Our sustainability commitment revolves around Price, Quality & Relationships.
Sourcing quality coffee is Mercanta’s top Priority. Unlike many importers, Mercanta only specialises in sourcing and selling speciality coffee; meaning our primary focus as coffee hunters is to locate only the best coffees from across the planet.
This is achieved firstly by our team of experienced coffee hunters, who, along with our network of partners in
producing countries, locate and sample the top lots from producers in over 20 nations.
Next, quality is tested at our state of the art cupping and quality control labs, located in; London, Glasgow,
Singapore, Seattle and Guatemala City (soon to be Berlin). Here, our experienced team of cuppers and lab staff regularly cup and analyse samples at each stage of the product cycle.
Quality in the cup must also be met by quality of life for coffee farmers and our employees. To ensure this is met, our commitment to adequate compensation and fair treatment is met by our Price and by our Traceability Commitments.
True sustainability requires understanding fine coffee not as a generic commodity but, rather, as a unique product with distinctive flavours, varieties, profiles and personality. Prices for farmers must be linked to the quality of the coffee they produce.
Furthermore, investment in education for roasters, baristas, producers and consumers is one of our main priorities. Our mission, and the key to long-term sustainability, is to show people just how outstanding and diverse coffee can be!
We believe that buying quality coffee for fair prices, negotiated directly with the producer, makes good business sense. We have drawn a line in the sand which not many have dared to do. All our business is done on a fixed minimum price, above the cost of production.
Mercanta has long sought to de-commoditise the coffee business. Before this subject was even relevant, we had set a minimum FOB Origin price of $1.80/lb for Arabica coffee: below which, we will never purchase coffee. We do not trade coffee on contracts connected to the New York C commodity market. These sorts of contracts distort the relationship between supply and demand and contribute to volatility. Above all, they have absolutely nothing to do with the actual cost of producing coffee. The only way to guarantee a fair and sustainable outright final contract price is to only buy at outright prices; this is how Mercanta conducts its business with its partners and suppliers.
Further, while we never pay below $1.80/lb FOB for Arabica origin purchases, we also track prices globally for all our purchases year-on-year. Our global average purchase price actually ranges annually between $2.25 and $2.50/lb and is currently easily double the current commodity price for coffee, as of 2019.
Our $1.80/lb minimum price is a simple formula. By discussing with our partners at origin and tracking costs year on year, we have calculated the average cost of production to be $1.50/lb. Many producers would produce coffee at less than this cost, and some would be more. To mitigate this, we simply add 20% to cover the higher cost of production countries: simple, understandable, and traceable. On fewer instances where the farm’s cost of production exceeds $1.50/lb, we make that adjustment accordingly and in discussion with the producer.
Unfortunately, Mercanta still does not have all the answers. Having operated for close to 25 years in the speciality coffee industry, to still be talking about the plague of low, unsustainable prices, despite the boom in worldwide interest in coffee and the emergence of a distinct and growing speciality coffee sector, can be disappointing. At times like this, we feel the Mercanta Minimum Origin Purchase Price commitment is more important than ever, as a genuine and tangible commitment to do our part in difficult times, and hopefully an example of one way to address the reality of unsustainable coffee prices.
Please take a look at our Sourcing Model article for further details.
Relationships are crucial to sourcing high-quality coffee. We pay premium prices, and we treat our producers as long-term business partners. With some notable exceptions (such as Ethiopia, where the coffee sector is structured so as to reduce or eliminate traceability), we aim for 100% traceability for all our coffees. If we do not know the producer directly, we make sure that our exporting partner does and is able to supply adequate information on the producer, the farm and the coffee, thus assuring us of that fact.
We are a ‘boots on the ground’ company. With sourcing offices in Medellin, Colombia and Guatemala City, Guatemala, we do not just engage with the local community – we are part of it. We also seek to visit all of the producers and exporters from whom we purchase and to develop long-term relationships with them.
We do not audit our suppliers. Rather, we develop conversations with them and visit them to ensure that we share the same values: worker welfare, living wages, education, and care for the environment. We will cease to work with any supplier that we feel does not share these values, and we reassess and renew our commitments with producers frequently to make sure we are still ‘on the same page’. Auditing producers according to a set of arbitrary criteria (that may not be applicable in their case) runs a risk of reducing sustainability to a paper trail ‘box ticking’ activity. We seek a deeper engagement and a relationship of mutual support and respect.
Mercanta also builds lasting relationships with our customers, large and small. Every roaster is different, and we work to understand our customers’ individual green coffee needs to make sure they have the information they need to make buying decisions, roast and market their coffee. With our customers, we periodically invest directly in social welfare and quality improvement projects at origin.