Jeremy Tooker, the owner of Four Barrel, watches as the Probat roaster turns the green coffee beans sourced from a small farm in Africa a deep mahogany brown, ready to sate Mission denizens willing to pay more than $15 for a pound of coffee.
While many cafe owners complain about the 83 percent increase in the price of unroasted coffee beans on the global market, Tooker is among an emerging group of “Third Wave” roasters who applaud it.
“Last year we had a contest to see who could pay the most per pound from a farmer,” Tooker said, grinning. “I won.”
Increasing coffee prices might not sound like a reason to celebrate. But during a recent trip to farms in Colombia, Tooker observed that one of their coffee producers was able to build a new house thanks to price increases. “We’ll pay the most for good coffee,” said Tooker, who would rather know that the farmers are receiving a fair price than deal with a middleman. Termed “coyotes,” middlemen often buy low from farmers and sell high.
Four Barrel is not alone in supporting higher-priced coffee if it means that farmers can make a livable wage. “I’d like to think this is all a positive trend. Perpetuating the $1.50 cup of coffee is propagating a system based on undervalued coffee and taking advantage of the difference in economies,” said Eileen Hassi, owner of Ritual Coffee Roasters.
In the long run, Hassi and Tooker feel that rising prices will also mean better coffee for the consumer. Both roasters said that farmers are paying closer attention to what conditions produce higher-priced yields. And San Francisco coffee drinkers are catching on. “What good coffee was in 1999 versus 2009 has changed drastically,” Hassi said. “All the places that have been established are improving their coffee programs.”
Ritual’s carefully curated selections in the $3-a-cup range are worth it to drinkers like Tosha Albor. “It’s not a problem if that’s the real price. It’s the same way that I don’t mind paying a bit more for produce if it’s sustainable,” she said.
Albor said she’s noticed that some farmers in her homeland, the Philippines, are doing a lot better. “Especially the ones with bigger contracts, like with Starbucks,” she said.
Hassi, who started Ritual Roaster in 2005, has seen how low prices were unsustainable for farmers, citing Costa Rica as a prime example. It is one of the more developed countries in terms of coffee trade, but 2011 was only the second time in the last 30 years when the market price was above the actual cost of production, Hassi said.
In other words, for the past 28 years, commodity-based coffee was only breaking even in Costa Rica. But partially thanks to the 2005-06 micromill revolution, farmers have started becoming more self-sufficient and are doing more of the processing themselves, she said.
“This year is interesting,” Hassi said. Now that prices have risen, “We continue to work with more and more family farms in Costa Rica. But when the commodity was low, it was easy to be really generous.”
In the last five years, the cafe and bakery Mission Pie has watched coffee prices rise about 20 percent — more than any other whole ingredient. As a result, the cafe raised the price of medium and large to-go cups by a quarter. “What’s important to us is having high-quality food that’s ethical and sustainably sourced at an affordable price,” said co-owner Krystin Rubin.
There’s “nothing unethical” in the price rise, she said. “It’s a precious ingredient, and we should treat it as it is.”
Not everyone agreed that the price increases trickle down to the farmers. Brad Butler, co-owner of Bicycle Coffee, who roasts in Oakland but has a Mission office, argued that higher prices have a marginal impact on the welfare of growers. While he credits fair trade and organic organizations with helping to create predictable price points and more favorable work conditions, he points to other parties, such as financial speculators who take advantage of the changing economics of coffee.
Butler said that it’s challenging to run a business where the main product (the green beans) is both the most expensive and most difficult to predict in calculating product costs. Bicycle Coffee has chosen to work harder to increase revenues with a smaller employee footprint, rather than raise its prices.
Elsewhere, prices per cup are going up.
Stable Cafe on Folsom Street has a steady flow of customers, even on a rainy Wednesday afternoon. About three weeks ago, owner Thomas Lackey had to make the difficult decision to raise coffee prices for the first time since opening in 2008.
Lackey said that their coffee supplier, De La Paz, is just trying to keep up with the market, and is not overcharging wholesale accounts. “I know what kind of car they drive,” Lackey said of the owners, who specialize in organic, fair-trade coffee.
Mission cafes Dynamo Donuts and Kafe 99 sqft have also raised prices, but customers didn’t seem to mind the 25-cent increase. “Most of the coffee drinkers are well aware of what’s happening,” said Sarah Spearin, owner of Dynamo Donuts on 24th Street. Jim Noh-Kuhn, warehouse manager at Philz, said, “We try to absorb the price increase ourselves instead of passing it on to the consumer.”
But at the end of last year, the rising bean costs pushed Philz to join the ranks of cafes raising their prices.
Tooker also reported that he has raised prices for espresso drinks by a quarter, but he hasn’t heard of any customer complaints. His business model uses a set profit margin per pound of coffee, and bean prices change according to the specific coffee source. While he nicknames the slow bar that offers single-origin pour-over coffee “the break-even bar” because of the extra labor involved with brewing a cup, he said that people who try the pricier coffee often buy a bag or two of beans to take home.
The majority of Tooker’s customers take advantage of the $2 cup of coffee rather than the slow bar’s pricier offerings, which, considering the constant line, is fine with Tooker. The French press $2 cup uses a varietal that rotates about every two weeks, and won’t increase in price.
Will other cafes continue to raise prices in order to keep up with the changing market? Roasters expressed frustration at trying to guess the future of fluctuating coffee prices. At least for the moment, Hassi admitted, “I may be more popular in Brazil than I am in the Mission District, because I pay a good price.”
Correction- The previous version of this article named Mission Pie as a non-profit. Mission Pie is a for-profit business that collaborates with neighborhood non-profits.