Luca Moderator Joined: 27 Jan 2004 Posts: 2,658 Location: Melbourne, Australia
Espresso: H: Maver W: FB-80 Grinder: H: Super Jolly W: Brasilia... Vac Pot: Hario TCA-2 Roaster: Sample Roaster at Work
Posted Wed Aug 2, 2006, 5:45am Subject: "Fair Trade" Certification at Plush Fish, Melbourne Uni
"Plush Fish" is probably the most heavily patronised coffee place on campus. I'd rate their 'spro 0 out of 6 on the barista comp scale, which is up there with the rest of the MU coffee places, but their milk texture is usually acceptable, which means that their hot chocolates are OK, if over-priced. The guys that started the place really had a great idea; high turnover coffee + high turnover sushi rolls = $$$.
So I stopped by there this morning for a HC and saw the following note, handwritten and pinned to the menu:
FAIR TRADE COFFEE - $0.30 EXTRA
OK, let's play around with some figures. Let's be generous and presume that they use 20g of coffee per cup. That's 50 cups per kg. 50 * $0.30 = $15. These people have a high turnover business and are not bad business people. At most, they're paying an extra $2/kg for FT. FT certification costs something like 2% of the FT coffee revenue ... approximately = 50 cups * $3/cup * 2% = $3. So the ignorant hippy activist beatnik student who wants to support coffee farmers gives Plush Fish's owners at least three times what actually gets to the farmers (presuming that the FT amount actually gets to them in its entirety in the first place). Anyhoo, the figures are probably way off, but they are illustrative - go ahead and see what happens if you plug in more realistic figures!
I certainly think that the costs of getting a reasonable amount of money to farmers should, ultimately, be borne by the consumer. But using the FT Mark to extract more money from customers who happen to have a heart (especially when they aren't a rich demographic) strikes me as unduly cynical - something of a perversion of what many take the FT mark to mean.
AndyL Senior Member Joined: 31 Dec 2003 Posts: 1,337 Location: australia Expertise: Pro Barista
Espresso: 2 Synesso,1957 urania lever Grinder: 2 Robur E, Robur, K10 Vac Pot: Hario Roaster: 5kg Renegade
Posted Wed Aug 2, 2006, 1:11pm Subject: Re: "Fair Trade" Certification at Plush Fish, Melbourne Uni
The only reason they are selling fairtrade is because the uni students have pressured them. Ive stacked up my figures if we raise $400 dollars a month and sell 100 kgs a month we will be donating $4.00 a kg. Thats a lot better than the 10 to 15 cents a kg.
Posted Wed Aug 2, 2006, 2:30pm Subject: Re: "Fair Trade" Certification at Plush Fish, Melbourne Uni
Welcome to the world of economics.
The folks behind FT have spent a lot of time creating the 'FT' brand but have no firm mechanism in place for collecting the value of the brand the way Coca Cola or McDonalds do. Instead the idea was to set a floor price for FT coffee above the market price with the idea that the difference would accrue to the coop or grower.
The first problem is that the world coffee price has been roughly the same as the minimum FT price although its come down recently. So there isn't a lot of excess value to accrue to the grower. I could be wrong but I suspect that anyone buying decent beans is probably already paying more than the FT price. Granted, there is more to FT than price alone so good fair trade beans will still be somewhat higher priced than market beans, but not a lot.
The second problem is that since the folks behind FT don't have any pass-through mechanism in place, like a franchise fee or royalty for advertizing FT, the value generated by the FT brand is up for grabs. Plush Fish seems to be capturing most of that value for themselves. I could be wrong but I didn't think the retailer was on the hook for the 2%, just the people who wanted to sell the beans as FT.
Of course there are two big unknowns here. The first is how many people are shelling out the $0.30/cup for FT coffee. If the demand is low the overhead cost of dealing with a 'different' form of coffee can be fairly high, i.e. if people are paying for FT you need to make sure they are getting FT coffee. The best shop I can walk to from my office will sell me FT beans but won't sell me a cup of coffee made with FT beans.
The second related unknown is what the overhead cost is for them to offer FT. Do they get it from the same supplier? Are there any additional records that they need to keep? Is there a higher cost or higher wastage involved with the lower sell through rate on FT? ... and so on.
Without walking the FT coffee through the entire business its hard to tell if these guys are cleaning up at $0.30/cup at retail or whether they are simply recouping the cost of dealing with a specialty product with a lower sell through.
Just for yucks I checked out the Starbucks page and they show one FT product at $9.99US/lb and $12.99US/lb for organic/shade-grown. The strange thing is that most of the regular beans are priced higher than the FT price.
emily Senior Member Joined: 2 Mar 2006 Posts: 157 Location: Sydney, Australia Expertise: Professional
Espresso: i share with everyone
Posted Thu Aug 3, 2006, 6:58pm Subject: Re: "Fair Trade" Certification at Plush Fish, Melbourne Uni
Luca
who supplies Plush Fish with coffee at MU? I'm not sure how it's working for them but is it possible that their coffee supplier is charging them extra at a wholesale end, so they're passing on the cost..... Perhaps the supplier is the one who is actually collecting the extra money?!
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