Is Specialty Coffee a Commodity? (Solved & Explained!)

Specialty coffee is part of the commodities market but it is not commodity coffee. Commodity coffee is the kind that sells in huge amounts of bulk to appear in places like supermarkets. Specialty coffee, on the other hand, comes from high quality beans, sold in smaller batches and comes at a high price.

All coffee comes under the banner of a “commodity” because of its worldwide consumption. However, when looking at commodity versus specialty coffee, there is a huge difference. For one, specialty coffee has a higher rating than commodity.

What Classifies Commodity Coffee?

All coffee falls under the classification of “commodity” in the same way as oil, gold and wheat. There is a fixed price for it that can fluctuate when affected by certain factors. In regards to coffee, weather and war are two such determiners that can increase the standard price for coffee. The actual quality and taste of the coffee does not affect the price at which it sells.

This also means the farmers will receive the same price for their coffee regardless of production or quality. What compounds this is the fact that commodity prices will always be well below production costs. This makes it difficult for farmers to earn a profit.

Commodity coffee sells in huge lots to mass producers who transform into instant coffee, like Nescafé, or general supermarket coffee, such as Folgers. It’s not often you know where the coffee comes from because these are beans that come from several regions and farms which blend together prior to bulk sale.

What Classifies Specialty Coffee?

Specialty coffee usually comes from smallholder farms, which people handpick and process. The taste, quality and cost of production will affect the price. Plus, individual and independent roasters will determine own price for sale to the public after their treating, roasting and packaging the beans.

Since 1978, such coffee refers to beans that come from microclimates with distinct and unique flavor profiles. Specialty coffees rank high on a standard scale of quality, such as the one presented by the Specialty Coffee Association of America (SCAA).

Scoring Standards

Many countries and non-governmental organizations (NGOs) have varying degrees of scoring and ranking. But, in regards to the SCAA, these will come somewhere between 80 and 100 out of 100 possible.

Roaster Relationships with Farms

Roasters often develop networking relationships with these smallholder farms along with washing stations and other cooperatives. They buy green coffee beans directly from farmers or from companies that specialize in its sale. Either way, the farmers receive a profit that’s almost always above the standard commodity price.

How Does the SCAA Quantify Their Scoring for Specialty Coffee?

Over the last several decades, the SCAA has developed a refined standard of scoring for specialty coffee. However, there are many standards for grading depending on the country and region you’re in. But, the SCAA has worked endlessly to encompass all aspects of the bean, from farm to cup, in the total rating.

This includes size, processing methods, roasting and brewing. Because consumers value all of these, they’ve developed an intricate system for tracing the coffee from its origin farm through its entire chain of custody.

This means you can account for each bean from the farmers’ hands, to processing plants to importer and finally the roaster. All of which catalog their handling of the beans along with the practices they use to preserve quality. Therefore, the SCAA bases their scoring status on how green beans pass their rigorous inspection standards.

What Constitutes a Defect in Green Coffee Beans?

There is an entire host of defects affecting what kind of score a green bean receives. So, there’s actually a divided list of primary and secondary defects that go into determining quality.

No More than Five Defects

They must be a consistent size and shape along with having no more than five other additional defects. Even if they share the same defects, they cannot have any more than five.

These defects can come from someone’s mishandling in the chain of custody, which means that the score can change as it makes its way through to the roaster. Other things that can affect the scoring are stones and foreign matter, black beans or ones that come cracked or broken.

Types of Defects

Black beans suggest disease during growing or not thoroughly drying the beans out before sale. Broken or cracked beans indicate careless treatment and handling during processing. All of these are incredibly undesirable qualities and make the roaster’s job more difficult. This means they have to sift through the beans before they can prepare them for roasting.

Quality Standards Go Back to Farmers

While standards for quality are still under development, what’s available does offer a helpful guideline to understand what kinds of beans you have. Certifying coffee in this way means the money and recognition will go back into the hands of the farmer from where the bean came.

What Does Fair Trade Coffee Mean in the Commodities Market?

Fair trade coffee is a premium roasters and commercial manufacturers pay on top of the standard commodity price of bulk coffee. This can include specialty coffee, but it doesn’t have to.

While the intention of this fee helps offset the lower commodity price, it is not often that it goes back to the community for reinvestment. The coffee’s quality doesn’t affect this premium price either.

What Does Gourmet and Premium Coffee Mean in the Commodities Market?

When you see coffee labeled “gourmet” or “premium,” these are marketing ploys and do not fall under any special classification of coffee in the realm of commodities. There are no industry standards for these classifications and it’s just something producers put on their packaging to get people to buy it.

This is usually just commodity coffee and is often not anything related to specialty. While there are no laws or regulations defining what specialty coffee is, it does have a certain standardized quality roasters and consumers can rely on.