should be a strategic business approach for roasters to engage more closely with their suppliers, helping to manage cash flow and ensuring producers are paid a premium for quality coffee. 

That being said, there are still logistical hurdles to direct trade that don’t necessarily equate to more money shared across the supply chain.

“What surprises people who endeavour to trade directly is that it isn’t always cheaper and it’s almost always harder than buying single origin coffee that’s been greenwashed and stamped ‘A-OK’ by someone other than the producer,” says Steven Thomas, business owner at Traffic USA and Lucatelli Coffee, two companies which oversee logistics and supply for US roasters with monthly production capacities ranging from 120kg to 120,000kg. 

Direct trade often involves more effort and a higher price point compared to traditional models, which can deter potential buyers.

How market volatility undermines producer gains

Another overlooked reality is the market volatility that accompanies price hikes. Although there’s evidence to suggest producer income has improved over the past two to three years, market instability has made it difficult for farmers to fully benefit. 

“The income of producers has improved over the past 24 to 36 months, but that hardly makes up for the decades prior when they were being grossly underpaid,” Steven says. “What mitigates the benefits of increasing prices is the concurrent increase in market volatility. Producers want stability because it’s the thing they have the least, and it’s the thing they need the most.

“Market volatility, compounded by climate and geopolitical instability, makes rising prices less beneficial for growers.”

Volatility also affects long-term investment in sustainable farming practices. Many smallholder farmers struggle to plan for the future due to price fluctuations, which makes it difficult for them to invest in quality improvements, soil health, and climate resilience initiatives. 

Despite record-high prices, the financial benefits remain concentrated primarily at the roaster and retail levels. Traders, exporters, and coffee shops continue to capture the majority of profits, despite their margins decreasing in recent years.

Paul emphasises that improving transparency and efficiency in supply chains could increase the share of the price that farmers receive. 

“In well-developed coffee sectors like Brazil or Vietnam, farmers receive 90-95% of the export price. Elsewhere, that figure can be as low as 60%,” he says. “Making supply chains more transparent and efficient is key to ensuring fairer distribution.”

Elevated C prices alone can’t solve systemic issues in coffee production. Addressing these challenges requires a multi-pronged approach, including more equitable trade models, improved infrastructure, and financial stability mechanisms for farmers. 

Paul highlights the importance of policy interventions, citing Honduras’ VAT exemptions on agricultural inputs and Peru’s concessional loan programme as examples of initiatives that help smallholders invest in farm productivity.

“Clear national coffee plans that include, for example, living income and prosperity roadmaps, in addition to firm commitments from the government and private sector, help stakeholders work together towards a similar objective and secure the necessary funds to implement the right initiatives to help farming communities in their journey towards prosperity,” Vanusia says. “The specific policies will vary from country to country, but by building national coffee plans that have the public and private sector support, the chances of success increase.  

“Supporting these initiatives at the international level will help countries to design and implement programmes that will work for them, according to the reality of those respective countries,” she adds. “Our Task Force is an effective space for dialogue for both public and private sectors globally, while bringing that dialogue to action to the local level in coffee-producing countries.”

The narrative that higher prices mean higher profits for coffee producers is not universally true, and is far more complex than it appears. 

Without structural changes, even record-breaking prices will leave the majority of farmers, especially smallholders, struggling to sustain their livelihoods.

Enjoyed this? Then read our article on why producers are choosing to diversify their crops.

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The C price has been rising over the past few years, reaching record highs in the past four months and signalling a momentous shift in the industry that many consider long overdue. Since 1990, the price of coffee on the commodities market has only exceeded US $2/lb for around 48 individual months in total; roughly half of these have been in the last four years.

Although they seem lucrative, these high prices are causing many exporters and producers to move with extra caution. Current market volatility means that, should an exporter commit to future sales at fixed prices, they expose themselves to financial and sourcing risks down the line.

I spoke with Andrea Brito Núñez at Osito Coffee and Cacao, Thiago Cazarini at Cazarini Trading Company, and Thomas Pingen at Red Beetle Coffee Lab to learn more.

You may also like our article on how high coffee prices could go.

A “new normal” for coffee prices

In February 2025, coffee prices rose to their highest levels since the mid-1970s, ushering in a new era for the industry.

Climate-driven supply shortages are the primary driver of this price surge. Industry leaders have long sounded the alarm that global warming could lead to more of the world’s coffee-growing land becoming unproductive by mid-century. With more instances of El Niño and La Niña (complex weather patterns resulting from variations in ocean temperatures) occurring, harvests in Brazil and Vietnam – the world’s biggest coffee growers – have dwindled over the past few years.

Coupled with logistics problems – including the Red Sea Crisis, falling water levels in the Panama Canal, and global container shortages – it has become increasingly difficult to make sure enough coffee reaches its destination on time.

As a result, stockpiles of coffee around the world, especially ICE-certified coffees, have reached all-time lows. With many roasters running out of options for where and how to source their green coffee, there has been little option but to accept the prices offered, regardless of how high they are. 

This demonstrates a fundamental shift in the dynamics of coffee trading. Demand is significantly outstripping supply and growth expectations for the industry, and there’s little anticipation that prices will fall significantly anytime soon.

“I definitely think the new higher prices are here to stay and, most of all, represent that a new ceiling has been reached,” says Andrea Brito Núñez, the North American Sales Manager at importer and exporter Osito Coffee and Cacao.

These new prices are at least a balm for producers who have been forced to accept low pricing for over three decades. However, the idea that many producers are now in a wholly better position is not universally true.

Some coffee growers have seen smaller harvests, meaning that the new prices may make up for some loss, but won’t cover it in full. Others are stuck in long-term contracts or arrangements with intermediaries that see them receiving only a fraction of the new prices. Some sold all their inventory long before the market rose, meaning that they missed out on higher prices altogether.

Exporters are navigating new challenges

On the surface, sustained high coffee prices appear to be gainful and profitable for exporters, but the reality is more complex.

“Many exporters are struggling with cash flow and producers haven’t been selling much coffee lately, which makes buying volatile,” says Thiago Cazarini, the owner of Cazarini Trading Company in Brazil. “To make money, you need money.”

Similar to the position that many importers and roasters are finding themselves in, exporters increasingly don’t have access to the funds they need to purchase coffee at the new higher prices. While they may be able to continue to do business, if their cash flow doesn’t increase proportionally to the rising costs of coffee, they can only purchase and re-sell a fraction of the volumes they were previously able to move.

“Access to credit and capital is tighter than in recent years because there is so much risk in moving coffee,” says Andrea. “There is a lot of uncertainty on a global scale.”

New volatility means that if an exporter commits to future sales at fixed prices, they expose themselves to rising costs and the inability to source coffee below the agreed price with the buyer. 

Normal methods to reduce risk, like hedging contracts, have become prohibitively expensive, with margin calls on contracts being the primary reason to avoid these practices. This is when the equity on an account (the total capital deposited, plus or minus any profits or losses) drops below the margin requirement, forcing brokers to sell some or all of the holdings to meet the minimum requirements. In some cases, this can lead to forced liquidation.

This issue is exacerbated in places where pre-financing is required. Thomas Pingen, the founder of Red Beetle Coffee Lab in Mexico, tells me that many Oaxacan producers, for instance, are not part of a cooperative and have no access to banking or credit. In turn, they require pre-financing, but these costs are now far higher for exporters, further reducing the volumes they can purchase.

Market uncertainty persists

With coffee prices unlikely to fall significantly in the coming months, exporters are moving with noticeable trepidation. There’s a sense that buying coffee now could mean making the wrong decision down the line, while a pervading fear of misjudging the market is leading some traders to simply not act at all. 

Another key factor that is shaping the current market is coffee producers cancelling contracts with exporters at the last minute, also known as strategic defaulting. 

“Defaulting hasn’t been widespread, but there have been a lot more occurrences,” Thiago says. Although it may lead to short-term gains, defaulting often damages relationships with traders and roasters, which can eventually lead to blacklisting.

Instead of selling to exporters for international shipping destinations, the local market is proving more attractive for many coffee farmers. 

“Local prices are very high in many countries at the moment, and this is a huge incentive for selling locally,” Andrea explains. “It’s faster in many ways, less expensive, and logistically less complicated.”

Naturally, this is reshaping roaster buying behaviour in a number of producing countries. 

“There is a very strong domestic demand in Mexico,” Thomas says. “Mexican roasters usually import coffees from Vietnam and Brazil, but the prices for those origins are now very high, so they prefer to work with local producers, further driving up prices.”

In other cases, producers choose simply not to sell but to hold their coffee as a form of savings. After the C price rose to over US $4.40/lb in mid-February, some farmers believe that if they hold out, they may be able to secure a similar or even better price down the road.

Impacts across the supply chain

The pressure on roasters and traders alike has never been greater, and as a result, all industry actors are choosing strategies that may be unfamiliar, and therefore more risky, to them. Some buyers are opting to live “hand to mouth” – purchasing only what they need for a short period of time, such as a few weeks or a couple of months, in the hope that when they next need to purchase coffee, the prices will have dropped. 

Other traders and roasters are choosing to purchase as much coffee as possible now, fearing that the C price may go even higher in the coming months, and using complex commodity trades such as “backwardation” to secure lower pricing.

With large exporters like Cafebras and Atlantica recently filing for bankruptcy, many are asking if market uncertainty is posing an existential crisis for traders and roasters alike.

Likely, the key to weathering this storm will be strong relationships, trust, and respect in the supply chain. Where exporters and roasters know their partners personally, they are less likely to face unexpected defaulting on contracts or unreasonable demands for price hikes.

In certain instances, producers who can afford to will honour prices agreed before the market spike, recognising that the long-term benefits of a regular purchaser, who values their work in both “good” and “bad” years, are greater than a single year with higher profit margins. 

Roasters who have strong direct trade partnerships with traders or farmers are also more likely to get the offers they hope for. Buying from a number of different partners without cultivating mutually beneficial relationships may leave roasters more exposed than before. 

The same agility and dynamism in purchasing that may help a roaster navigate higher prices for the next three to six months, searching around for the best deal, could ultimately undermine longer-term security in the supply of coffee.

The wave of consolidation impacting the green coffee trading sector is a signal that further challenges are to come.

Regardless of how exporter, importers, or roasters choose to work in this new era for coffee, it’s likely that we will all have to come to terms with a world where higher, and therefore fairer, prices are the “new normal”.

Enjoyed this? Then read our article on why record coffee futures doesn’t necessarily mean producers are “price makers”.

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This trend is not just a passing phase but a structural change in the coffee trade. As roasters, traders, and producers adapt, there is a growing emphasis on efficiency, collaboration, and sustainability.

At the heart of this structural shift is a simple yet powerful concept: relationships. While price volatility presents challenges, it also facilitates deeper connections across the supply chain.

I spoke to several people at DRWakefield to understand how meaningful partnerships can create resilience in times of market upheaval.

You may also like our article on how roasters are managing cash flow with higher coffee prices.

Market volatility has become persistent

Sustained high coffee prices are creating a perfect storm of interconnected crises in the industry that show little sign of abating.

Climate-related issues are a major contributing factor to the sharp spike in the C price, which has more than doubled over the last 12 months. Unpredictable weather patterns are triggering severe, prolonged droughts in Brazil and excessive rainfall in Colombia and Vietnam. Compounded by historically low global stockpiles, production disruptions in major producing countries have resulted in outsized price hikes.

Meanwhile, commodity brokers and speculative investors, sensing opportunity in this scarcity, have increasingly bet on continued price appreciation, further accelerating market volatility.

US President Donald Trump’s recent global trade tariffs have exacerbated these issues, introducing additional complexity and costs to an already strained supply chain. Shortly after Trump announced universal import taxes, which included levies between 10% and 104% on imports from the majority of the world’s top 20 coffee-producing countries, coffee prices fell sharply. They have since risen to above US $4/lb – close to record levels that many in the industry believed they would never see.

For coffee supply chain actors, this geopolitical turbulence arrived at an inopportune moment. Coffee businesses simultaneously face unprecedented inflation across almost every operational expense, from increasing energy costs and logistics fees to rising labour expenses and packaging materials. Roasters and traders find themselves squeezed from multiple sides, trapped between resistant consumer price ceilings and a tide of escalating costs.

“This is where the challenge lies; importers, exporters, and producers need to adapt faster,” says Priscilla Daniel, a senior trader at DRWakefield, a specialty coffee importer established in 1970 that focuses on long-term relationships with producers in over 25 countries. 

“It’s not as much about where the market is in terms of the price level, but more about the increase in the market prices in such a short time,” Priscilla adds. “Nobody has had much time to adapt.”

Shifting industry dynamics

Market uncertainty has created a fundamental shift in trade dynamics, altering the power balance within the coffee industry and creating tensions where previously established patterns existed. Roasters, who historically thrived during periods of low C prices by securing more comfortable margins, now find themselves in unfamiliar territory. Their cash flows have become increasingly constrained as capital requirements for purchasing green coffee have soared in recent years. 

Many businesses built on models that assumed specific price ranges are now questioning their sustainability, forcing difficult decisions about pricing and sourcing strategies.

“The export of coffee needs to be financed; therefore, the exporter must have the funds in advance to purchase the coffee from the producer,” says Hannah Wakefield, a trader at DRWakefield. “When coffee has, in some cases, more or less doubled in value, getting the money to buy it becomes a problem.”

Meanwhile, producers have experienced an equally disorienting role reversal. After generations of being “price takers” with minimal leverage, many farmers now find themselves in the position of “price makers” with newfound negotiating power. Yet this apparent advantage comes with its own complexities. The higher prices don’t necessarily translate to proportionally higher profits, as producers also face escalating costs for fertilisers, labour, and transportation.

Additionally, working relationships that have developed over time now face their most significant test as all parties navigate this new financial landscape, where traditional power dynamics and expectations have been upended.

Specialty coffee’s emphasis on direct trade, transparency, and mutual respect has created a foundation that, while strained by current conditions, offers the best path forward through this turbulent period.

Strengthening relationships across the value chain

In the climate of sustained uncertainty, building trust across the supply chain has evolved from a competitive advantage to an essential survival strategy. With coffee prices not expected to retreat until late 2025 – and the ripple effects likely to be felt for at least four years, according to recent UN forecasts – short-term thinking and opportunistic working relationships can’t weather the storm.

The most resilient businesses will be those that prioritise transparency, consistent communication, and shared risk management. When both sides understand each other’s challenges and constraints, they can develop creative solutions that preserve business viability while maintaining quality and sustainability commitments. These trusted partnerships create stability in an otherwise volatile market, enabling long-term planning despite short-term fluctuations.

“There is a lot of risk involved in specialty coffee. For instance, some producers were selling their coffee before record-high prices, at about US $3/lb, and many didn’t think it would climb higher, so they set contracts at that price,” says Priscilla. “Now, even when prices go up, they won’t receive them because of these constraints.

“People can try to predict if the market will go up at a certain point, but it can also go down at any time; it’s so volatile. This highlights the importance of relationships and trust,” she adds. “They’re both essential to balance quality. Producers know that if they stop producing coffee at the level of quality we have been buying from them for years, it would be difficult to re-market it. It’s about the value of the relationships that we have with producer partners.”

Importers like DRWakefield embody this relationship-centred approach. The company’s global network spans more than 25 origins, underscoring its ability to cultivate partnerships with a wide range of producers, co-operatives, and exporters, and understand their specific needs.

“Direct trade has a different meaning for us. Instead of going straight to the producer and undertaking the risks that can arise, we mitigate and manage the risks when someone has a relationship with us,” says Hannah. “If there is a situation when a buyer feels the quality isn’t as expected or they don’t want that specific coffee this year, for example, we still buy the coffee from the producer.”

This level of commitment and two-way communication ensures that trust is maintained throughout the supply chain, translating concerns and constraints in both directions and facilitating solutions that work for all parties.

During periods of such volatility, this is especially important, as Hannah explains: “We continue that income for the producer and invest in our relationship with them. We find a market for the coffee with another buyer or roaster.

“It gives a degree of security to everyone involved, ensuring that our suppliers still have that income vital for their sustainability.”

Forging a path forward together

For the global coffee industry to withstand periods of uncertainty, all stakeholders must embrace new models of collaboration that prioritise information sharing and joint problem-solving. Producers need to provide greater visibility into their production challenges and cost structures, while roasters must be more transparent about their margin constraints and market realities. 

With more than five decades of experience, DRWakefield brings a historical perspective on navigating current challenging conditions, solidifying the value of relationship-based trading through multiple market cycles and periods of instability. The company became the first independent coffee importer to gain a Fairtrade licence in 1993.

“We try to connect producers and roasters together through origin trips, cuppings, and events,” says Hriday Gupta, the marketing manager at DRWakefield. “We also share information with customers and producers through our project and trip reports, weekly market reports, and other such articles.”

The importer celebrated its 20-year partnership with Daterra in Brazil last year, for example, highlighting how a shared commitment to innovation and sustainability can drive quality improvements year after year, particularly in navigating the challenges of climate variability and environmental stewardship.

One of their most recent joint projects studied how colour impacts coffee processing and fermentation, coining the term “Solar Spectrum Fermentation”.

Similarly, the nearly two-decade partnership with Coope Dota in Costa Rica illustrates how sustained engagement has supported the cooperative’s evolution as a quality-focused and environmentally conscious organisation that is now recognised globally as the world’s first carbon-neutral coffee cooperative.

As it navigates these unprecedented market conditions, the coffee industry stands at a crossroads. While market volatility may eventually subside, the current challenges reveal a fundamental truth: it’s the strength of connections that will determine collective resilience. 

By prioritising transparency, consistent communication, and shared value creation, producers, roasters, and traders can emerge from this period with a supply chain that is not just more equitable but ultimately more stable and capable of weathering future challenges.

Enjoyed this? Then read our article on why high coffee prices don’t automatically put producers in a better position.

Photo credits: DRWakefield

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In its early years, direct trade was considered a form of social responsibility. Roasters commit to paying higher prices for higher-quality coffee, supporting producers and communities in their efforts to reinvest in production. Over time, this builds trust and fosters a reciprocal working relationship.

Despite these good intentions, the direct trade model gradually became a superficial marketing strategy for some roasters. It provided consumers with the vague assurance that the coffee was ethically sourced but with little accountability.

Recently, record arabica futures have pushed more roasters to adopt direct trade practices, positioning them as a risk mitigation strategy. By having more control over their supply chains, roasters can manage costs more effectively.

Still, the social and ethical aspects of direct trade play a fundamental role in shaping specialty coffee, and they always will. I spoke to Coffee Circle’s Martin Elwert and Co Qua Lab’s Ansha Yassin and Moata Raya to find out why direct trade is about more than good business practices.

You may also like our article on what will change for roasters in 2025.

Direct trade has always been a part of specialty coffee

The coffee supply chain is long, meaning coffee passes through many hands as it moves from producer to consumer. Some estimates indicate that depending on origin and farm size, there can be as many as 20 intermediaries in the value chain.

Inevitably, the more intermediaries there are, the lower the prices will be for farmers. According to the International Trade Centre, many producers receive 10% of the total retail price of coffee, equating to approximately US 40 cents per cup.

For the 12.5 million smallholder farming families in the world, who grow up to 80% of the global coffee supply, these prices don’t allow them to cover the costs of production. Additionally, they keep communities below the poverty line, which forces them to turn away from coffee farming altogether.

Third wave and specialty coffee set out to change these market dynamics and secure a sustainable future for the industry. By trimming down supply chains and removing “unnecessary” intermediaries, producers can retain more value.

“As the name implies, direct trade is without the involvement of middlemen, leading to a shorter supply chain where the shipment of coffee goes directly to the buyer,” says Ansha Yassin, the managing director and senior consultant at Co Qua Lab in Ethiopia. The organisation works as an advisor to Coffee Circle, a B Corp-certified specialty coffee roaster in Berlin, Germany. 

“Producers can negotiate prices, and buyers can easily trace the product. It fosters trust-based, long-term relationships for mutual benefit and allows producers to communicate with buyers without barriers, ensuring sustainable product quality year after year.”

Demand grows

When implemented in the late 1990s and early 2000s, the benefits of direct trade quickly became apparent.

Under this model, producers receive several times more than they usually would, earning a living wage that covers the costs of production and supports their livelihoods. They also avoid being hit by hidden fees, such as processing and transport, further minimising the high levels of risk they often deal with.

For roasters, it opens up new possibilities to connect with the people who grow coffee. They can exchange knowledge and ideas about processing, flavour profiles, cup scores, roast development, and changing market demand.

“When we talk about direct trade at Coffee Circle, we mean building a personal relationship between producers and roasters. This includes mutual respect and understanding of social and economic circumstances and challenges,” says Martin Elwert, the roaster’s CEO and founder. 

“It means relationship on an eye-level, paying sustainable prices, and building trustful business partnerships over years.”

Consumers have also been pushing for better transparency and visibility across the coffee value chain. Roasters can leverage direct trade practices to demonstrate their close relationships with origin, building consumer trust and strengthening their knowledge of the supply chain. This, in theory, increases consumer appreciation of coffee and leads to less resistance to paying higher prices.

But its role in the industry has changed

Since its inception, direct trade has shaped roasters’ sourcing practices and bridged the gap between producers and consumers. Many celebrate this model for these reasons, emphasising how it promotes the positive aspects of the industry.

It’s reductive, however, to claim that direct trade practices aren’t problematic. The term has no formal definition or certification, meaning roasters don’t have to substantiate claims. This makes it challenging for consumers to understand what they truly entail, blurring the lines between a marketing gimmick and a signpost of genuine impact.

“Direct trade is not a clearly defined and protected term, so anyone can use it in their marketing claims,” Martin says. “But industry stakeholders have learned a lot in the past 20 years, and the longer you work in specialty coffee, the better you understand who truly cares and who is riding the trend.”

More recently, following an unprecedented high of US $4.30/lb in the arabica market, the direct trade model has emerged as a strategic sourcing approach. Bypassing traditional intermediaries and operating outside of the C market means producers can set their own prices. Roasters, meanwhile, have a closer eye on their entire supply chains, allowing them to manage partnerships more effectively.

“We believe that taking care of internal and external stakeholders, employees, customers, producers, and partners of any kind, is good business,” Martin tells me. “It’s obviously not a silver bullet; doing things the right way over a long period of time is hard work.

“Choosing the right direct trade partners means making decisions for the long-term, which means taking risks. However, if you manage to build trustful relationships, you can avoid short-term price, environmental, and long-term economic risk,” he adds. “If you approach partnerships with empathy, optimism, and strategic thinking, then it pays off for all parties.”

Serving a dual purpose

Direct trade is no longer just a social responsibility project. It has become a strategic business initiative that gives producers and roasters more control and oversight over their supply chains.

“If you manage to build strong direct trade relationships, you can reduce your market risks,” Martin tells me. “You can find partners who understand and respect your situation and challenges. Still, it requires investment from both sides; this is how equal relationships work.”

For a sustainable and equitable future for the coffee industry, it is increasingly vital that farmers have the financial capacity to invest in production. Recent research shows that rising global temperatures decrease yields, exacerbating volatile coffee prices and threatening production as we know it.

However, this is far from what happens in reality. Despite laws and regulations in place, producers are rarely able to invest in their farms, including replanting old trees and switching to regenerative agricultural practices.

“Depending on the country, some cooperative bylaws often state that 70% of the net profits are paid back to members based on their share and the volume of cherries they deliver, with an additional 5% allocated for community development,” Ansha explains.

But given the rising number of challenges that producers are facing, this often isn’t enough.

Coffee Circle operates the Coffee Circle Foundation e.V. which is an integral part of its business model. For every kilogram of coffee sold, the roaster invests €1 in access to clean drinking water, education, and agricultural training in coffee-producing regions. Since 2010, Coffee Circle has invested €5 million across 19 projects in coffee-growing communities.

“These projects, including WASH (water, sanitation, and hygiene) stations and wet mills, have a direct impact on the social, health, education, and economic wellness of farming communities,” Ansha says.

Why direct trade needs to stay true to its values

The traditional coffee supply chain was designed to benefit intermediaries the most. Even with a record C price, producers still aren’t receiving enough money to invest in their farms and improve their livelihoods.

Moreover, many smallholder farmers are often not aware of the market value of their coffees. As a result, they receive low prices, pushing them further away from coffee production towards planting crops like avocados, which have higher returns on investment.

“Coffee Circle started in 2010 with the vision to reduce poverty in rural populations in Ethiopia. We invest €1/kg of coffee sold in projects at origin, channelling the funds through our foundation,” Martin says. “We analysed the needs of the communities we work with. There was no guaranteed access to clean water – a basic human right. The schools were minimally equipped, resulting in little motivation for teachers and poor attendance of local children.

“Education is a key driver for change, so we created our first Value Chain project, which organised cooperatives, built ten washing stations (including depulpers, fermentation tanks, and drying beds), conducted training, supported marketing activities, and distributed 180,000 seedlings,” he adds. 

This underscores how the original mission and values of direct trade are still key to this day. Although the model has become a solid business practice, allowing roasters to understand precisely where their money is going, the social responsibility factors create a more resilient supply chain.

“Local communities have experienced significant positive changes through these projects, resulting in better infrastructure and improved quality of life,” says Moata Raya, the director of coffee and senior consultant at Co Qua Lab in Ethiopia. “Direct trade encourages hard work, culture, and traditions of the producers and their communities. Moreover, higher profit margins go to the producers, which benefits the community at large.”

Supporting communities means investing in coffee production

Looking ahead, rather than being viewed as a charitable endeavour or superficial marketing strategy, direct trade will become a solid business model that encourages accountability, shared value creation, and investment in the future of the coffee industry.

“Without direct trade relationships, roasters can’t fully understand the situation and challenges of coffee farmers and their communities. If you want to contribute to positive change, you need to be present and build relationships,” Martin says. 

“In turn, you develop a commitment to reliable quality over the years. You can also jointly invest in measures to increase quality and secure volume. Through a feedback loop, you can discuss special fermentations, explain your customers’ demands, and talk about your challenges as a business.”

Ultimately, this means meeting and supporting the needs of coffee-growing communities.

“In the Democratic Republic of Congo, Coffee Circle invests in sustainable growing practices and processing techniques to generate sustainable living income,” Martin tells me. “We have helped renovate washing stations and drying beds and provide training on agronomy topics such as pruning, making organic compost, and implementing intercropping.

“We also established a cupping lab, allowing producers to analyse their coffee quality, which they couldn’t do beforehand,” he adds. “In 2024, in partnership with Vuna Origin Consulting, the Coffee Circle Vision Fund set up a €500,000 grant to support six projects driving social change and sustainability in coffee communities worldwide.”

While direct trade initially emerged, it was intended as a means to connect with producers and roasters. Today, however, producers are increasingly seeking out roasters to build relationships, turning the tide to create a more equitable supply chain. 

“Different actors along the value chain have such little knowledge of the step before them, but there is so much to learn from each other,” Martin concludes. “The more we know from seed to cup, the better we can overcome challenges.”

Enjoyed this? Then read our article on why market volatility means roasters need to be strategic with prices.

Photo credits: Coffee Circle

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