Q&A: What determines the price of coffee beans and ground coffee?

Question by mmo: What determines the price of coffee beans and ground coffee?
I just want to know why are some coffee brands more expensive than the other?

Best answer:

Answer by Amanda
More things go into the price of coffee than I can list.

1. Cost of production – it costs money to fertilize, prune, and generally take care of coffee trees, let alone the costs of harvesting the coffee and processing it until it’s stable enough to send to market. These costs alone are about US$ 1/lb, and that’s with coffee pickers paid less than sweatshop workers.

2. Cost of transportation – not as much as it used to be, but it’s tricky getting coffee from some mountainside finca over bad/nonexistent roads to a major port (which is probably in a climate that does coffee no good). Then the coffee exporter whom the coffee was sold to needs to get in touch with a coffee importer and send it off (each taking a cut of course).

3. Cost of roasting – green coffee does not make a very tasty beverage; it needs to be roasted first to turn it into the coffee we drink, which of course costs some for the fuel and some for the weight loss in roasting.

4. Cost of distribution – the now-fragile roasted coffee needs to be distributed to thousands of retail stores, each of which needs to mark up the coffee to keep the store in business.

And that’s without the costs of branding, advertising, corporate administration, and doubtless many other costs of which I am unaware.

To sum up:

1. Coffee bean prices are mostly determined by supply and demand; there’s an active coffee futures market that will tell you how much a pound of ordinary unroasted coffee goes for right now, with adjustments for high-average and low quality.

2. Ground coffee has a lot of other costs associated with it.

3. Some coffee brands take a higher markup; others just use better, more expensive coffee beans.

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