Coffee is traded on the futures market. When we started Happy Mug in 2010, the coffee market was reasonable, we built out a business plan, the numbers made sense, i put my life savings into buying a commercial coffee roaster, saved enough for my first pallet of coffee beans.
Six months later my coffee roaster arrived and the coffee market had soared to an all time high. that first pallet of coffee was unsustainable. I kept my full time job and sold coffee at a loss, because, hey, i love coffee, i love roasting coffee, i love sharing coffee with anyone who wants to experience amazing coffee. It was my hobby, but I definitely needed to keep my day job.
My job was an outside sales rep driving around. Several months into my coffee roasting experiment, I got fired for selling coffee out the back of my car along my route. It was okay. My coffee was really good. By that point the coffee futures market was about to come back down and by the time I needed the next pallet of coffee beans my business plan worked out after all. I haven't had to have a job since then other than filling your orders for fresh coffee. I've just been happily keeping up with my coffee roasting hobby and it's gotten a little out of control but it's all good.
In the past two years the coffee market soared to statospheric historical highs. Like, coffee roasting businesses around us declaring bankruptcy. National coffee roasting companies raising prices to $25-$30 a pound to stay in business. The price of coffee skyrocketed to where no one thought it would ever be. We struggled and kept afloat, watched our overhead and expenses like crazy, tight margins, high volume, high efficiency, running the tightest ship you've ever been on, and we made it through the storm. Our mission statement says that really good coffee shouldn't be out of reach for the average person to enjoy. We battened down the hatches and kept true to our mission. We haven't raised our wholesale prices to our coffee shops in 9 years. We had to raise our retail prices by a dollar two years ago, but beyond that we looked at how to cut expenses, worked harder, kept costs down, and we didn't raise prices more than we had to.
The futures traders got bored with coffee recently and have moved on to Orange Juice futures. Right now Orange Juice futures are at an all time high, 300% higher than a year ago, madness, speculation. You might notice a gallon of orange juice selling for $7 and okay, maybe just buy a different juice. Coffee futures have come back down to prices that are at a medium level, sustainable for farmers and roasters and consumers.
I guess for breakfast tomorrow, have some good coffee, and maybe apple juice or grapefruit juice, cranberry juice. I don't have any friends in the orange juice business, but I hope they're okay. The best ones will weather the storm and come out on the other side.
Happy Mug weathered the coffee futures spike without having to compromise our quality or pricing. We did take a hit on profit margins during the worst of the spike knowing it would pass, but we're still here and our coffee shops are still here and our customers are still here and our farmers are still okay and yeah. We just survived the biggest spike in coffee ever without abandoning our mission statement. We still offer our internet customers the best coffee in the world at rock bottom prices because coffee is my hobby, and we want you to have good coffee in your life. Orange juice? Eh, whatever.
We have the exact same coffee beans that other high profile roasters are charging twice the price for because they couldn't weather the futures market and they doubled their prices while we didn't. No judgement, they had to do what they had to do to not go bankrupt, but affordable top shelf coffee is what gets us up in the morning. We've got the farmer's back, we've got your back. Best coffee in the world, roasted within seconds of perfection, making farmers rich, donating to nonprofits, loving life, paying our employees well above the average expected wage in our county, sharing our favorite coffees with you and hoping it makes your day a little better. Full circle. Thank you for being part of the circle. You're making the world a better place on so many different levels, and we hope we are making your world better too.
Drink coffee. Be happy.
1 comment
Back in the late 90’s I worked at the commodity exchange at the World Trade Center in NYC for a couple years – before 9/11/01 (Don’t ask what I was doing tin commodities – I was a duck at of water amidst the yelling & papers flying in the trading rings when a market got hot. I had no speculator talent)
I was working in the cotton futures ring – but coffee was not far off across the floor – and yes orange juice futures was close by – and there were just a small handful of traders in OJ. Amazing what commodity speculation can do.
There was actually a coffee room there where regulations stipulated they must actually keep coffee – the coffee contracts traded where in the tons – No one went into that room to actually take possession of coffee. I doubt ever! Symbolic. A man tended that room when I visited once – I remember him stating his disdain for Starbucks – ‘Charbucks’ "Go get coffee at the A&P “Eight O’clock beans” If I remember correctly
I like what you are doing at Happy Mug. I buy your green coffee – and also your teas.